LSE:WEIR

Stock Analysis Report

Executive Summary

The Weir Group PLC produces and sells highly-engineered equipment worldwide.

Rewards

Trading at 52.6% below its fair value

Earnings are forecast to grow 94.71% per year

Pays a reliable dividend of 6.2%

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 6.2% is not well covered by earnings

Highly volatile share price over past 3 months

Shareholders have been diluted in the past year



Snowflake Analysis

Average dividend payer and fair value.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: WEIR's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

9.0%

WEIR

0.3%

GB Machinery

-2.2%

GB Market


1 Year Return

-55.1%

WEIR

-27.1%

GB Machinery

-25.9%

GB Market

Return vs Industry: WEIR underperformed the UK Machinery industry which returned -27.1% over the past year.

Return vs Market: WEIR underperformed the UK Market which returned -25.9% over the past year.


Shareholder returns

WEIRIndustryMarket
7 Day9.0%0.3%-2.2%
30 Day-41.6%-22.5%-20.3%
90 Day-49.7%-31.8%-29.5%
1 Year-53.8%-55.1%-25.3%-27.1%-22.2%-25.9%
3 Year-59.0%-62.0%-15.3%-21.4%-16.1%-26.6%
5 Year-51.1%-57.4%-0.7%-13.8%-4.6%-26.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: WEIR (£7.57) is trading below our estimate of fair value (£15.99)

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


Price To Earnings Ratio

PE vs Industry: WEIR is unprofitable, so we can't compare its PE Ratio to the Machinery industry average.

PE vs Market: WEIR is unprofitable, so we can't compare its PE Ratio to the UK market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate WEIR's PEG Ratio to determine if it is good value.


Price to Book Ratio

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


Next Steps

Future Growth

How is Weir Group forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?

94.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WEIR is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (0.5%).

Earnings vs Market: WEIR is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: WEIR's is expected to become profitable in the next 3 years.

Revenue vs Market: WEIR's revenue (1% per year) is forecast to grow slower than the UK market (2.6% per year).

High Growth Revenue: WEIR's revenue (1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

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


Next Steps

Past Performance

How has Weir Group performed over the past 5 years?

4.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WEIR is currently unprofitable.

Growing Profit Margin: WEIR is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: WEIR is unprofitable, but has reduced losses over the past 5 years at a rate of 4% per year.

Accelerating Growth: Unable to compare WEIR's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: WEIR is unprofitable, making it difficult to compare its past year earnings growth to the Machinery industry (-2%).


Return on Equity

High ROE: WEIR has a negative Return on Equity (-23.35%), as it is currently unprofitable.


Next Steps

Financial Health

How is Weir Group's financial position?


Financial Position Analysis

Short Term Liabilities: WEIR's short term assets (£1.5B) exceed its short term liabilities (£1.2B).

Long Term Liabilities: WEIR's short term assets (£1.5B) exceed its long term liabilities (£1.1B).


Debt to Equity History and Analysis

Debt Level: WEIR's debt to equity ratio (81.3%) is considered high.

Reducing Debt: WEIR's debt to equity ratio has increased from 70.1% to 81.3% over the past 5 years.


Balance Sheet

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

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


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: WEIR has been profitable on average in the past, therefore cash runway is not a concern.

Forecast Cash Runway: WEIR has been profitable on average in the past, therefore cash runway is not a concern.


Next Steps

Dividend

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

6.20%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: WEIR's dividend (6.2%) is higher than the bottom 25% of dividend payers in the UK market (2.65%).

High Dividend: WEIR's dividend (6.2%) is low compared to the top 25% of dividend payers in the UK market (7.43%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: WEIR is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: WEIR's dividends in 3 years are forecast to be covered by earnings (53.6% payout ratio).


Next Steps

Management

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

2.4yrs

Average management tenure


CEO

Jon Stanton (52yo)

3.5s

Tenure

UK£2,270,494

Compensation

Mr. Jonathan Stanton, also known as Jon, has been the Chief Executive Officer of The Weir Group PLC since October 1, 2016 and served as its Group Finance Director from April 19, 2010 to October 3, 2016. He ...


