HLSE:KESKOB

Stock Analysis Report

Executive Summary

Kesko Oyj provides trading sector services.

Rewards

Trading at 51.5% below its fair value

Earnings are forecast to grow 2.05% per year

Earnings grew by 35.7% over the past year

Risk Analysis

Unstable dividend track record



Snowflake Analysis

Solid track record average dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-9.1%

KESKOB

-1.6%

FI Consumer Retailing

1.2%

FI Market


1 Year Return

16.2%

KESKOB

-1.2%

FI Consumer Retailing

11.1%

FI Market

Return vs Industry: KESKOB exceeded the Finnish Consumer Retailing industry which returned 4.8% over the past year.

Return vs Market: KESKOB exceeded the Finnish Market which returned 12.5% over the past year.


Shareholder returns

KESKOBIndustryMarket
7 Day-9.1%-1.6%1.2%
30 Day-5.0%-3.1%3.8%
90 Day1.4%-1.7%7.5%
1 Year21.2%16.2%2.7%-1.2%16.2%11.1%
3 Year45.1%26.4%2.2%-8.0%31.9%16.0%
5 Year135.5%85.0%11.2%-5.9%48.7%20.2%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

47.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: KESKOB (€64.84) is trading below our estimate of fair value (€133.7)

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


Price To Earnings Ratio

PE vs Industry: KESKOB is poor value based on its PE Ratio (21.8x) compared to the Consumer Retailing industry average (19.2x).

PE vs Market: KESKOB is good value based on its PE Ratio (20.1x) compared to the Finnish market (21.1x).


Price to Earnings Growth Ratio

PEG Ratio: KESKOB is poor value based on its PEG Ratio (10.6x)


Price to Book Ratio

PB vs Industry: KESKOB is overvalued based on its PB Ratio (3.3x) compared to the XE Consumer Retailing industry average (1.6x).


Next Steps

Future Growth

How is Kesko Oyj forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

2.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KESKOB's forecast earnings growth (2.1% per year) is above the savings rate (-0.1%).

Earnings vs Market: KESKOB's earnings (2.1% per year) are forecast to grow slower than the Finnish market (14.6% per year).

High Growth Earnings: KESKOB's earnings are forecast to grow, but not significantly.

Revenue vs Market: KESKOB's revenue (2.8% per year) is forecast to grow faster than the Finnish market (1.9% per year).

High Growth Revenue: KESKOB's revenue (2.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: KESKOB's Return on Equity is forecast to be low in 3 years time (15.1%).


Next Steps

Past Performance

How has Kesko Oyj performed over the past 5 years?

22.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: KESKOB has high quality earnings.

Growing Profit Margin: KESKOB's current net profit margins (2.8%) are higher than last year (2.1%).


Past Earnings Growth Analysis

Earnings Trend: KESKOB's earnings have grown significantly by 22.8% per year over the past 5 years.

Accelerating Growth: KESKOB's earnings growth over the past year (35.7%) exceeds its 5-year average (22.8% per year).

Earnings vs Industry: KESKOB earnings growth over the past year (35.7%) exceeded the Consumer Retailing industry 0.5%.


Return on Equity

High ROE: KESKOB's Return on Equity (14.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Kesko Oyj's financial position?


Financial Position Analysis

Short Term Liabilities: KESKOB's short term assets (€2.4B) do not cover its short term liabilities (€2.5B).

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


Debt to Equity History and Analysis

Debt Level: KESKOB's debt to equity ratio (30.9%) is considered satisfactory.

Reducing Debt: KESKOB's debt to equity ratio has increased from 21.3% to 30.9% over the past 5 years.

Debt Coverage: KESKOB's debt is well covered by operating cash flow (81.8%).

Interest Coverage: KESKOB earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: KESKOB has a high level of physical assets or inventory.

Debt Coverage by Assets: KESKOB's debt is covered by short term assets (assets are 3.8x debt).


Next Steps

Dividend

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

3.91%

Current Dividend Yield


Dividend Yield vs Market

company3.9%marketbottom25%2.1%markettop25%4.7%industryaverage3.6%forecastin3Years4.5%

Current dividend yield vs market & industry

Notable Dividend: KESKOB's dividend (3.61%) is higher than the bottom 25% of dividend payers in the Finnish market (2.13%).

High Dividend: KESKOB's dividend (3.61%) is low compared to the top 25% of dividend payers in the Finnish market (4.68%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (78.7%), KESKOB's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: KESKOB's dividends in 3 years are forecast to be covered by earnings (83.9% payout ratio).


Next Steps

Management

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

6.0yrs

Average management tenure


CEO

Mikko Helander (59yo)

5yrs

Tenure

€2,299,656

Compensation

Mr. Mikko Helander, M.Sc. (Eng.), serves as Director at Stora Enso Oyj since March 14, 2019. He has been the Chairman of Management Board, Chief Executive Officer, President and Managing Director at Kesko  ...


