DB:QCH

Stock Analysis Report

Executive Summary

Computershare Limited provides investor, plan, communication, business, stakeholder relationship management, and technology services in Australia, the United States, the United Kingdom, Canada, Switzerland, and internationally.

Rewards

Trading at 32.8% below its fair value

Earnings grew by 38.5% over the past year

Risk Analysis

Earnings are forecast to decline by an average of -0.4% per year for the next 3 years

Debt is not well covered by operating cash flow

Unstable dividend track record

Large one-off items impacting financial results



Snowflake Analysis

Undervalued with proven track record and pays a dividend.


Similar Companies

Share Price & News

How has Computershare's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: QCH has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.0%

QCH

-3.8%

DE IT

0.7%

DE Market


1 Year Return

-8.1%

QCH

2.4%

DE IT

15.1%

DE Market

Return vs Industry: QCH underperformed the German IT industry which returned 2.4% over the past year.

Return vs Market: QCH underperformed the German Market which returned 15.1% over the past year.


Shareholder returns

QCHIndustryMarket
7 Day-1.0%-3.8%0.7%
30 Day1.0%1.3%-0.7%
90 Day4.5%-11.8%5.9%
1 Year-5.5%-8.1%3.0%2.4%18.7%15.1%
3 Year29.2%19.8%136.4%130.0%19.2%8.6%
5 Year62.3%41.0%235.0%221.4%39.0%20.1%

Price Volatility Vs. Market

How volatile is Computershare's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Computershare undervalued compared to its fair value and its price relative to the market?

32.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: QCH (€10.2) is trading below our estimate of fair value (€15.19)

Significantly Below Fair Value: QCH is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: QCH is good value based on its PE Ratio (15.1x) compared to the IT industry average (27.9x).

PE vs Market: QCH is good value based on its PE Ratio (15.1x) compared to the German market (20.8x).


Price to Earnings Growth Ratio

PEG Ratio: QCH's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: QCH is good value based on its PB Ratio (4x) compared to the DE IT industry average (4.3x).


Next Steps

Future Growth

How is Computershare forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

-0.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: QCH's earnings are forecast to decline over the next 3 years (-0.4% per year).

Earnings vs Market: QCH's earnings are forecast to decline over the next 3 years (-0.4% per year).

High Growth Earnings: QCH's earnings are forecast to decline over the next 3 years.

Revenue vs Market: QCH's revenue (1.2% per year) is forecast to grow slower than the German market (4.9% per year).

High Growth Revenue: QCH's revenue (1.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: QCH's Return on Equity is forecast to be high in 3 years time (22.9%)


Next Steps

Past Performance

How has Computershare performed over the past 5 years?

19.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: QCH has a large one-off gain of $106.5M impacting its June 30 2019 financial results.

Growing Profit Margin: QCH's current net profit margins (17.7%) are higher than last year (13.1%).


Past Earnings Growth Analysis

Earnings Trend: QCH's earnings have grown by 19.2% per year over the past 5 years.

Accelerating Growth: QCH's earnings growth over the past year (38.5%) exceeds its 5-year average (19.2% per year).

Earnings vs Industry: QCH earnings growth over the past year (38.5%) exceeded the IT industry 17.2%.


Return on Equity

High ROE: Whilst QCH's Return on Equity (26.62%) is high, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Computershare's financial position?


Financial Position Analysis

Short Term Liabilities: QCH's short term assets ($1.5B) exceed its short term liabilities ($701.1M).

Long Term Liabilities: QCH's short term assets ($1.5B) do not cover its long term liabilities ($2.4B).


Debt to Equity History and Analysis

Debt Level: QCH's debt to equity ratio (128.9%) is considered high.

Reducing Debt: QCH's debt to equity ratio has increased from 127.7% to 128.9% over the past 5 years.

Debt Coverage: QCH's debt is not well covered by operating cash flow (14.1%).

Interest Coverage: QCH's interest payments on its debt are well covered by EBIT (7.1x coverage).


Balance Sheet

Inventory Level: QCH has a low level of unsold assets or inventory.

Debt Coverage by Assets: QCH's debt is not covered by short term assets (assets are 0.7x debt).


Next Steps

Dividend

What is Computershare's current dividend yield, its reliability and sustainability?

2.67%

Current Dividend Yield


Dividend Yield vs Market

company2.7%marketbottom25%1.4%markettop25%3.6%industryaverage0.6%forecastin3Years3.2%

Current dividend yield vs market & industry

Notable Dividend: QCH's dividend (2.67%) is higher than the bottom 25% of dividend payers in the German market (1.38%).

High Dividend: QCH's dividend (2.67%) is low compared to the top 25% of dividend payers in the German market (3.61%).


Stability and Growth of Payments

Stable Dividend: QCH's dividend payments have been volatile in the past 10 years.

Growing Dividend: QCH's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (40.3%), QCH's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: QCH's dividends in 3 years are forecast to be well covered by earnings (49.2% payout ratio).


Next Steps

Management

What is the CEO of Computershare's salary, the management and board of directors tenure and is there insider trading?

1.6yrs

Average management tenure


CEO

Stuart Irving (48yo)

5.4yrs

Tenure

US$3,335,335

Compensation

Mr. Stuart James Irving has been the Chief Executive Officer, President and Executive Director of Computershare Limited since July 1, 2014 and served as its Chief Information Officer since 2008. Mr. Irving ...


