LSE:PAG

Stock Analysis Report

Paragon Banking Group

Executive Summary

Paragon Banking Group PLC provides financial services in the United Kingdom.

Snowflake

Fundamentals

Proven track record average dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-0.4%

PAG

0.6%

GB Mortgage

-0.4%

GB Market


1 Year Return

12.4%

PAG

3.9%

GB Mortgage

4.0%

GB Market

Return vs Industry: PAG exceeded the UK Mortgage industry which returned 3.9% over the past year.

Return vs Market: PAG exceeded the UK Market which returned 4% over the past year.


Shareholder returns

PAGIndustryMarket
7 Day-0.4%0.6%-0.4%
30 Day-0.7%0.4%1.5%
90 Day18.9%6.9%3.7%
1 Year18.2%12.4%7.2%3.9%9.4%4.0%
3 Year51.8%35.1%40.4%26.1%21.4%6.0%
5 Year48.4%24.2%58.0%43.2%33.0%2.8%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

9.13x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: PAG (£5.01) is trading above our estimate of fair value (£4.34)

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


Price To Earnings Ratio

PE vs Industry: PAG is poor value based on its PE Ratio (9.1x) compared to the Mortgage industry average (8x).

PE vs Market: PAG is good value based on its PE Ratio (9.1x) compared to the UK market (17x).


Price to Earnings Growth Ratio

PEG Ratio: PAG is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: PAG is good value based on its PB Ratio (1.2x) compared to the GB Mortgage industry average (1.2x).


Next Steps

Future Growth

How is Paragon Banking Group forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

6.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PAG's forecast earnings growth (6.3% per year) is above the savings rate (1.2%).

Earnings vs Market: PAG's earnings (6.3% per year) are forecast to grow slower than the UK market (12.5% per year).

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

Revenue vs Market: PAG's revenue (7% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: PAG's revenue (7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PAG's Return on Equity is forecast to be low in 3 years time (13.4%).


Next Steps

Past Performance

How has Paragon Banking Group performed over the past 5 years?

8.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PAG has high quality earnings.

Growing Profit Margin: PAG's current net profit margins (43.6%) are lower than last year (45.5%).


Past Earnings Growth Analysis

Earnings Trend: PAG's earnings have grown by 8.3% per year over the past 5 years.

Accelerating Growth: PAG's earnings growth over the past year (15.6%) exceeds its 5-year average (8.3% per year).

Earnings vs Industry: PAG earnings growth over the past year (15.6%) exceeded the Mortgage industry 0.8%.


Return on Equity

High ROE: PAG's Return on Equity (13.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Paragon Banking 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

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

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


Financial Institutions Analysis

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

Allowance for Bad Loans: Insufficient data to determine if PAG has a sufficient allowance for bad loans.

Low Risk Liabilities: PAG reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if PAG has an acceptable proportion of non-loan assets held.

Low Risk Deposits: PAG has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if PAG has an appropriate level of bad loans.


Next Steps

Dividend

What is Paragon Banking Group's current dividend yield, its reliability and sustainability?

3.88%

Current Dividend Yield


Dividend Yield vs Market

company3.9%marketbottom25%2.0%markettop25%5.4%industryaverage4.8%forecastin3Years4.8%

Current dividend yield vs market & industry

Notable Dividend: PAG's dividend (3.88%) is higher than the bottom 25% of dividend payers in the UK market (1.96%).

High Dividend: PAG's dividend (3.88%) is low compared to the top 25% of dividend payers in the UK market (5.37%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (38.1%), PAG's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: PAG's dividends in 3 years are forecast to be well covered by earnings (41.7% payout ratio).


Next Steps

Management

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

5.7yrs

Average management tenure


CEO

Nigel Terrington (59yo)

24.4yrs

Tenure

UK£2,607,000

Compensation

Mr. Nigel S. Terrington has been the Chief Executive of Paragon Banking Group Plc since June 1995. Mr. Terrington is Chief Executive and Director of Paragon Bank PLC. Mr. Terrington joined Paragon Group of ...


CEO Compensation Analysis

Compensation vs Market: Nigel's total compensation ($USD3.37M) is above average for companies of similar size in the UK market ($USD1.82M).

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


Management Age and Tenure

5.7yrs

Average Tenure

58.5yo

Average Age

Experienced Management: PAG's management team is seasoned and experienced (5.7 years average tenure).


