ENCE Energía y Celulosa (BME:ENC) - Share price, News & Analysis

Q: What is the Fair Price of ENC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

ENC (€3.17) is trading above our estimate of [[fair value]] (€2.64)

ENC fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	2/6
Past Performance	0/6
Financial Health	6/6
Dividends	3/6

ENC Stock Overview

Risk Analysis

Earnings are forecast to decline by an average of 3.9% per year for the next 3 years

Unstable dividend track record

Volatile share price over the past 3 months

ENCE Energía y Celulosa Competitors

Miquel y Costas & Miquel

BME:MCM

€505.1m

Iberpapel Gestión

BME:IBG

€158.9m

Cementos Molins

BDM:CMO

€1.0b

Ercros

BME:ECR

€364.0m

Price History & Performance

Summary of all time highs, changes and price drops for ENCE Energía y Celulosa
Historical stock prices
Current Share Price	€3.17
52 Week High	€3.77
52 Week Low	€2.01
Beta	1.53
1 Month Change	-12.53%
3 Month Change	-1.43%
1 Year Change	-8.91%
3 Year Change	-20.07%
5 Year Change	-10.33%
Change since IPO	67.55%

Recent News & Updates

Jun 11

ENCE Energía y Celulosa (BME:ENC) Seems To Use Debt Quite Sensibly

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the...

Mar 26

When Should You Buy ENCE Energía y Celulosa, S.A. (BME:ENC)?

ENCE Energía y Celulosa, S.A. ( BME:ENC ), might not be a large cap stock, but it received a lot of attention from a...

Mar 02

Is ENCE Energía y Celulosa (BME:ENC) A Risky Investment?

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously...

Shareholder Returns

	ENC	ES Forestry	ES Market
7D	-3.6%	-1.3%	-0.5%
1Y	-8.9%	-4.8%	-8.4%

Return vs Industry: ENC underperformed the Spanish Forestry industry which returned -4.8% over the past year.

Return vs Market: ENC matched the Spanish Market which returned -8.4% over the past year.

Price Volatility

Is ENC's price volatile compared to industry and market?
ENC volatility
ENC Average Weekly Movement	5.6%
Forestry Industry Average Movement	5.0%
Market Average Movement	3.7%
10% most volatile stocks in ES Market	6.8%
10% least volatile stocks in ES Market	0.9%

Stable Share Price: ENC is more volatile than 75% of Spanish stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: ENC's weekly volatility (6%) has been stable over the past year, but is still higher than 75% of Spanish stocks.

About the Company

Founded	Employees	CEO	Website
1957	1,133	Ignacio de Colmenares y Brunet	https://ence.es

ENCE Energía y Celulosa, S.A., together with its subsidiaries, produces and sells eucalyptus pulp and renewable energy in Spain, Germany, Poland, Italy, France, the United Kingdom, Turkey, Sweden, Romania, Netherlands, Austria, and internationally. It offers bleached eucalyptus kraft pulp; and forest land management and forestry services, as well as produces renewable energy using forestry and agricultural biomass sources. The company also purchases and sells timber.

ENCE Energía y Celulosa Fundamentals Summary

How do ENCE Energía y Celulosa's earnings and revenue compare to its market cap?
ENC fundamental statistics
Market Cap	€768.25m
Earnings (TTM)	-€167.71m
Revenue (TTM)	€891.48m

0.9x

P/S Ratio

-4.6x

P/E Ratio

Is ENC overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
ENC income statement (TTM)
Revenue	€891.48m
Cost of Revenue	€407.10m
Gross Profit	€484.38m
Other Expenses	€652.09m
Earnings	-€167.71m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Jul 26, 2022

Earnings per share (EPS)	-0.69
Gross Margin	54.33%
Net Profit Margin	-18.81%
Debt/Equity Ratio	77.0%

How did ENC perform over the long term?

See historical performance and comparison

Dividends

3.4%

Current Dividend Yield

n/a

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is ENC undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for ENC?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for ENC. This is calculated by dividing ENC's market cap by their current preferred multiple.
What is ENC's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	€768.25m

ENC key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1x
Enterprise Value/EBITDA	7.1x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

How does ENC's PS Ratio compare to its peers?

