LSE:MGGT

Stock Analysis Report

Executive Summary

Meggitt PLC designs and manufactures components and sub-systems in the United Kingdom, rest of Europe, the United States, and internationally.

Rewards

Earnings are forecast to grow 19.02% per year

Pays a reliable dividend of 2.4%

Risk Analysis

Has a high level of debt

Dividend of 2.4% is not well covered by earnings

Profit margins (6.6%) are lower than last year (11.7%)



Snowflake Analysis

Average dividend payer with moderate growth potential.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

2.1%

MGGT

3.5%

GB Aerospace & Defense

1.4%

GB Market


1 Year Return

39.0%

MGGT

30.0%

GB Aerospace & Defense

12.4%

GB Market

Return vs Industry: MGGT exceeded the UK Aerospace & Defense industry which returned 28.7% over the past year.

Return vs Market: MGGT exceeded the UK Market which returned 12.7% over the past year.


Shareholder returns

MGGTIndustryMarket
7 Day2.1%3.5%1.4%
30 Day8.0%7.4%1.8%
90 Day18.4%16.2%8.8%
1 Year43.3%39.0%34.5%30.0%18.3%12.4%
3 Year76.9%60.2%29.7%16.1%23.8%8.0%
5 Year51.1%28.9%32.8%5.6%41.8%8.9%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

37.14x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: MGGT (£6.95) is trading above our estimate of fair value (£6.47)

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


Price To Earnings Ratio

PE vs Industry: MGGT is poor value based on its PE Ratio (37x) compared to the Aerospace & Defense industry average (34.3x).

PE vs Market: MGGT is poor value based on its PE Ratio (37x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: MGGT is poor value based on its PEG Ratio (1.9x)


Price to Book Ratio

PB vs Industry: MGGT is good value based on its PB Ratio (2.2x) compared to the GB Aerospace & Defense industry average (2.5x).


Next Steps

Future Growth

How is Meggitt forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

19.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MGGT's forecast earnings growth (19% per year) is above the savings rate (0.5%).

Earnings vs Market: MGGT's earnings (19% per year) are forecast to grow faster than the UK market (11.7% per year).

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

Revenue vs Market: MGGT's revenue (4.1% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: MGGT's revenue (4.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MGGT's Return on Equity is forecast to be low in 3 years time (12.4%).


Next Steps

Past Performance

How has Meggitt performed over the past 5 years?

2.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MGGT has high quality earnings.

Growing Profit Margin: MGGT's current net profit margins (6.6%) are lower than last year (11.7%).


Past Earnings Growth Analysis

Earnings Trend: MGGT's earnings have grown by 2.9% per year over the past 5 years.

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

Earnings vs Industry: MGGT had negative earnings growth (-37.3%) over the past year, making it difficult to compare to the Aerospace & Defense industry average (-13.2%).


Return on Equity

High ROE: MGGT's Return on Equity (6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Meggitt's financial position?


Financial Position Analysis

Short Term Liabilities: MGGT's short term assets (£1.1B) exceed its short term liabilities (£694.9M).

Long Term Liabilities: MGGT's short term assets (£1.1B) do not cover its long term liabilities (£1.7B).


Debt to Equity History and Analysis

Debt Level: MGGT's debt to equity ratio (46.6%) is considered high.

Reducing Debt: MGGT's debt to equity ratio has increased from 31.2% to 46.6% over the past 5 years.

Debt Coverage: MGGT's debt is well covered by operating cash flow (25.8%).

Interest Coverage: MGGT's interest payments on its debt are well covered by EBIT (7.1x coverage).


Balance Sheet

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

Debt Coverage by Assets: MGGT's debt is not covered by short term assets (assets are 1x debt).


Next Steps

Dividend

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

2.39%

Current Dividend Yield


Dividend Yield vs Market

company2.4%marketbottom25%1.8%markettop25%5.0%industryaverage2.8%forecastin3Years2.8%

Current dividend yield vs market & industry

Notable Dividend: MGGT's dividend (2.4%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: MGGT's dividend (2.4%) is low compared to the top 25% of dividend payers in the UK market (4.95%).


Stability and Growth of Payments

Stable Dividend: MGGT's dividends per share have been stable in the past 10 years.

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


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (90%), MGGT's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MGGT's dividends in 3 years are forecast to be well covered by earnings (44.1% payout ratio).


Next Steps

Management

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

2.0yrs

Average management tenure


CEO

Tony Wood 0

2yrs

Tenure

UK£2,200,000

Compensation

Mr. Anthony Wood, also known as Tony, has been Chief Executive of Meggitt PLC since January 1, 2018 and has been its Executive Director since December 1, 2016. Mr. Wood served as Chief Operating Officer of ...