Board Age and Tenure

2.2yrs

Average Tenure

60yo

Average Age

Experienced Board: PAG's board of directors are not considered experienced ( 2.2 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: PAG insiders have sold more shares than they have bought in the past 3 months.


Recent Insider Transactions

BuyUK£14,03116 Sep 19
Finlay Williamson
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares3,000
Max PriceUK£4.68
SellUK£113,32210 Sep 19
Hugo Tudor
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares25,000
Max PriceUK£4.53
SellUK£225,13623 Jul 19
Hugo Tudor
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares50,000
Max PriceUK£4.52
BuyUK£9,84301 Jul 19
Graeme Yorston
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares2,271
Max PriceUK£4.33
SellUK£214,66027 Feb 19
Hugo Tudor
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares50,000
Max PriceUK£4.30
BuyUK£9,94818 Feb 19
Barbara Ridpath
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares2,358
Max PriceUK£4.22

Ownership Breakdown

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


Management Team

  • Nigel Terrington (59yo)

    Chief Executive & Director

    • Tenure: 24.4yrs
    • Compensation: UK£2.61m
  • John Heron (60yo)

    MD of Mortgages & Director

    • Tenure: 16.8yrs
    • Compensation: UK£1.41m
  • Pam Rowland (58yo)

    Chief Operating Officer

    • Tenure: 5.8yrs
  • Tony Armitage

    Head of Redbrick Landlords Insurance

    • Tenure: 10.3yrs
  • Richard Woodman (53yo)

    CFO & Director

    • Tenure: 7.8yrs
    • Compensation: UK£1.66m
  • Dave Newcombe

    Managing Director of Commercial Lending

    • Tenure: 5.8yrs
  • Anne Barnett

    People Director

    • Tenure: 0yrs
  • Jan Greenhalgh

    Head of New Business-Asset Finance

    • Tenure: 0.8yrs
  • Anup Sangha

    Head of Credit- Asset Finance

    • Tenure: 0.8yrs
  • Marius Niekerk

    General Counsel & Company Secretary

    • Tenure: 0.08yrs

Board Members

  • Nigel Terrington (59yo)

    Chief Executive & Director

    • Tenure: 24.4yrs
    • Compensation: UK£2.61m
  • John Heron (60yo)

    MD of Mortgages & Director

    • Tenure: 16.8yrs
    • Compensation: UK£1.41m
  • Hugo Tudor (55yo)

    Independent Non-Executive Director

    • Tenure: 5yrs
    • Compensation: UK£70.00k
  • Fiona Clutterbuck (61yo)

    Independent Chairman

    • Tenure: 1.5yrs
    • Compensation: UK£164.00k
  • Peter James Hartill (69yo)

    Senior Independent Director

    • Tenure: 0yrs
    • Compensation: UK£88.00k
  • Finlay Williamson (59yo)

    Non-Executive Director

    • Tenure: 2.2yrs
    • Compensation: UK£85.00k
  • Richard Woodman (53yo)

    CFO & Director

    • Tenure: 7.8yrs
    • Compensation: UK£1.66m
  • Barbara Ridpath (62yo)

    Independent Non-Executive Director

    • Tenure: 2.2yrs
    • Compensation: UK£65.00k
  • Graeme Yorston (61yo)

    Independent Non-Executive Director

    • Tenure: 2.2yrs
    • Compensation: UK£65.00k

Company Information

Paragon Banking Group PLC's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Paragon Banking Group PLC
  • Ticker: PAG
  • Exchange: LSE
  • Founded: 1985
  • Industry: Thrifts and Mortgage Finance
  • Sector: Banks
  • Market Cap: UK£1.270b
  • Shares outstanding: 253.84m
  • Website: https://www.paragonbankinggroup.co.uk

Number of Employees


Location

  • Paragon Banking Group PLC
  • Paragon House
  • 51 Homer Road
  • Solihull
  • West Midlands
  • B91 3QJ
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PAGLSE (London Stock Exchange)YesOrdinary SharesGBGBPMar 1995
46P1DB (Deutsche Boerse AG)YesOrdinary SharesDEEURMar 1995
PAGLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPMar 1995

Biography

Paragon Banking Group PLC provides financial services in the United Kingdom. The company operates through three segments: Mortgages, Commercial Lending, and Idem Capital. The Mortgages segment offers buy-t ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/20 21:19
End of Day Share Price2019/11/20 00:00
Earnings2019/03/31
Annual Earnings2018/09/30


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.