CEO Compensation Analysis

Compensation vs Market: Mikko's total compensation ($USD2.56M) is above average for companies of similar size in the Finnish market ($USD1.50M).

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


Management Age and Tenure

6.0yrs

Average Tenure

54yo

Average Age

Experienced Management: KESKOB's management team is seasoned and experienced (6 years average tenure).


Board Age and Tenure

3.8yrs

Average Tenure

58yo

Average Age

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


Insider Trading

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.


Management Team

  • Mikko Helander (59yo)

    Chairman of the Group Management Board

    • Tenure: 5yrs
    • Compensation: €2.30m
  • Ari Akseli (47yo)

    President of Grocery Trade & Member of Group Management Board

    • Tenure: 2.2yrs
  • Arto Hiltunen (61yo)

    Chief Information Officer & VP of IT Management

    • Tenure: 11.1yrs
  • Hanna Jaakkola

    Vice President of Investor Relations

    • Jorma Rauhala (54yo)

      President of Building & Technical Trade

      • Tenure: 6.9yrs
    • Jukka Erlund (45yo)

      CFO, Executive VP & Member of Group Management Board

      • Tenure: 8.2yrs
    • Johan Friman (54yo)

      President of K Auto Oy & Member of Group Management Board

      • Tenure: 3yrs
    • Matti Mettälä (56yo)

      Executive VP of HR

      • Tenure: 7.3yrs
    • Anna-Maria Ronkainen (53yo)

      Chief Digital Officer

      • Tenure: 4.8yrs
    • Lasse Luukkainen (40yo)

      Group General Counsel & Company Secretary


      Board Members

      • Peter Fagernäs (67yo)

        Deputy Chairman

        • Tenure: 1.8yrs
        • Compensation: €63.00k
      • Matti Kyytsönen (70yo)

        Independent Director

        • Tenure: 4.8yrs
        • Compensation: €61.80k
      • Esa Kiiskinen (56yo)

        Chairman of the Board

        • Tenure: 7.8yrs
        • Compensation: €126.50k
      • Jannica Fagerholm (58yo)

        Independent Director

        • Tenure: 3.8yrs
        • Compensation: €79.30k
      • Toni Pokela (46yo)

        Director

        • Tenure: 7.8yrs
        • Compensation: €59.30k
      • Piia Karhu (43yo)

        Director

        • Tenure: 1.8yrs
        • Compensation: €49.50k
      • Matti Naumanen (62yo)

        Director

        • Tenure: 3.8yrs
        • Compensation: €59.30k

      Company Information

      Kesko Oyj's company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: Kesko Oyj
      • Ticker: KESKOB
      • Exchange: HLSE
      • Founded: 1940
      • Industry: Food Retail
      • Sector: Consumer Retailing
      • Market Cap: €5.784b
      • Shares outstanding: 99.09m
      • Website: https://www.kesko.fi

      Number of Employees


      Location

      • Kesko Oyj
      • Mannerheimintie 117
      • Helsinki
      • 280
      • Finland

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      KKOY.FOTCPK (Pink Sheets LLC)YesSeries B SharesUSUSDJan 1992
      KEKDB (Deutsche Boerse AG)YesSeries B SharesDEEURJan 1992
      KESKOBHLSE (OMX Nordic Exchange Helsinki)YesSeries B SharesFIEURJan 1992
      0BNTLSE (London Stock Exchange)YesSeries B SharesGBEURJan 1992
      KESKOAHLSE (OMX Nordic Exchange Helsinki)Series A SharesFIEURJun 1999
      0BNSLSE (London Stock Exchange)Series A SharesGBEURJun 1999
      KKOY.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDOct 2008

      Biography

      Kesko Oyj provides trading sector services. The company operates through Grocery Trade, Building and Technical Trade, and Car Trade segments. The Grocery Trade segment is involved in the wholesale and B2B trade of groceries; and the retail sale of home and specialty goods in Finland. This segment operates approximately 1,200 K-food store chains, including K-Citymarket, K-Supermarket, K-Market, and Neste K. The Building and Technical Trade segment engages in the retail, wholesale, and B2B trade of building and home improvement, and electrical and HEPAC products, as well as trades in leisure goods. This segment operates through K-Rauta, Byggmakker, K-Senukai, OMA, Onninen, Intersport, Budget Sport, The Athlete’s Foot, Kookenkä, stores in Finland, Sweden, Norway, the Baltic countries, Poland, and Belarus; and online stores. The Car Trade segment imports and markets Volkswagen, Audi, SEAT, and Porsche passenger cars, as well as Volkswagen and MAN commercial vehicles in Finland; and Seat cars in Estonia and Latvia. It is also involved in new and used car retailing activities; and the provision of after-sales services at its retail outlets in the Greater Helsinki area, Turku, and Tampere. The company was founded in 1940 and is headquartered in Helsinki, Finland. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/22 20:46
      End of Day Share Price2020/01/22 00:00
      Earnings2019/09/30
      Annual Earnings2018/12/31


      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.