ENXTPA:SW

Stock Analysis Report

Executive Summary

Sodexo S.A. develops, manages, and delivers on-site, benefits and rewards, and personal and home services worldwide.

Rewards

PE ratio (22.1x) is below the Hospitality industry average (24.9x)

Earnings are forecast to grow 9.27% per year

Earnings grew by 2.2% over the past year

Pays a high and reliable dividend of 3.16%

Risk Analysis

Has a high level of debt



Snowflake Analysis

Established dividend payer with adequate balance sheet.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

0.3%

SW

-0.8%

FR Hospitality

1.2%

FR Market


1 Year Return

6.5%

SW

5.8%

FR Hospitality

23.7%

FR Market

Return vs Industry: SW matched the French Hospitality industry which returned 6.5% over the past year.

Return vs Market: SW underperformed the French Market which returned 24.9% over the past year.


Shareholder returns

SWIndustryMarket
7 Day0.3%-0.8%1.2%
30 Day-5.2%-3.2%1.9%
90 Day2.9%4.7%8.3%
1 Year9.7%6.5%8.7%5.8%28.1%23.7%
3 Year5.1%-3.0%6.2%-2.7%45.4%31.6%
5 Year26.7%11.7%15.8%-1.4%63.0%39.4%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

21.93x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SW (€101) is trading above our estimate of fair value (€97.02)

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


Price To Earnings Ratio

PE vs Industry: SW is good value based on its PE Ratio (22.1x) compared to the Hospitality industry average (24.9x).

PE vs Market: SW is poor value based on its PE Ratio (22.1x) compared to the French market (18.1x).


Price to Earnings Growth Ratio

PEG Ratio: SW is poor value based on its PEG Ratio (2.4x)


Price to Book Ratio

PB vs Industry: SW is overvalued based on its PB Ratio (3.3x) compared to the FR Hospitality industry average (1.3x).


Next Steps

Future Growth

How is Sodexo forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

8.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SW's forecast earnings growth (9.3% per year) is above the savings rate (-0.1%).

Earnings vs Market: SW's earnings (9.3% per year) are forecast to grow slower than the French market (11.7% per year).

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

Revenue vs Market: SW's revenue (3.2% per year) is forecast to grow slower than the French market (4.7% per year).

High Growth Revenue: SW's revenue (3.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SW's Return on Equity is forecast to be low in 3 years time (18%).


Next Steps

Past Performance

How has Sodexo performed over the past 5 years?

3.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SW has high quality earnings.

Growing Profit Margin: SW's current net profit margins (3%) are lower than last year (3.2%).


Past Earnings Growth Analysis

Earnings Trend: SW's earnings have grown by 3.1% per year over the past 5 years.

Accelerating Growth: SW's earnings growth over the past year (2.2%) is below its 5-year average (3.1% per year).

Earnings vs Industry: SW earnings growth over the past year (2.2%) exceeded the Hospitality industry -0.2%.


Return on Equity

High ROE: SW's Return on Equity (15.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Sodexo's financial position?


Financial Position Analysis

Short Term Liabilities: SW's short term assets (€8.0B) do not cover its short term liabilities (€8.2B).

Long Term Liabilities: SW's short term assets (€8.0B) exceed its long term liabilities (€4.7B).


Debt to Equity History and Analysis

Debt Level: SW's debt to equity ratio (91.6%) is considered high.

Reducing Debt: SW's debt to equity ratio has reduced from 120.6% to 91.6% over the past 5 years.

Debt Coverage: SW's debt is well covered by operating cash flow (30.8%).

Interest Coverage: SW's interest payments on its debt are well covered by EBIT (13x coverage).


Balance Sheet

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

Debt Coverage by Assets: SW's debt is covered by short term assets (assets are 1.9x debt).


Next Steps

Dividend

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

3.19%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Sodexo before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company3.2%marketbottom25%1.5%markettop25%4.4%industryaverage2.9%forecastin3Years3.2%

Current dividend yield vs market & industry

Notable Dividend: SW's dividend (3.16%) is higher than the bottom 25% of dividend payers in the French market (1.46%).

High Dividend: SW's dividend (3.16%) is low compared to the top 25% of dividend payers in the French market (4.43%).


Stability and Growth of Payments

Stable Dividend: SW's dividends per share have been stable in the past 10 years.

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (63.5%), SW's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SW's dividends in 3 years are forecast to be covered by earnings (54.7% payout ratio).


Next Steps

Management

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

2.4yrs

Average management tenure


CEO

Denis Machuel (55yo)

2yrs

Tenure

€3,643,982

Compensation

Mr. Denis Machuel has been Chief Executive Officer of Sodexo S.A. since January 23, 2018. Mr. Machuel served as Deputy Chief Executive Officer of Sodexo S.A. from September 1, 2017 to January 23, 2018 and  ...


CEO Compensation Analysis

Compensation vs Market: Denis's total compensation ($USD4.05M) is about average for companies of similar size in the French market ($USD3.59M).

