LSE:NBS

Stock Analysis Report

Nationwide Building Society

Executive Summary

Nationwide Building Society, together with its subsidiaries, provides retail financial services in the United Kingdom.


Snowflake Analysis

Undervalued with excellent balance sheet.


Similar Companies

Share Price & News

How has Nationwide Building Society's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

0%

NBS

-3.2%

GB Mortgage

1.7%

GB Market


1 Year Return

0%

NBS

-21.1%

GB Mortgage

-21.8%

GB Market

Return vs Industry: NBS exceeded the UK Mortgage industry which returned -24.3% over the past year.

Return vs Market: NBS exceeded the UK Market which returned -23.6% over the past year.


Shareholder returns

NBSIndustryMarket
7 Day0%-3.2%1.7%
30 Day0%-17.7%-12.0%
90 Day0%-25.4%-25.3%
1 Year0%0%-19.4%-21.1%-17.9%-21.8%
3 Year17.6%17.6%-11.0%-16.9%-11.8%-22.8%
5 Year26.6%26.6%-8.6%-21.9%0.1%-22.4%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Nationwide Building Society undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NBS (£164) is trading below our estimate of fair value (£1047.44)

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


Price To Earnings Ratio

PE vs Industry: NBS is good value based on its PE Ratio (3.8x) compared to the Mortgage industry average (6.2x).

PE vs Market: NBS is good value based on its PE Ratio (3.8x) compared to the UK market (12.6x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: NBS is good value based on its PB Ratio (0.1x) compared to the GB Mortgage industry average (0.7x).


Next Steps

Future Growth

How is Nationwide Building Society forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

12.5%

Forecasted Banks industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Nationwide Building Society has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Nationwide Building Society performed over the past 5 years?

-9.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NBS has high quality earnings.

Growing Profit Margin: NBS's current net profit margins (15.3%) are lower than last year (21.5%).


Past Earnings Growth Analysis

Earnings Trend: NBS's earnings have declined by -9.8% per year over the past 5 years.

Accelerating Growth: NBS's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: NBS had negative earnings growth (-31.9%) over the past year, making it difficult to compare to the Mortgage industry average (-4.8%).


Return on Equity

High ROE: NBS's Return on Equity (3.6%) is considered low.


Next Steps

Financial Health

How is Nationwide Building Society's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet


Financial Institutions Analysis

Asset Level: NBS's level of assets compared to its equity is moderate.

Allowance for Bad Loans: NBS has a low allowance for bad loans.

Low Risk Liabilities: NBS's liabilities are made up of primarily low risk sources of funding.

Loan Level: NBS has an acceptable proportion of non-loan assets held.

Low Risk Deposits: NBS's loans are broadly funded by customer deposits.

Level of Bad Loans: NBS has an appropriate level of bad loans (0.88%)


Next Steps

Dividend

What is Nationwide Building Society's current dividend yield, its reliability and sustainability?

6.25%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: NBS's dividend (6.25%) is higher than the bottom 25% of dividend payers in the UK market (2.59%).

High Dividend: NBS's dividend (6.25%) is low compared to the top 25% of dividend payers in the UK market (7.08%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, NBS has been paying a dividend for less than 10 years.

Growing Dividend: NBS's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (23.6%), NBS's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

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

1.3yrs

Average management tenure


CEO

Joe Garner (50yo)

4s

Tenure

UK£2,372,000

Compensation

Mr. Joe D. Garner has been the Chief Executive at Nationwide Building Society since April 5, 2016. Mr. Garner served as the Chief Executive Officer of Openreach of BT Group plc from February 2014 to March  ...


CEO Compensation Analysis

Compensation vs Market: Joe's total compensation ($USD2.91M) is above average for companies of similar size in the UK market ($USD1.85M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Joe Garner
CEO & Director4yrsUK£2.37mno data
Chris Rhodes
CFO & Executive Director11yrsUK£1.35mno data
Patrick Eltridge
Chief Operating Officer1.17yrsno datano data
Larry Banda
Divisional Director of Financial Planningno datano datano data
Sarah Gardiner
Head of Investor Relationsno datano datano data
Mark Chapman
Chief Legal Officer & Society Secretary2.08yrsno datano data
Sara Bennison
Chief Marketing Officer4.08yrsno datano data
Jane M. Hanson
Chief People Officer1.25yrsno datano data
Ian Andrew
Managing Director of Nationwide Group Intermediary Salesno datano datano data
Alison Robb
Deputy Chief Financial Officer1.25yrsno datano data

1.3yrs

Average Tenure

50.5yo

Average Age

Experienced Management: NBS's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Joe Garner
CEO & Director4yrsUK£2.37mno data
Chris Rhodes
CFO & Executive Director11yrsUK£1.35mno data
Timothy Tookey
Independent Non Executive Director4.83yrsUK£137.00kno data
Albert Hitchcock
Independent Non Executive Director1.33yrsUK£33.00kno data
Rita Clifton
Independent Non-Executive Director7.75yrsUK£105.00kno data
David Roberts
Independent Chairman of the Board4.75yrsUK£397.00kno data
Kevin Allen Parry
Senior Independent Director0.25yrUK£129.00kno data
Usha Prashar
Independent Non-Executive Director3.25yrsUK£93.00kno data
Gunn Waersted
Independent Non-Executive Director2.83yrsUK£88.00kno data
Rowenna Fyfield
Independent Non-Executive Director4.83yrsUK£101.00kno data

4.4yrs

Average Tenure

57yo

Average Age

Experienced Board: NBS's board of directors are considered experienced (4.4 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.


Top Shareholders

Company Information

Nationwide Building Society's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Nationwide Building Society
  • Ticker: NBS
  • Exchange: LSE
  • Founded: 1846
  • Industry: Thrifts and Mortgage Finance
  • Sector: Banks
  • Market Cap: UK£1.722b
  • Shares outstanding: 10.50m
  • Website: https://www.nationwide.co.uk

Number of Employees


Location

  • Nationwide Building Society
  • Nationwide House
  • Pipers Way
  • Swindon
  • Wiltshire
  • SN38 1NW
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NBSLSE (London Stock Exchange)YesCore Capital Deferred SharesGBGBPDec 2013

Biography

Nationwide Building Society, together with its subsidiaries, provides retail financial services in the United Kingdom. The company offers current and savings, and individual savings accounts; residential mortgages; overdrafts, personal loans, car loans, and home improvement loans; and credit cards. It also provides loans to registered social landlords, loans made under the private finance initiatives, and commercial real estate loans. In addition, the company offers home, life, income protection, travel, mobile phone, and breakdown insurance; and investment products and services, such as financial planning services. Further, it provides treasury liquidity, derivative, and discretionary services; and mobile and Internet banking services. The company was founded in 1846 and is headquartered in Swindon, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/08 00:32
End of Day Share Price2020/04/07 00:00
Earnings2019/09/30
Annual Earnings2019/04/04


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.