LSE:NWG

Stock Analysis Report

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Market Cap

UK£23.7b

Last Updated

2021/06/14 18:39 UTC

Data Sources

Company Financials +

Executive Summary

NatWest Group plc, together with its subsidiaries, provides banking and financial products and services to personal, commercial, corporate, and institutional customers. More Details


Snowflake Analysis

Excellent balance sheet with moderate growth potential.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: NWG is less volatile than 75% of UK stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: NWG's weekly volatility (3%) has been stable over the past year.


Market Performance


7 Day Return

-2.3%

NWG

-0.7%

GB Banks

0.4%

GB Market


1 Year Return

73.4%

NWG

37.3%

GB Banks

21.3%

GB Market

Return vs Industry: NWG exceeded the UK Banks industry which returned 37.3% over the past year.

Return vs Market: NWG exceeded the UK Market which returned 21.3% over the past year.


Shareholder returns

NWGIndustryMarket
7 Day-2.3%-0.7%0.4%
30 Day6.2%0.8%1.7%
90 Day10.4%7.3%6.9%
1 Year76.1%73.4%40.3%37.3%27.3%21.3%
3 Year-7.4%-19.4%-19.5%-26.9%13.8%0.7%
5 Year-0.8%-13.7%14.9%-2.6%55.1%25.8%

Long-Term Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

16.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NWG (£2.05) is trading below our estimate of fair value (£2.46)

Significantly Below Fair Value: NWG is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: NWG is unprofitable, so we can't compare its PE Ratio to the UK Banks industry average.

PE vs Market: NWG is unprofitable, so we can't compare its PE Ratio to the UK market.


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: NWG is good value based on its PB Ratio (0.6x) compared to the GB Banks industry average (0.7x).


Future Growth

How is NatWest Group forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?

17.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NWG is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (0.9%).

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

High Growth Earnings: NWG's is expected to become profitable in the next 3 years.

Revenue vs Market: NWG's revenue (3.5% per year) is forecast to grow slower than the UK market (5.4% per year).

High Growth Revenue: NWG's revenue (3.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NWG's Return on Equity is forecast to be low in 3 years time (6.9%).


Past Performance

How has NatWest Group performed over the past 5 years?

58.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NWG is currently unprofitable.

Growing Profit Margin: NWG is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: NWG is unprofitable, but has reduced losses over the past 5 years at a rate of 58.9% per year.

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

Earnings vs Industry: NWG is unprofitable, making it difficult to compare its past year earnings growth to the Banks industry (8%).


Return on Equity

High ROE: NWG has a negative Return on Equity (-0.12%), as it is currently unprofitable.


Financial Health

How is NatWest Group'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: NWG's Assets to Equity ratio (18x) is moderate.

Allowance for Bad Loans: NWG has a low allowance for bad loans (95%).

Low Risk Liabilities: 65% of NWG's liabilities are made up of primarily low risk sources of funding.

Loan Level: NWG has an appropriate level of Loans to Assets ratio (47%).

Low Risk Deposits: NWG's Loans to Deposits ratio (76%) is appropriate.

Level of Bad Loans: NWG has an appropriate level of bad loans (1.7%).


Dividend

What is NatWest Group current dividend yield, its reliability and sustainability?

3.90%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: NWG's dividend (3.9%) is higher than the bottom 25% of dividend payers in the UK market (1.29%).

High Dividend: NWG's dividend (3.9%) is low compared to the top 25% of dividend payers in the UK market (4.02%).


Stability and Growth of Payments

Stable Dividend: NWG has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: NWG's dividend payments have increased, but the company has only paid a dividend for 3 years.


Current Payout to Shareholders

Dividend Coverage: NWG is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: NWG's dividends in 3 years are forecast to be well covered by earnings (37% payout ratio).


Next Steps

Management

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

2.8yrs

Average management tenure


CEO

Alison Rose-Slade (51 yo)

1.58yrs

Tenure

UK£2,615,000

Compensation

Ms. Alison Marie Rose-Slade, BA (Hons) has been Executive Director at NatWest Group Plc (formerly known as Royal Bank of Scotland Group Plc) since December 03, 2018 and its CEO since November 01, 2019. She...


CEO Compensation Analysis

Compensation vs Market: Alison's total compensation ($USD3.69M) is about average for companies of similar size in the UK market ($USD3.41M).

Compensation vs Earnings: Alison's compensation has increased whilst the company is unprofitable.


Leadership Team

Experienced Management: NWG's management team is considered experienced (2.8 years average tenure).


Board Members

Experienced Board: NWG's board of directors are considered experienced (5.3 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: NWG insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

NatWest Group plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: NatWest Group plc
  • Ticker: NWG
  • Exchange: LSE
  • Founded: 1727
  • Industry: Diversified Banks
  • Sector: Banks
  • Market Cap: UK£23.699b
  • Shares outstanding: 11.56b
  • Website: https://www.natwestgroup.com

Number of Employees


Location

  • NatWest Group plc
  • Gogarburn
  • 175 Glasgow Road
  • Edinburgh
  • EH12 1HQ
  • United Kingdom

Listings


Biography

NatWest Group plc, together with its subsidiaries, provides banking and financial products and services to personal, commercial, corporate, and institutional customers. It operates through Retail Banking, ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/06/14 18:39
End of Day Share Price2021/06/14 00:00
Earnings2021/03/31
Annual Earnings2020/12/31


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.