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


Management Age and Tenure

2.4yrs

Average Tenure

59yo

Average Age

Experienced Management: SW's management team is considered experienced (2.4 years average tenure).


Board Age and Tenure

6.8yrs

Average Tenure

55.5yo

Average Age

Experienced Board: SW's board of directors are considered experienced (6.8 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

  • Pierre Bellon (89yo)

    Founder & Chairman Emeritus

    • Tenure: 4yrs
    • Compensation: €18.50k
  • Nathalie Bellon-Szabo (55yo)

    CEO Sports & Leisure Worldwide and Director

    • Tenure: 30.5yrs
    • Compensation: €63.10k
  • Dianne Salt

    Chief Communications Officer

    • Tenure: 2.8yrs
  • Virginia Jeanson

    Head of Investor Relations

    • Bruno Vanhaelst

      Chief Sales & Marketing Officer

      • Tenure: 1yrs
    • Denis Machuel (55yo)

      Chief Executive Officer

      • Tenure: 2yrs
      • Compensation: €3.64m
    • Philippe Besson (63yo)

      Head of Projects for Sponsorship & Director

      • Tenure: 5.6yrs
      • Compensation: €65.50k
    • Marc Rolland

      Group Chief Financial Officer

      • Tenure: 4.1yrs
    • Cathy Desquesses

      Chief People Officer

      • Tenure: 1.5yrs
    • Angelo Piccirillo

      Group General Counsel

      • Tenure: 1.3yrs

    Board Members

    • Astrid Bellon (50yo)

      Director

      • Tenure: 30.5yrs
      • Compensation: €36.00k
    • François-Xavier Bellon (54yo)

      Director

      • Tenure: 30.5yrs
      • Compensation: €63.50k
    • Pierre Bellon (89yo)

      Founder & Chairman Emeritus

      • Tenure: 4yrs
      • Compensation: €18.50k
    • Nathalie Bellon-Szabo (55yo)

      CEO Sports & Leisure Worldwide and Director

      • Tenure: 30.5yrs
      • Compensation: €63.10k
    • Robert Baconnier (79yo)

      Independent Director

      • Tenure: 14.9yrs
      • Compensation: €63.10k
    • Françoise Brougher (54yo)

      Independent Director

      • Tenure: 8yrs
      • Compensation: €98.60k
    • Cécile de Marsac (56yo)

      Independent Director

      • Tenure: 3yrs
      • Compensation: €105.60k
    • Sophie Bellon (58yo)

      Chairwoman of the Board

      • Tenure: 4yrs
      • Compensation: €676.74k
    • Philippe Besson (63yo)

      Head of Projects for Sponsorship & Director

      • Tenure: 5.6yrs
      • Compensation: €65.50k
    • Sophie Stabile (49yo)

      Independent Director

      • Tenure: 1.5yrs
      • Compensation: €80.50k

    Company Information

    Sodexo S.A.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Sodexo S.A.
    • Ticker: SW
    • Exchange: ENXTPA
    • Founded: 1966
    • Industry: Restaurants
    • Sector: Consumer Services
    • Market Cap: €14.605b
    • Shares outstanding: 145.90m
    • Website: https://www.sodexo.com

    Number of Employees


    Location

    • Sodexo S.A.
    • 255 Quai de la Bataille de Stalingrad
    • Issy-les-Moulineaux
    • Ile-de-France
    • 92866
    • France

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    SDXO.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDAug 1983
    SWENXTPA (Euronext Paris)YesCommon SharesFREURAug 1983
    0J3FLSE (London Stock Exchange)YesCommon SharesGBEURAug 1983
    SJ7DB (Deutsche Boerse AG)YesCommon SharesDEEURAug 1983
    SWPBATS-CHIXE (BATS 'Chi-X Europe')YesCommon SharesGBEURAug 1983
    SWWBAG (Wiener Boerse AG)YesCommon SharesATEURAug 1983
    SJ7ETLX (Eurotlx)YesCommon SharesITEURAug 1983
    SDXA.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDApr 2002

    Biography

    Sodexo S.A. develops, manages, and delivers on-site, benefits and rewards, and personal and home services worldwide. It offers food services; and various on-site services, including business and administration, healthcare and senior community support, and education services to corporate, energy and resources, government and agencies, sports and leisure, and other customers. The company also provides benefits and rewards services, such as employee benefits, incentive and recognition programs, employee mobility, and expense management public benefits; and personal and home services, including childcare, concierge, and in-home care services. In addition, it offers facilitates management services, including cleaning, front of office, security, ground maintenance, mailroom, document management, waste management, laundry, transportation, health and fitness, and conference center management services; and workplace and technical, property management, and project management services. The company was formerly known as Sodexho Alliance and changed its name to Sodexo S.A. in 2008. Sodexo S.A. was founded in 1966 and is headquartered in Issy-les-Moulineaux, France. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/20 20:53
    End of Day Share Price2020/01/20 00:00
    Earnings2019/08/31
    Annual Earnings2019/08/31


    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.