CEO Compensation Analysis

Compensation vs Market: Jon's total compensation ($USD2.78M) is about average for companies of similar size in the UK market ($USD2.64M).

Compensation vs Earnings: Jon's compensation has increased whilst the company is unprofitable.


Leadership Team

NamePositionTenureCompensationOwnership
Jonathan Stanton
CEO & Director3.5yrsUK£2.27m0.039% £757.3k
Charles Berry
Independent Chairman (Leave of Absence)0.17yrUK£306.58k0.00083% £16.3k
John Heasley
CFO & Director3.5yrsUK£1.33m0.019% £381.8k
Garry Fingland
Chief Information Officer1yrno datano data
Stephen Christie
Head of Investor Relations5.67yrsno datano data
Graham Vanhegan
Company Secretary & Chief Legal Officer2yrsno datano data
Raymond Buchanan
Head of Communications & Public Affairs6.58yrsno datano data
Rosemary McGinness
Chief People Officer2.75yrsno datano data
Christopher Morgan
Senior Counsel1.92yrsno datano data
Jon Owens
President of Weir ESCO Division1.75yrsno datano data

2.4yrs

Average Tenure

50yo

Average Age

Experienced Management: WEIR's management team is considered experienced (2.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Jonathan Stanton
CEO & Director3.5yrsUK£2.27m0.039% £757.3k
John Heasley
CFO & Director3.5yrsUK£1.33m0.019% £381.8k
Barbara Jeremiah
Interim Chairman & Senior Independent Director0.17yrUK£60.78k0.00087% £17.1k
James McDonald
Non-Executive Director & Member of Technology Advisory Board4.5yrsUK£60.78k0.00019% £3.7k
Mary Jacobi
Employee Engagement Non-Executive Director6.25yrsUK£62.11k0.00096% £18.9k
Richard Menell
Independent Director11yrsUK£73.50k0.00039% £7.7k
Clare Chapman
Non-Executive Director2.67yrsUK£76.58k0.00018% £3.5k
Stephen Young
Non-Executive Director2.25yrsUK£71.41k0.0015% £29.9k
Anthony Hooley
Member of Technology Advisory Board5.25yrsno datano data
Jackie Mutschler
Member of Technology Advisory Board5.25yrsno datano data

4.9yrs

Average Tenure

62.5yo

Average Age

Experienced Board: WEIR's board of directors are considered experienced (4.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: WEIR insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 6.3%.


Top Shareholders

Company Information

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


Key Information

  • Name: The Weir Group PLC
  • Ticker: WEIR
  • Exchange: LSE
  • Founded: 1871
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Market Cap: UK£1.965b
  • Shares outstanding: 259.45m
  • Website: https://www.global.weir

Number of Employees


Location

  • The Weir Group PLC
  • 1 West Regent Street
  • Glasgow
  • Lanarkshire
  • G2 1RW
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WEIG.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJun 1993
WEIRLSE (London Stock Exchange)YesOrdinary SharesGBGBPJun 1993
42WDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJun 1993
WEIRLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJun 1993
WEIR NBMV (Bolsa Mexicana de Valores)YesOrdinary SharesMXMXNJun 1993
WEGR.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDJan 2012

Biography

The Weir Group PLC produces and sells highly-engineered equipment worldwide. It operates through three segments: Minerals, ESCO, and Oil & Gas. The Minerals segment offers slurry handling equipment and associated aftermarket support services for abrasive high-wear applications used in the mining and oil sands markets. The ESCO segment provides ground engaging tools for surface mining and infrastructure. The Oil & Gas segment offers products and service solutions to upstream, production, transportation, and related industries. The Weir Group PLC was founded in 1871 and is headquartered in Glasgow, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/05 21:24
End of Day Share Price2020/04/03 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.