CEO Compensation Analysis

Compensation vs Market: Tony's total compensation ($USD2.86M) is about average for companies of similar size in the UK market ($USD3.42M).

Compensation vs Earnings: Tony's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

2.0yrs

Average Tenure

58yo

Average Age

Experienced Management: MGGT's management team is considered experienced (2 years average tenure).


Board Age and Tenure

2.8yrs

Average Tenure

64yo

Average Age

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


Insider Trading

Insider Buying: MGGT insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUK£923,51720 Nov 19
Anthony Rudd
EntityIndividual
Role
Chairman of the Board
Non-Executive Chairman
Shares143,850
Max PriceUK£6.42
BuyUK£7,87714 Oct 19
Chris Allen
EntityIndividual
Shares1,275
Max PriceUK£6.18
BuyUK£15113 Aug 19
Hugh Clayton
EntityIndividual
Shares25
Max PriceUK£6.04
BuyUK£15113 Aug 19
Stewart Watson
EntityIndividual
Shares25
Max PriceUK£6.04
BuyUK£15113 Aug 19
Chris Allen
EntityIndividual
Shares25
Max PriceUK£6.04
BuyUK£15113 Aug 19
Anthony Wood
EntityIndividual
Role
Chief Executive Officer
CEO & Director
Shares25
Max PriceUK£6.04
BuyUK£12713 Aug 19
Philip Green
EntityIndividual
Role
Senior Key Executive
Executive Director of Commercial & Corporate Affairs
Shares21
Max PriceUK£6.04
BuyUK£12311 Jun 19
Philip Green
EntityIndividual
Role
Senior Key Executive
Executive Director of Commercial & Corporate Affairs
Shares24
Max PriceUK£5.12
BuyUK£14911 Jun 19
Anthony Wood
EntityIndividual
Role
Chief Executive Officer
CEO & Director
Shares29
Max PriceUK£5.12
BuyUK£14911 Jun 19
Hugh Clayton
EntityIndividual
Shares29
Max PriceUK£5.12
BuyUK£15411 Jun 19
Stewart Watson
EntityIndividual
Shares30
Max PriceUK£5.12
BuyUK£14911 Jun 19
Chris Allen
EntityIndividual
Shares29
Max PriceUK£5.12
BuyUK£14,92228 May 19
Guy Hachey
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares3,000
Max PriceUK£4.97
BuyUK£49,96028 May 19
Anthony Rudd
EntityIndividual
Role
Chairman of the Board
Non-Executive Chairman
Shares10,000
Max PriceUK£5.00
BuyUK£9,59221 May 19
Chris Allen
EntityIndividual
Shares1,795
Max PriceUK£5.34
BuyUK£82213 May 19
Paul Devaux
EntityIndividual
Shares152
Max PriceUK£5.41
BuyUK£3,66713 May 19
Dennis Hutton
EntityIndividual
Shares678
Max PriceUK£5.41
BuyUK£1,65013 May 19
Stewart Watson
EntityIndividual
Shares305
Max PriceUK£5.41
BuyUK£16813 May 19
Marina Thomas
EntityIndividual
Shares31
Max PriceUK£5.41
BuyUK£15011 Apr 19
Chris Allen
EntityIndividual
Shares29
Max PriceUK£5.18
BuyUK£12411 Apr 19
Philip Green
EntityIndividual
Role
Senior Key Executive
Executive Director of Commercial & Corporate Affairs
Shares24
Max PriceUK£5.18
BuyUK£15011 Apr 19
Hugh Clayton
EntityIndividual
Shares29
Max PriceUK£5.18
BuyUK£15011 Apr 19
Stewart Watson
EntityIndividual
Shares29
Max PriceUK£5.18
BuyUK£19,87009 Apr 19
Marina Thomas
EntityIndividual
Shares3,792
Max PriceUK£5.24
SellUK£103,97409 Apr 19
Marina Thomas
EntityIndividual
Shares19,825
Max PriceUK£5.24
BuyUK£15112 Mar 19
Chris Allen
EntityIndividual
Shares29
Max PriceUK£5.21
BuyUK£12512 Mar 19
Philip Green
EntityIndividual
Role
Senior Key Executive
Executive Director of Commercial & Corporate Affairs
Shares24
Max PriceUK£5.21
BuyUK£15112 Mar 19
Stewart Watson
EntityIndividual
Shares29
Max PriceUK£5.21
BuyUK£15013 Feb 19
Stewart Watson
EntityIndividual
Shares28
Max PriceUK£5.35
BuyUK£15013 Feb 19
Chris Allen
EntityIndividual
Shares28
Max PriceUK£5.35
BuyUK£12813 Feb 19
Philip Green
EntityIndividual
Role
Senior Key Executive
Executive Director of Commercial & Corporate Affairs
Shares24
Max PriceUK£5.35

