LSE:CHG

Stock Analysis Report

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Market Cap

UK£868.9m

Last Updated

2021/08/02 17:56 UTC

Data Sources

Company Financials +

Executive Summary

Chemring Group PLC supplies countermeasures, sensors, and energetic solutions to aerospace, defense, and security industries in the United States, the United Kingdom, Norway, Australia, and internationally. More Details


Snowflake Analysis

Flawless balance sheet and good value.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: CHG is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: CHG's weekly volatility (4%) has been stable over the past year.


Market Performance


7 Day Return

5.2%

CHG

2.9%

GB Aerospace & Defense

0.3%

GB Market


1 Year Return

29.7%

CHG

21.3%

GB Aerospace & Defense

22.5%

GB Market

Return vs Industry: CHG exceeded the UK Aerospace & Defense industry which returned 21.3% over the past year.

Return vs Market: CHG exceeded the UK Market which returned 22.5% over the past year.


Shareholder returns

CHGIndustryMarket
7 Day5.2%2.9%0.3%
30 Day6.1%7.1%-0.8%
90 Day17.7%11.2%1.5%
1 Year31.7%29.7%27.9%21.3%27.8%22.5%
3 Year42.1%34.4%0.6%-9.3%13.3%0.9%
5 Year159.4%139.9%20.9%2.1%39.6%13.2%

Long-Term Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

35.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CHG (£3.13) is trading below our estimate of fair value (£4.86)

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


Price To Earnings Ratio

PE vs Industry: CHG is good value based on its PE Ratio (22.1x) compared to the UK Aerospace & Defense industry average (23.2x).

PE vs Market: CHG is good value based on its PE Ratio (22.1x) compared to the UK market (23.5x).


Price to Earnings Growth Ratio

PEG Ratio: CHG is poor value based on its PEG Ratio (2.4x)


Price to Book Ratio

PB vs Industry: CHG is overvalued based on its PB Ratio (2.6x) compared to the GB Aerospace & Defense industry average (2.4x).


Future Growth

How is Chemring Group forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

9.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CHG's forecast earnings growth (9.2% per year) is above the savings rate (0.9%).

Earnings vs Market: CHG's earnings (9.2% per year) are forecast to grow slower than the UK market (14.8% per year).

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

Revenue vs Market: CHG's revenue (5.7% per year) is forecast to grow faster than the UK market (4.8% per year).

High Growth Revenue: CHG's revenue (5.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CHG's Return on Equity is forecast to be low in 3 years time (12.2%).


Past Performance

How has Chemring Group performed over the past 5 years?

39.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CHG has high quality earnings.

Growing Profit Margin: CHG's current net profit margins (9.7%) are higher than last year (9.3%).


Past Earnings Growth Analysis

Earnings Trend: CHG has become profitable over the past 5 years, growing earnings by 39.6% per year.

Accelerating Growth: CHG's earnings growth over the past year (10.9%) is below its 5-year average (39.6% per year).

Earnings vs Industry: CHG earnings growth over the past year (10.9%) underperformed the Aerospace & Defense industry 16.7%.


Return on Equity

High ROE: CHG's Return on Equity (11.8%) is considered low.


Financial Health

How is Chemring Group's financial position?


Financial Position Analysis

Short Term Liabilities: CHG's short term assets (£143.2M) exceed its short term liabilities (£91.6M).

Long Term Liabilities: CHG's short term assets (£143.2M) exceed its long term liabilities (£81.0M).


Debt to Equity History and Analysis

Debt Level: CHG's debt to equity ratio (11.3%) is considered satisfactory.

Reducing Debt: CHG's debt to equity ratio has reduced from 34.3% to 11.3% over the past 5 years.

Debt Coverage: CHG's debt is well covered by operating cash flow (145.1%).

Interest Coverage: CHG's interest payments on its debt are well covered by EBIT (22x coverage).


Balance Sheet


Dividend

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

1.34%

Current Dividend Yield


Upcoming Dividend Payment

TodayAug 02 2021Ex Dividend DateAug 19 2021Dividend Pay DateSep 10 202122 days from Ex DividendBuy in the next 16 days to receive the upcoming dividend

Dividend Yield vs Market

Notable Dividend: CHG's dividend (1.34%) is higher than the bottom 25% of dividend payers in the UK market (1.32%).

High Dividend: CHG's dividend (1.34%) is low compared to the top 25% of dividend payers in the UK market (3.93%).


Stability and Growth of Payments

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

Growing Dividend: CHG's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (29.7%), CHG's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CHG'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?

3.0yrs

Average management tenure


CEO

Michael Ord

3.08yrs

Tenure

UK£1,045,000

Compensation

Mr. Michael Ord has been Group Chief Executive at Chemring Group PLC since July 01, 2018 and Director since June 1, 2018. Prior to joining Chemring, Michael worked for BAE Systems, where he held a number o...


CEO Compensation Analysis

Compensation vs Market: Michael's total compensation ($USD1.45M) is about average for companies of similar size in the UK market ($USD1.38M).

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


Leadership Team

Experienced Management: CHG's management team is considered experienced (3 years average tenure).


Board Members

Experienced Board: CHG's board of directors are not considered experienced ( 2.9 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: CHG 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

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


Key Information

  • Name: Chemring Group PLC
  • Ticker: CHG
  • Exchange: LSE
  • Founded: 1905
  • Industry: Aerospace and Defense
  • Sector: Capital Goods
  • Market Cap: UK£868.934m
  • Shares outstanding: 282.58m
  • Website: https://www.chemring.co.uk

Number of Employees


Location

  • Chemring Group PLC
  • Roke Manor
  • Old Salisbury Lane
  • Romsey
  • Hampshire
  • SO51 0ZN
  • United Kingdom

Listings


Biography

Chemring Group PLC supplies countermeasures, sensors, and energetic solutions to aerospace, defense, and security industries in the United States, the United Kingdom, Norway, Australia, and internationally...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/08/02 17:56
End of Day Share Price2021/08/02 00:00
Earnings2021/04/30
Annual Earnings2020/10/31


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.