LSE:PAG

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Paragon Banking Group

Executive Summary

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

Rewards

PE ratio (7.8x) is below the UK market (15.2x)

Earnings are forecast to grow 16.49% per year

Risk Analysis

No risks detected for PAG from our risk checks.


Snowflake Analysis

Slightly overvalued with limited growth.


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

-3.5%

PAG

-0.1%

GB Mortgage

-0.8%

GB Market


1 Year Return

-21.6%

PAG

-13.8%

GB Mortgage

-15.5%

GB Market

Return vs Industry: PAG underperformed the UK Mortgage industry which returned -13.8% over the past year.

Return vs Market: PAG underperformed the UK Market which returned -15.5% over the past year.


Shareholder returns

PAGIndustryMarket
7 Day-3.5%-0.1%-0.8%
30 Day1.8%0.8%-0.03%
90 Day2.0%7.0%5.6%
1 Year-19.4%-21.6%-12.6%-13.8%-11.5%-15.5%
3 Year-6.8%-16.6%-4.5%-10.2%-4.6%-16.3%
5 Year6.5%-11.3%-3.7%-18.8%12.5%-12.6%

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?

7.8x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: PAG (£3.48) is trading above our estimate of fair value (£2.97)

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


Price To Earnings Ratio

PE vs Industry: PAG's PE Ratio (7.8x) is in line with the GB Mortgage industry average.

PE vs Market: PAG is good value based on its PE Ratio (7.8x) compared to the UK market (15.2x).


Price to Earnings Growth Ratio

PEG Ratio: PAG is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: PAG's PB Ratio (0.8x) is in line with the GB Mortgage industry average.


Next Steps

Future Growth

How is Paragon Banking Group forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

16.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PAG's forecast earnings growth (16.5% per year) is above the savings rate (1.2%).

Earnings vs Market: PAG's earnings (16.5% per year) are forecast to grow slower than the UK market (21.6% per year).

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

Revenue vs Market: PAG's revenue (5.1% per year) is forecast to grow faster than the UK market (3.3% per year).

High Growth Revenue: PAG's revenue (5.1% 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 (10.6%).


Next Steps

  • Explore growth companies in the Banks industry.

Past Performance

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

4.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PAG has high quality earnings.

Growing Profit Margin: PAG's current net profit margins (38.7%) are lower than last year (43.6%).


Past Earnings Growth Analysis

Earnings Trend: PAG's earnings have grown by 4.8% per year over the past 5 years.

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

Earnings vs Industry: PAG had negative earnings growth (-19.8%) over the past year, making it difficult to compare to the Mortgage industry average (-10.3%).


Return on Equity

High ROE: PAG's Return on Equity (10.1%) is considered low.


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


Financial Institutions Analysis

Asset Level: PAG's Assets to Equity ratio (13.1x) 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, 100% of its liabilities are made up of higher risk sources of funding.

Loan Level: Insufficient data to determine if PAG has an appropriate level of Loans to Assets ratio.

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

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 current dividend yield, its reliability and sustainability?

4.12%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate PAG's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate PAG's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if PAG's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if PAG's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: PAG is not paying a notable dividend for the UK market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of PAG's dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

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

1.4yrs

Average management tenure


CEO

Nigel Terrington (60yo)

25.08yrs

Tenure

UK£2,875,000

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 ($USD3.64M) is above average for companies of similar size in the UK market ($USD1.21M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Nigel Terrington
Chief Executive & Director25.08yrsUK£2.88m0.31% £2.7m
Richard Woodman
CFO & Director8.42yrsUK£1.81m0.089% £786.7k
Pamela Rowland
Chief Operating Officer6.5yrsno datano data
Marius Niekerk
General Counsel & Company Secretary0.75yrno datano data
Anne Barnett
People Directorno datano datano data
Tony Armitage
Head of Redbrick Landlords Insurance11yrsno datano data
Dave Newcombe
Managing Director of Commercial Lending6.5yrsno datano data
Jan Greenhalgh
Head of New Business-Asset Finance1.42yrsno datano data
Anup Sangha
Head of Credit- Asset Finance1.42yrsno datano data
Richard Rowntree
Managing Director of Mortgages0.50yrno datano data
John Phillipou
Managing Director of Small & Medium-sized Enterprise Lending0.67yrno datano data
Ben Whibley
Chief Risk Officer0.50yrno datano data

1.4yrs

Average Tenure

59yo

Average Age

Experienced Management: PAG's management team is not considered experienced ( 1.4 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Nigel Terrington
Chief Executive & Director25.08yrsUK£2.88m0.31% £2.7m
Richard Woodman
CFO & Director8.42yrsUK£1.81m0.089% £786.7k
Hugo Tudor
Independent Non-Executive Director5.67yrsUK£85.00k0.028% £243.6k
Fiona Clutterbuck
Independent Chairman2.17yrsUK£269.00k0.0033% £29.1k
Peter James Hartill
Senior Independent Director2.08yrsUK£95.00k0.0028% £24.3k
Finlay Williamson
Independent Non-Executive Director2.83yrsUK£85.00k0.0012% £10.5k
Barbara Ridpath
Independent Non-Executive Director2.83yrsUK£65.00k0.0017% £15.2k
Graeme Yorston
Independent Non-Executive Director2.83yrsUK£65.00k0.0030% £26.2k
Alison Morris
Non-Executive Director0.33yrno data0.0016% £13.9k

2.8yrs

Average Tenure

61.5yo

Average Age

Experienced Board: PAG's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.


Ownership

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


Insider Trading Volume

Insider Buying: PAG insiders have bought more shares than they have sold 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

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£878.941m
  • Shares outstanding: 252.57m
  • 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-to-let first charge, and owner-occupied first and second charge mortgages on residential property. The Commercial Lending segment provides asset and motor finance; and financing of waste collection vehicles for local authorities, construction equipment, and complex veterinary equipment. The Commercial Lending segment provides equipment and motor finance leasing, development finance, structured lending and other offerings to SME customers The Idem Capital segment offers secured and unsecured consumer finance. The company was formerly known as The Paragon Group of Companies PLC and changed its name to Paragon Banking Group PLC in September 2017. Paragon Banking Group PLC was founded in 1985 and is headquartered in Solihull, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/13 05:14
End of Day Share Price2020/07/10 00:00
Earnings2020/03/31
Annual Earnings2019/09/30


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.