Bodycote (LSE:BOY) - Share price, News & Analysis

BOY fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	3/6
Past Performance	4/6
Financial Health	5/6
Dividends	4/6

BOY Stock Overview

Bodycote plc provides heat treatment and thermal processing services worldwide.

Rewards

Trading at 58.8% below our estimate of its fair value

Earnings are forecast to grow 15.46% per year

Earnings grew by 14775% over the past year

Risk Analysis

Unstable dividend track record

Bodycote Competitors

Weir Group

LSE:WEIR

UK£3.8b

Renold

AIM:RNO

UK£56.4m

Linde

NYSE:LIN

US$159.8b

BAE Systems

LSE:BA.

UK£23.8b

Price History & Performance

Summary of all time highs, changes and price drops for Bodycote
Historical stock prices
Current Share Price	UK£6.40
52 Week High	UK£10.07
52 Week Low	UK£5.82
Beta	1.01
1 Month Change	2.08%
3 Month Change	-15.02%
1 Year Change	-21.53%
3 Year Change	-18.59%
5 Year Change	-17.96%
Change since IPO	409.97%

Recent News & Updates

May 09

Does Bodycote (LON:BOY) Have A Healthy Balance Sheet?

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...

Apr 06

Bodycote (LON:BOY) Has Some Way To Go To Become A Multi-Bagger

If you're looking for a multi-bagger, there's a few things to keep an eye out for. Firstly, we'll want to see a proven...

Shareholder Returns

	BOY	GB Machinery	GB Market
7D	3.6%	-0.3%	1.1%
1Y	-21.5%	-16.3%	-2.5%

Return vs Industry: BOY underperformed the UK Machinery industry which returned -15.7% over the past year.

Return vs Market: BOY underperformed the UK Market which returned -2.5% over the past year.

Price Volatility

Is BOY's price volatile compared to industry and market?
BOY volatility
BOY Average Weekly Movement	6.1%
Machinery Industry Average Movement	6.5%
Market Average Movement	6.1%
10% most volatile stocks in GB Market	11.7%
10% least volatile stocks in GB Market	3.2%

Stable Share Price: BOY is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: BOY's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1923	4,757	Stephen Harris	https://www.bodycote.com

Bodycote plc provides heat treatment and thermal processing services worldwide. The company operates in two Aerospace, Defence & Energy; and Automotive & General Industrial segments. It offers heat treatment services, including altering the microstructure of metals and alloys, such as steel and aluminum to impart properties comprising surface hardness, temperature resistance, ductility, and strength; metal joining services consisting of electron beam welding, HIP diffusion bonding, hydrogen brazing, induction brazing, and vacuum and honeycomb brazing; and hot isostatic pressing (HIP) services, including isostatic pressing and HIP supporting services, as well as Powdermet technology, a manufacturing process used in the production of complex components using powder metallurgy.

Bodycote Fundamentals Summary

How do Bodycote's earnings and revenue compare to its market cap?
BOY fundamental statistics
Market Cap	UK£1.22b
Earnings (TTM)	UK£59.50m
Revenue (TTM)	UK£615.80m

20.5x

P/E Ratio

2.0x

P/S Ratio

Is BOY overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
BOY income statement (TTM)
Revenue	UK£615.80m
Cost of Revenue	UK£532.50m
Gross Profit	UK£83.30m
Other Expenses	UK£23.80m
Earnings	UK£59.50m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.31
Gross Margin	13.53%
Net Profit Margin	9.66%
Debt/Equity Ratio	13.4%

How did BOY perform over the long term?

See historical performance and comparison

Dividends

3.1%

Current Dividend Yield

64%

Payout Ratio

Valuation

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

Valuation Score

2/6

Valuation Score 2/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

>50%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: BOY (£6.4) is trading below our estimate of fair value (£15.54)

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

Price To Earnings Ratio

PE vs Industry: BOY is poor value based on its PE Ratio (20.5x) compared to the UK Machinery industry average (18.9x).

PE vs Market: BOY is poor value based on its PE Ratio (20.5x) compared to the UK market (15.3x).

Price to Earnings Growth Ratio

PEG Ratio: BOY is poor value based on its PEG Ratio (1.3x)

Price to Book Ratio

PB vs Industry: BOY's PB Ratio (1.8x) is in line with the GB Machinery industry average.

Future Growth

How is Bodycote forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

15.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: BOY's forecast earnings growth (15.5% per year) is above the savings rate (0.9%).

Earnings vs Market: BOY's earnings (15.5% per year) are forecast to grow faster than the UK market (11.1% per year).

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

Revenue vs Market: BOY's revenue (6.4% per year) is forecast to grow faster than the UK market (4.1% per year).

High Growth Revenue: BOY's revenue (6.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: BOY's Return on Equity is forecast to be low in 3 years time (13.5%).

Past Performance

How has Bodycote performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-18.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: BOY has high quality earnings.

Growing Profit Margin: BOY's current net profit margins (9.7%) are higher than last year (0.07%).

Past Earnings Growth Analysis

Earnings Trend: BOY's earnings have declined by 18% per year over the past 5 years.

Accelerating Growth: BOY's earnings growth over the past year (14775%) exceeds its 5-year average (-18% per year).

Earnings vs Industry: BOY earnings growth over the past year (14775%) exceeded the Machinery industry 54.3%.

Return on Equity

High ROE: BOY's Return on Equity (8.8%) is considered low.

Financial Health

How is Bodycote's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: BOY's short term assets (£197.1M) do not cover its short term liabilities (£263.0M).

Long Term Liabilities: BOY's short term assets (£197.1M) exceed its long term liabilities (£121.4M).

Debt to Equity History and Analysis

Debt Level: BOY's net debt to equity ratio (7.6%) is considered satisfactory.

Reducing Debt: BOY had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: BOY's debt is well covered by operating cash flow (157.4%).

Interest Coverage: BOY's interest payments on its debt are well covered by EBIT (28.1x coverage).

Balance Sheet

Dividend

What is Bodycote current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

3.13%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: BOY's dividend (3.13%) is higher than the bottom 25% of dividend payers in the UK market (1.79%).

High Dividend: BOY's dividend (3.13%) is low compared to the top 25% of dividend payers in the UK market (4.82%).

Stability and Growth of Payments

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

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

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (64.1%), BOY's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (41.3%), BOY's dividend payments are well covered by cash flows.

Next Steps

Explore strong dividend paying companies in the Capital Goods industry.

Management

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

5.6yrs

Average board tenure

CEO

Stephen Harris (63 yo)

13.33yrs

Tenure

UK£1,969,000

Compensation

Mr. Stephen C. Harris, MA, MBA, C.Eng. has been the Group Chief Executive Officer at Bodycote plc since January 12, 2009. Mr. Harris served as Business Group Director of Spectris Plc and was responsible fo...

CEO Compensation Analysis

Compensation vs Market: Stephen's total compensation ($USD2.44M) is about average for companies of similar size in the UK market ($USD1.89M).

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

Board Members

Experienced Board: BOY's board of directors are considered experienced (5.6 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.

Data	Last Updated (UTC time)
Company Analysis	2022/05/18 00:00
End of Day Share Price	2022/05/18 00:00
Earnings	2021/12/31
Annual Earnings	2021/12/31