Ownership Breakdown

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


Management Team

  • Philip Green (63yo)

    Executive Director of Commercial & Corporate Affairs

    • Compensation: UK£1.60m
  • Tony Wood

    CEO & Director

    • Tenure: 2yrs
    • Compensation: UK£2.20m
  • Andrew Garard (52yo)

    Group General Counsel & Director of Corporate Affairs

    • Tenure: 0.3yrs
  • Rob Meyer

    President & GM of Meggitt Thermal Systems

    • Geoff Lloyd

      Group Director of Human Resources

      • Tenure: 2.3yrs
    • Amir Allahverdi

      Group Operations Director

      • Louisa Burdett

        CFO & Executive Director

        • Tenure: 1yrs
      • Keith Jackson (58yo)

        Chief Technology Officer

        • Tenure: 6.8yrs
      • Chris Hopper

        Senior Vice President

        • Chris Bryant

          Chief Procurement Officer

          • Tenure: 2.1yrs

        Board Members

        • Guy Hachey (64yo)

          Independent Non-Executive Director

          • Tenure: 1yrs
        • Colin Day (64yo)

          Independent Non-Executive Director

          • Tenure: 4.3yrs
        • Nigel Rudd (73yo)

          Non-Executive Chairman

          • Tenure: 4.8yrs
        • Guy Berruyer (68yo)

          Senior Independent Director

          • Tenure: 0.8yrs
        • Tony Wood

          CEO & Director

          • Tenure: 2yrs
          • Compensation: UK£2.20m
        • Nancy Gioia (59yo)

          Independent Non-Executive Director

          • Tenure: 2.8yrs
        • Caroline Silver (57yo)

          Non-Executive Director

          • Tenure: 0.8yrs
        • Louisa Burdett

          CFO & Executive Director

          • Tenure: 1yrs
        • Alison J. Goligher

          Independent Non-Executive Director

          • Tenure: 5.3yrs

        Company Information

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


        Key Information

        • Name: Meggitt PLC
        • Ticker: MGGT
        • Exchange: LSE
        • Founded: 1947
        • Industry: Aerospace and Defense
        • Sector: Capital Goods
        • Market Cap: UK£5.383b
        • Shares outstanding: 771.94m
        • Website: https://www.meggitt.com

        Number of Employees


        Location

        • Meggitt PLC
        • Atlantic House
        • Aviation Park West
        • Christchurch
        • Dorset
        • BH23 6EW
        • United Kingdom

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        MEGG.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
        MGGTLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
        MGIDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
        MGGTLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
        MGGT NBMV (Bolsa Mexicana de Valores)YesOrdinary SharesMXMXNJan 1992
        MEGG.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDDec 2010

        Biography

        Meggitt PLC designs and manufactures components and sub-systems in the United Kingdom, rest of Europe, the United States, and internationally. It operates through four segments: Airframe Systems, Engine Systems, Energy & Equipment, and Services & Support. The company offers ice protection products, radomes, and structures; air data and flight display products; brake control and tyre pressure monitoring systems, and wheels and brakes; engine vibration monitoring, health and usage monitoring, and turbine monitoring and protection products; and aircraft cameras and aircraft security systems. It also provides ammunition handling, thermal, weapon scoring, and weapon training systems; energy storage, power conversion and distribution, and power generation systems; ducting systems, engine composites, and flow control valves; and fire protection and controls comprising bleed air leak detection products, cables and clamps, electronic control units, fire and overheat detection products, and fire suppression products. In addition, the company offers ground fuelling, and fuel systems and tanks; motion control actuators, electric motor drives, and electric motors; oxygen and specialty restraint safety systems; and accelerometers, ceramics, fluid sensors, magnetic and current sensors, position and inertial sensors, pressure sensors, speed sensors, and temperature sensors. Further, it provides polymer seals; heat exchangers, printed circuit heat exchangers, thermal components, and thermal management systems; and live fire and virtual trainers, as well as aftermarket services. The company serves the civil aerospace, fixed wing, military aircraft, military ground, vehicle, marine, energy and industrial, ground fuelling, defence, medical, test, and automotive markets. The company was formerly known as Meggitt Holdings Public Limited Company and changed its name to Meggitt PLC in April 1989. Meggitt PLC was founded in 1947 and is headquartered in Christchurch, the United Kingdom. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/19 20:41
        End of Day Share Price2020/01/17 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.