CEO Compensation Analysis

Compensation vs Market: Stuart's total compensation ($USD3.34M) is about average for companies of similar size in the German market ($USD3.71M).

Compensation vs Earnings: Stuart's compensation has increased by more than 20% in the past year.


Management Age and Tenure

1.6yrs

Average Tenure

Experienced Management: QCH's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.


Board Age and Tenure

4.6yrs

Average Tenure

59yo

Average Age

Experienced Board: QCH's board of directors are considered experienced (4.6 years average tenure).


Insider Trading

Insider Buying: QCH insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$85,84202 Dec 19
Paul Reynolds
EntityIndividual
Role
Member of the Board of Directors
Independent Non Executive Director
Shares8,000
Max PriceUS$10.73
SellUS$1,787,75601 Dec 19
The Vanguard Group, Inc.
EntityCompany
Shares169,567
Max PriceUS$10.54
BuyUS$62,73124 Nov 19
Lisa Gay
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares5,997
Max PriceUS$10.46
SellUS$2,071,57724 Nov 19
Finico Pty. Ltd., Asset Management Arm
EntityCompany
Shares200,000
Max PriceUS$10.36
BuyUS$1,90905 Nov 19
The Vanguard Group, Inc.
EntityCompany
Shares194
Max PriceUS$9.84
SellUS$715,37105 Nov 19
The Vanguard Group, Inc.
EntityCompany
Shares73,096
Max PriceUS$9.79
BuyUS$18,09619 Aug 19
Simon Jones
EntityIndividual
Role
Chairman of the Board
Independent Chairman of the Board
Shares2,000
Max PriceUS$9.05
BuyUS$30,97618 Aug 19
Tiffany Fuller
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares3,500
Max PriceUS$8.85
SellUS$5,108,74921 Feb 19
Finico Pty. Ltd., Asset Management Arm
EntityCompany
Shares450,000
Max PriceUS$11.35

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Mark Davis

    Executive Officer

    • Tenure: 0yrs
    • Compensation: US$2.06m
  • Steve Rothbloom

    CEO & President of North America for Computershare Inc (US)

    • Tenure: 0yrs
    • Compensation: US$2.31m
  • Paul Conn

    President of Global Capital Markets - Computershare Inc (US)

    • Tenure: 13.9yrs
    • Compensation: US$1.15m
  • Stuart Irving (48yo)

    CEO, President & Executive Director

    • Tenure: 5.4yrs
    • Compensation: US$3.34m
  • Steffen H. Herfurth

    CEO of Computershare EMEA & Georgeson

    • Tenure: 0.9yrs
    • Compensation: US$848.89k
  • Naz Sarkar

    Global Head of Issuer Services

    • Tenure: 0.3yrs
    • Compensation: US$1.37m
  • Nick Oldfield

    CFO & Global Head of Loan Services

    • Tenure: 0yrs
  • Mark McDougall

    Global Chief Information Officer

    • Tenure: 5.4yrs
    • Compensation: US$1.01m
  • Stuart Swartz

    Global Head of Business Services

    • Tenure: 0.3yrs
    • Compensation: US$824.95k
  • CP Yap

    President & CEO of Computershare Asia

    • Tenure: 1.6yrs
    • Compensation: US$628.67k

Board Members

  • Tiffany Fuller (49yo)

    Non-Executive Director

    • Tenure: 5.2yrs
    • Compensation: US$174.55k
  • Joe Velli (61yo)

    Non-Executive Director

    • Tenure: 5.2yrs
    • Compensation: US$160.00k
  • Chris Morris (71yo)

    Non-Executive Director

    • Tenure: 9.3yrs
    • Compensation: US$116.37k
  • Simon Jones (63yo)

    Independent Chairman of the Board

    • Tenure: 4.1yrs
    • Compensation: US$271.86k
  • Abi Cleland (46yo)

    Independent Non-Executive Director

    • Tenure: 1.8yrs
    • Compensation: US$44.12k
  • Lisa Gay (57yo)

    Independent Non-Executive Director

    • Tenure: 1.8yrs
    • Compensation: US$50.90k
  • Stuart Irving (48yo)

    CEO, President & Executive Director

    • Tenure: 5.4yrs
    • Compensation: US$3.34m
  • Paul Reynolds (62yo)

    Independent Non Executive Director

    • Tenure: 1.2yrs

Company Information

Computershare Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Computershare Limited
  • Ticker: QCH
  • Exchange: DB
  • Founded: 1978
  • Industry: Data Processing and Outsourced Services
  • Sector: Software
  • Market Cap: AU$9.098b
  • Listing Market Cap: AU$5.630b
  • Shares outstanding: 540.88m
  • Website: https://www.computershare.com

Number of Employees


Location

  • Computershare Limited
  • Yarra Falls
  • 452 Johnston Street
  • Abbotsford
  • Victoria
  • 3067
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CMSQ.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJun 1994
CPUASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJun 1994
QCHDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJun 1994
CPUCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJun 1994
CMSQ.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDJul 2004

Biography

Computershare Limited provides investor, plan, communication, business, stakeholder relationship management, and technology services in Australia, the United States, the United Kingdom, Canada, Switzerland ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/11 20:38
End of Day Share Price2019/12/11 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.