LSE:COST

Stock Analysis Report

Executive Summary

Costain Group PLC provides engineering solutions for various energy, water, and transportation infrastructures in the United Kingdom, Spain, and internationally.

Snowflake

Fundamentals

Undervalued established dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events


Market Performance


7 Day Return

-0.6%

COST

1.0%

GB Construction

0.08%

GB Market


1 Year Return

-53.1%

COST

-27.9%

GB Construction

3.5%

GB Market

Return vs Industry: COST underperformed the UK Construction industry which returned -27.9% over the past year.

Return vs Market: COST underperformed the UK Market which returned 3.5% over the past year.


Shareholder returns

COSTIndustryMarket
7 Day-0.6%1.0%0.08%
30 Day7.3%0.2%-1.3%
90 Day2.0%4.9%-2.2%
1 Year-50.7%-53.1%-25.1%-27.9%9.0%3.5%
3 Year-46.2%-52.0%-29.8%-39.2%18.1%3.1%
5 Year-28.3%-40.0%-9.4%-32.1%36.2%5.3%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

20.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: COST (£1.73) is trading below our estimate of fair value (£2.19)

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


Price To Earnings Ratio

PE vs Industry: COST is good value based on its PE Ratio (7.7x) compared to the Construction industry average (9.6x).

PE vs Market: COST is good value based on its PE Ratio (7.7x) compared to the UK market (16.7x).


Price to Earnings Growth Ratio

PEG Ratio: COST is good value based on its PEG Ratio (0.6x)


Price to Book Ratio

PB vs Industry: COST is good value based on its PB Ratio (1x) compared to the GB Construction industry average (1.3x).


Next Steps

Future Growth

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

12.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: COST's forecast earnings growth (12.2% per year) is above the savings rate (1.2%).

Earnings vs Market: COST's earnings (12.2% per year) are forecast to grow slower than the UK market (12.4% per year).

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

Revenue vs Market: COST's revenue is expected to decline over the next 3 years (-1% per year).

High Growth Revenue: COST's revenue is forecast to decline over the next 3 years (-1% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: COST's Return on Equity is forecast to be low in 3 years time (15.6%).


Next Steps

Past Performance

How has Costain Group performed over the past 5 years?

11.2%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: COST's earnings have grown by 11.2% per year over the past 5 years.

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

Earnings vs Industry: COST had negative earnings growth (-32.6%) over the past year, making it difficult to compare to the Construction industry average (-9.7%).


Return on Equity

High ROE: COST's Return on Equity (13.6%) is considered low.


Return on Assets

ROA vs Industry: COST's Return on Assets is below or equal to the Construction industry average last year.


Return on Capital Employed

ROCE Improving: COST has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Costain Group's financial position?


Financial Position Analysis

Short Term Liabilities: COST's short term assets (£443.4M) exceeds its short term liabilities (£328.6M)

Long Term Liabilities: COST's short term assets (443.4M) exceeds its long term liabilities (76.6M)


Debt to Equity History and Analysis

Debt Level: COST's debt to equity ratio (50.3%) is considered high

Reducing Debt: COST's debt to equity ratio has increased from 1.1% to 50.3% over the past 5 years.

Debt Coverage: COST's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: COST's interest payments on its debt are well covered by EBIT (19.3x coverage).


Balance Sheet

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

Debt Coverage by Assets: COST's debt is covered by short term assets (assets are 4.943140x debt).


Next Steps

Dividend

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

7.96%

Current Dividend Yield


Dividend Yield vs Market

company8.0%marketbottom25%2.0%markettop25%5.4%industryaverage4.3%forecastin3Years6.5%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: COST's dividend (7.96%) is higher than the bottom 25% of dividend payers in the UK market (1.98%).

High Dividend: COST's dividend (7.96%) is in the top 25% of dividend payers in the UK market (5.37%)

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (61%), COST's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: COST's dividends in 3 years are forecast to be well covered by earnings (39.4% payout ratio).


Next Steps

Management

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

0.9yrs

Average management tenure


CEO

Alex Vaughan 0

0.4yrs

Tenure

0

Mr. Alexander John Vaughan, also known as Alex, BSc (Hons), MRICS, Dip IoD, FIoD, has been the Chief Executive officer at Costain Group Plc since May 7, 2019 and has been its Member of Group Executive Boar ...


Management Age and Tenure

0.9yrs

Average Tenure

51yo

Average Age

Experienced Management: COST's management team is not considered experienced ( 0.9 years average tenure), which suggests a new team.


Board Age and Tenure

4.4yrs

Average Tenure

60yo

Average Age

Experienced Board: COST's board of directors are considered experienced (4.4 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUK£3,99703 May 19
Jacqueline de Rojas
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares1,201
Max PriceUK£3.33

Ownership Breakdown


Management Team

  • Alex Vaughan

    CEO & Member of Group Executive Board

    • Tenure: 0.4yrs
  • Martin Hunter

    Group Financial Controller & Member of Group Executive Board

    • Tenure: 20.5yrs
  • Tony Bickerstaff (55yo)

    CFO, Member of Group Executive Board & Director

    • Tenure: 13.6yrs
    • Compensation: UK£1.04m
  • Darren James (51yo)

    COO & Member of Executive Board

    • Tenure: 0.8yrs
  • Tracey Wood (50yo)

    General Counsel

    • Tenure: 11.3yrs
  • David Taylor

    Group Commercial Director & Member of Group Executive Board

    • Tenure: 4.8yrs
  • Catherine Warbrick

    Group HR Director & Member of Executive Board

    • Tenure: 0.08yrs
  • Bryony Livesey

    Head of Technology and Consultancy

    • Tenure: 0yrs
  • Maxine Mayhew

    MD of Natural Resources Division & Member of Executive Board

    • Tenure: 0.9yrs
  • Ian Parker

    MD of Transportation & Member of Executive Board

    • Tenure: 0.4yrs

Board Members

  • David McManus (66yo)

    Independent Non-Executive Director

    • Tenure: 5.4yrs
    • Compensation: UK£45.84k
  • W. L. L. Alison Wood (56yo)

    Independent Non-Executive Director

    • Tenure: 5.7yrs
    • Compensation: UK£52.84k
  • Paul Golby (68yo)

    Non-Executive Chairman

    • Tenure: 3.4yrs
    • Compensation: UK£163.00k
  • Jacqueline de Rojas (56yo)

    Independent Non-Executive Director

    • Tenure: 1.9yrs
    • Compensation: UK£45.84k
  • Tony Bickerstaff (55yo)

    CFO, Member of Group Executive Board & Director

    • Tenure: 13.6yrs
    • Compensation: UK£1.04m
  • Jane Lodge (64yo)

    Senior Independent Director

    • Tenure: 1.4yrs
    • Compensation: UK£59.55k

Company Information

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


Key Information

  • Name: Costain Group PLC
  • Ticker: COST
  • Exchange: LSE
  • Founded: 1865
  • Industry: Construction and Engineering
  • Sector: Capital Goods
  • Market Cap: UK£187.763m
  • Shares outstanding: 108.28m
  • Website: https://www.costain.com

Number of Employees


Location

  • Costain Group PLC
  • Costain House
  • Vanwall Business Park
  • Maidenhead
  • Berkshire
  • SL6 4UB
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
COSTLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1980
COSTlBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1980

Biography

Costain Group PLC provides engineering solutions for various energy, water, and transportation infrastructures in the United Kingdom, Spain, and internationally. It operates in two segments, Infrastructure ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/22 21:26
End of Day Share Price2019/10/22 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.