LSE:SPX

Stock Analysis Report

Spirax-Sarco Engineering

Executive Summary

Spirax-Sarco Engineering plc provides engineered solutions for users of industrial and commercial steam systems, electrical heating and temperature management systems, and process fluid paths and pumping systems.


Snowflake Analysis

Outstanding track record with moderate growth potential.


Similar Companies

Share Price & News

How has Spirax-Sarco Engineering's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

1.0%

SPX

-1.0%

GB Machinery

-0.5%

GB Market


1 Year Return

38.1%

SPX

8.4%

GB Machinery

6.0%

GB Market

Return vs Industry: SPX exceeded the UK Machinery industry which returned 8.9% over the past year.

Return vs Market: SPX exceeded the UK Market which returned 6.5% over the past year.


Shareholder returns

SPXIndustryMarket
7 Day1.0%-1.0%-0.5%
30 Day2.3%-1.7%-1.8%
90 Day4.9%-0.4%2.4%
1 Year39.9%38.1%11.5%8.4%11.5%6.0%
3 Year120.8%111.5%27.2%17.3%18.2%3.5%
5 Year218.1%182.9%44.5%24.1%34.3%3.5%

Price Volatility Vs. Market

How volatile is Spirax-Sarco Engineering's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Spirax-Sarco Engineering undervalued compared to its fair value and its price relative to the market?

31.18x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SPX (£93.65) is trading above our estimate of fair value (£44.85)

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


Price To Earnings Ratio

PE vs Industry: SPX is poor value based on its PE Ratio (31.2x) compared to the Machinery industry average (17.6x).

PE vs Market: SPX is poor value based on its PE Ratio (31.2x) compared to the UK market (18.6x).


Price to Earnings Growth Ratio

PEG Ratio: SPX is poor value based on its PEG Ratio (6.1x)


Price to Book Ratio

PB vs Industry: SPX is overvalued based on its PB Ratio (8.9x) compared to the GB Machinery industry average (1.6x).


Next Steps

Future Growth

How is Spirax-Sarco Engineering forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

5.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SPX's forecast earnings growth (5.1% per year) is above the savings rate (0.5%).

Earnings vs Market: SPX's earnings (5.1% per year) are forecast to grow slower than the UK market (12.9% per year).

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

Revenue vs Market: SPX's revenue (4.5% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: SPX's revenue (4.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SPX's Return on Equity is forecast to be high in 3 years time (23.1%)


Next Steps

Past Performance

How has Spirax-Sarco Engineering performed over the past 5 years?

19.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SPX has high quality earnings.

Growing Profit Margin: SPX's current net profit margins (18.5%) are higher than last year (15.6%).


Past Earnings Growth Analysis

Earnings Trend: SPX's earnings have grown by 19.7% per year over the past 5 years.

Accelerating Growth: SPX's earnings growth over the past year (27%) exceeds its 5-year average (19.7% per year).

Earnings vs Industry: SPX earnings growth over the past year (27%) exceeded the Machinery industry 2.6%.


Return on Equity

High ROE: SPX's Return on Equity (28.5%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Spirax-Sarco Engineering's financial position?


Financial Position Analysis

Short Term Liabilities: SPX's short term assets (£656.9M) exceed its short term liabilities (£298.9M).

Long Term Liabilities: SPX's short term assets (£656.9M) do not cover its long term liabilities (£677.9M).


Debt to Equity History and Analysis

Debt Level: SPX's debt to equity ratio (71.7%) is considered high.

Reducing Debt: SPX's debt to equity ratio has increased from 27.2% to 71.7% over the past 5 years.

Debt Coverage: SPX's debt is well covered by operating cash flow (35.6%).

Interest Coverage: SPX's interest payments on its debt are well covered by EBIT (39.6x coverage).


Balance Sheet

Inventory Level: SPX has a high level of physical assets or inventory.

Debt Coverage by Assets: SPX's debt is covered by short term assets (assets are 1.2x debt).


Next Steps

Dividend

What is Spirax-Sarco Engineering's current dividend yield, its reliability and sustainability?

1.07%

Current Dividend Yield


Dividend Yield vs Market

company1.1%marketbottom25%1.8%markettop25%5.0%industryaverage2.6%forecastin3Years1.3%

Current dividend yield vs market & industry

Notable Dividend: SPX's dividend (1.07%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.8%).

High Dividend: SPX's dividend (1.07%) is low compared to the top 25% of dividend payers in the UK market (5.07%).


Stability and Growth of Payments

Stable Dividend: SPX is not paying a notable dividend for the UK market, therefore no need to check if payments are stable.