ENC PS Ratio vs Peers

The above table shows the PS ratio for ENC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PS	Estimated Growth	Market Cap
Peer Average	1x
MCM Miquel y Costas & Miquel	1.7x	n/a	€505.1m
IBG Iberpapel Gestión	0.6x	-4.2%	€158.9m
CMO Cementos Molins	1.2x	9.7%	€1.0b
ECR Ercros	0.4x	-4.1%	€364.0m
ENC ENCE Energía y Celulosa	0.9x	-14.3%	€768.2m

Forward PS

Price-To-Sales vs Peers: ENC is good value based on its Price-To-Sales Ratio (0.9x) compared to the peer average (1x).

Price to Earnings Ratio vs Industry

How does ENC's PE Ratio compare vs other companies in the European Forestry Industry?

Price-To-Sales vs Industry: ENC is good value based on its Price-To-Sales Ratio (0.9x) compared to the European Forestry industry average (1x)

Price to Sales Ratio vs Fair Ratio

What is ENC's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

ENC PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	0.9x
Fair PS Ratio	0.5x

Price-To-Sales vs Fair Ratio: ENC is expensive based on its Price-To-Sales Ratio (0.9x) compared to the estimated Fair Price-To-Sales Ratio (0.5x).

Share Price vs Fair Value

What is the Fair Price of ENC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: ENC (€3.17) is trading above our estimate of fair value (€2.64)

Significantly Below Fair Value: ENC is trading above our estimate of fair value.

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate ENC's PEG Ratio to determine if it is good value.

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Future Growth

How is ENCE Energía y Celulosa forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-3.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: ENC's earnings are forecast to decline over the next 3 years (-3.9% per year).

Earnings vs Market: ENC is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: ENC is expected to become profitable in the next 3 years.

Revenue vs Market: ENC's revenue is expected to decline over the next 3 years (-14.3% per year).

High Growth Revenue: ENC's revenue is forecast to decline over the next 3 years (-14.3% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: ENC's Return on Equity is forecast to be low in 3 years time (9%).

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Past Performance

How has ENCE Energía y Celulosa performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-64.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ENC is currently unprofitable.

Growing Profit Margin: ENC is currently unprofitable.

Past Earnings Growth Analysis

Earnings Trend: ENC is unprofitable, and losses have increased over the past 5 years at a rate of 64.7% per year.

Accelerating Growth: Unable to compare ENC's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: ENC is unprofitable, making it difficult to compare its past year earnings growth to the Forestry industry (94.4%).

Return on Equity

High ROE: ENC has a negative Return on Equity (-27.16%), as it is currently unprofitable.

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Financial Health

How is ENCE Energía y Celulosa's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: ENC's short term assets (€585.9M) exceed its short term liabilities (€450.4M).

Long Term Liabilities: ENC's short term assets (€585.9M) exceed its long term liabilities (€536.4M).

Debt to Equity History and Analysis

Debt Level: ENC's net debt to equity ratio (12.8%) is considered satisfactory.

Reducing Debt: ENC's debt to equity ratio has reduced from 77.4% to 77% over the past 5 years.

Debt Coverage: ENC's debt is well covered by operating cash flow (47%).

Interest Coverage: ENC's interest payments on its debt are well covered by EBIT (3.3x coverage).

Balance Sheet

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Dividend

What is ENCE Energía y Celulosa current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

3.41%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: ENC's dividend (3.41%) is higher than the bottom 25% of dividend payers in the Spanish market (1.99%).

High Dividend: ENC's dividend (3.41%) is low compared to the top 25% of dividend payers in the Spanish market (5.74%).

Stability and Growth of Payments

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

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

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (14.8%), ENC's dividend payments are thoroughly covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

7.5yrs

Average management tenure

CEO

Ignacio de Colmenares y Brunet (60 yo)

11.58yrs

Tenure

€135,000

Compensation

Mr. Ignacio de Colmenares y Brunet served as a Senior Advisor at Artá Capital, SGEIC, S.A. He has been the Chief Executive Officer of ENCE Energia y Celulosa SA since December 2010 and serves as its Managi...

CEO Compensation Analysis

Compensation vs Market: Ignacio's total compensation ($USD140.42K) is below average for companies of similar size in the Spanish market ($USD1.08M).

Compensation vs Earnings: Ignacio's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: ENC's management team is seasoned and experienced (7.5 years average tenure).

Board Members

Experienced Board: ENC's board of directors are considered experienced (3.8 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

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

Data	Last Updated (UTC time)
Company Analysis	2022/07/03 00:00
End of Day Share Price	2022/07/01 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31