Growing Dividend: SPX is not paying a notable dividend for the UK market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

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


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of SPX'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?

6.1yrs

Average management tenure


CEO

Nick Anderson (58yo)

6.1yrs

Tenure

UK£2,323,478

Compensation

Mr. Nicholas J. Anderson, also known as Nick, BSc Civil Engineering, MBA, has been the Group Chief Executive, and Executive Director of Spirax-Sarco Engineering plc since January 16, 2014 and March 15, 201 ...


CEO Compensation Analysis

Compensation vs Market: Nick's total compensation ($USD3.00M) is about average for companies of similar size in the UK market ($USD3.31M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Nicholas Anderson
Group Chief Executive & Executive Director6.1yrsUK£2.32m0.049% £3.3m
Kevin Boyd
CFO & Executive Director3.8yrsUK£1.44m0.012% £810.8k
Neil Daws
MD of Steam Specialties Business & Executive Director16.7yrsUK£1.28m0.052% £3.6m
Andy Robson
General Counsel & Company Secretary7.7yrsno data0.0023% £160.6k
Jim Devine
Group Human Resources Director0yrsno datano data
Shaun Laubscher
Head of Talent & Organisational Development0yrsno datano data
Dan Harvey
Head of Internal Audit0yrsno datano data
Charles Song
President & GM of Spirax Sarco Engineering(China) Ltd0yrsno datano data
John Senior
Group Financial Controller0yrsno datano data

6.1yrs

Average Tenure

56.5yo

Average Age

Experienced Management: SPX's management team is seasoned and experienced (6.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Nicholas Anderson
Group Chief Executive & Executive Director6.1yrsUK£2.32m0.049% £3.3m
Kevin Boyd
CFO & Executive Director3.8yrsUK£1.44m0.012% £810.8k
Neil Daws
MD of Steam Specialties Business & Executive Director16.7yrsUK£1.28m0.052% £3.6m
James Robert Pike
Independent Chairman of the Board1.8yrsUK£154.53k0.012% £809.4k
Kevin Thompson
Independent Non-Executive Director0.8yrsno data0.0034% £234.4k
Jane Kingston
Independent Non-Executive Director3.4yrsUK£60.30k0.0035% £241.3k
Peter France
Independent Non-Executive Director1.9yrsUK£41.40k0.0013% £91.7k
G. Schoolenberg
Senior Independent Director1.1yrsUK£50.30k0.0037% £257.9k
Caroline Johnstone
Independent Non-Executive Director0.9yrsno datano data

1.9yrs

Average Tenure

58yo

Average Age

Experienced Board: SPX's board of directors are not considered experienced ( 1.9 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: Insufficient data to determine if 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

Spirax-Sarco Engineering plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Spirax-Sarco Engineering plc
  • Ticker: SPX
  • Exchange: LSE
  • Founded: 1888
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Market Cap: UK£6.895b
  • Shares outstanding: 73.62m
  • Website: https://www.spiraxsarcoengineering.com

Number of Employees


Location

  • Spirax-Sarco Engineering plc
  • Charlton House
  • Cirencester Road
  • Cheltenham
  • Gloucestershire
  • GL53 8ER
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SPXLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
SPXS.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
SPXLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
1LNBDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
SPX NBMV (Bolsa Mexicana de Valores)YesOrdinary SharesMXMXNJan 1992
SPXS.YOTCPK (Pink Sheets LLC)ADRUSUSDMay 2011

Biography

Spirax-Sarco Engineering plc provides engineered solutions for users of industrial and commercial steam systems, electrical heating and temperature management systems, and process fluid paths and pumping systems. It offers industrial and commercial steam systems, including condensate management, controls, and thermal energy management products and solutions for heating and curing, cleaning and sterilising, hot water generation, space heating, and humidification; electrical process heating and temperature management solutions, such as industrial heaters and systems, heat tracing, and various component technologies; and peristaltic and niche pumps and associated fluid path technologies, including pumps, tubing, and specialty filling systems and products for single-use applications. The company serves food, beverage, pharmaceutical and biotechnology, oil, gas, chemical, healthcare, power generation, mining, precious metal processing, water and wastewater, pulp and paper, rubber and plastic, textile, and other sectors; and original equipment manufacturers. Its products are also used to provide space heating, humidification, and hot water in public and private buildings. The company sells its products directly, as well as through distributors. It operates in Europe, the Middle East, and Africa; the Asia Pacific; and the Americas. The company was founded in 1888 and is headquartered in Cheltenham, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/24 20:39
End of Day Share Price2020/02/24 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.