LSE:ITRK

Stock Analysis Report

Executive Summary

Intertek Group plc provides quality and safety solutions to various industries worldwide.

Rewards

Earnings are forecast to grow 7.98% per year

Earnings have grown 25% per year over the past 5 years

Pays a reliable dividend of 1.68%

Risk Analysis

Has a high level of debt



Snowflake Analysis

Average dividend payer with moderate growth potential.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

3.6%

ITRK

1.8%

GB Professional Services

-1.1%

GB Market


1 Year Return

27.0%

ITRK

28.7%

GB Professional Services

12.7%

GB Market

Return vs Industry: ITRK underperformed the UK Professional Services industry which returned 28.7% over the past year.

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


Shareholder returns

ITRKIndustryMarket
7 Day3.6%1.8%-1.1%
30 Day4.8%4.0%-0.2%
90 Day17.3%11.5%6.0%
1 Year29.5%27.0%31.7%28.7%18.6%12.7%
3 Year88.3%79.0%62.0%51.0%21.8%6.3%
5 Year193.3%169.1%114.4%89.3%42.5%9.6%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

34.1x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ITRK (£58.92) is trading above our estimate of fair value (£39.62)

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


Price To Earnings Ratio

PE vs Industry: ITRK is poor value based on its PE Ratio (32.6x) compared to the Professional Services industry average (24.2x).

PE vs Market: ITRK is poor value based on its PE Ratio (32.6x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: ITRK is poor value based on its PEG Ratio (4.1x)


Price to Book Ratio

PB vs Industry: ITRK is overvalued based on its PB Ratio (10.7x) compared to the GB Professional Services industry average (3x).


Next Steps

Future Growth

How is Intertek Group forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

8.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ITRK's forecast earnings growth (8% per year) is above the savings rate (0.5%).

Earnings vs Market: ITRK's earnings (8% per year) are forecast to grow slower than the UK market (11.7% per year).

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

Revenue vs Market: ITRK's revenue (3.9% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: ITRK's revenue (3.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ITRK's Return on Equity is forecast to be high in 3 years time (30.9%)


Next Steps

Past Performance

How has Intertek Group performed over the past 5 years?

25.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ITRK has high quality earnings.

Growing Profit Margin: ITRK's current net profit margins (10.1%) are lower than last year (10.6%).


Past Earnings Growth Analysis

Earnings Trend: ITRK's earnings have grown significantly by 25% per year over the past 5 years.

Accelerating Growth: ITRK's earnings growth over the past year (0.6%) is below its 5-year average (25% per year).

Earnings vs Industry: ITRK earnings growth over the past year (0.6%) underperformed the Professional Services industry 16%.


Return on Equity

High ROE: Whilst ITRK's Return on Equity (34.09%) is high, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Intertek Group's financial position?


Financial Position Analysis

Short Term Liabilities: ITRK's short term assets (£991.6M) exceed its short term liabilities (£736.6M).

Long Term Liabilities: ITRK's short term assets (£991.6M) do not cover its long term liabilities (£1.3B).


Debt to Equity History and Analysis

Debt Level: ITRK's debt to equity ratio (114%) is considered high.

Reducing Debt: ITRK's debt to equity ratio has increased from 100% to 114% over the past 5 years.

Debt Coverage: ITRK's debt is well covered by operating cash flow (47.9%).

Interest Coverage: ITRK's interest payments on its debt are well covered by EBIT (14x coverage).


Balance Sheet

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

Debt Coverage by Assets: ITRK's debt is not covered by short term assets (assets are 0.9x debt).


Next Steps

Dividend

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

1.61%

Current Dividend Yield


Dividend Yield vs Market

company1.6%marketbottom25%1.8%markettop25%5.0%industryaverage1.9%forecastin3Years1.9%

Current dividend yield vs market & industry

Notable Dividend: ITRK's dividend (1.68%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: ITRK's dividend (1.68%) is low compared to the top 25% of dividend payers in the UK market (4.95%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (56%), ITRK's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ITRK's dividends in 3 years are forecast to be covered by earnings (50.1% payout ratio).


Next Steps

Management

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

4.2yrs

Average management tenure


CEO

André Pierre Lacroix (58yo)

4.7yrs

Tenure

UK£6,226,000

Compensation

Mr. Andre Pierre Joseph Lacroix has been the Chief Executive Officer at Intertek Group plc since May 16, 2015. Mr. Lacroix served as Secretary of Geomega Resources Inc. since November 1, 2010. He served as ...


CEO Compensation Analysis

Compensation vs Market: André Pierre's total compensation ($USD8.10M) is above average for companies of similar size in the UK market ($USD4.48M).

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


Management Age and Tenure

4.2yrs

Average Tenure

58yo

Average Age

Experienced Management: ITRK's management team is considered experienced (4.2 years average tenure).


Board Age and Tenure

4.1yrs

Average Tenure

58.5yo

Average Age

Experienced Board: ITRK's board of directors are considered experienced (4.1 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£19,80709 Apr 19
Lena Wilson
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares393
Max PriceUK£50.40
SellUK£19,80109 Apr 19
Lena Wilson
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares393
Max PriceUK£50.38
BuyUK£5,21613 Mar 19
Andrew Martin
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares112
Max PriceUK£46.57
BuyUK£5,21613 Mar 19
Louise Makin
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares112
Max PriceUK£46.57
BuyUK£5,72813 Mar 19
Graham Allan
EntityIndividual
Role
Lead Director
Senior Independent Non-Executive Director
Shares123
Max PriceUK£46.57
BuyUK£5,72813 Mar 19
Lena Wilson
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares123
Max PriceUK£46.57
BuyUK£16,34613 Mar 19
David Reid
EntityIndividual
Role
Chairman of the Board
Chairman
Shares351
Max PriceUK£46.57
BuyUK£5,72813 Mar 19
Gill Rider
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares123
Max PriceUK£46.57
BuyUK£5,72813 Mar 19
Gurnek Bains
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares123
Max PriceUK£46.57
BuyUK£5,82113 Mar 19
Jean-Michel Valette
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares125
Max PriceUK£46.57

Ownership Breakdown

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


Management Team

  • André Pierre Lacroix (58yo)

    CEO & Director

    • Tenure: 4.7yrs
    • Compensation: UK£6.23m
  • Tony George (55yo)

    Executive Vice President of Human Resources

    • Tenure: 4.5yrs
  • Ken Lee (63yo)

    Executive Vice President of Marketing & Communications

    • Tenure: 3.3yrs
  • Gregg Tiemann

    Executive Vice President of Americas

    • Tenure: 12yrs
  • Ross McCluskey

    Group CFO & Executive Director

    • Tenure: 1.4yrs
    • Compensation: UK£809.05k
  • Julia Thomas

    Senior Vice President of Corporate Development

    • Tenure: 3.7yrs
  • Raymond Pirie

    Vice President of Exploration & Production

    • Ian Galloway

      Executive Vice President of Middle-East

      • Tenure: 4.2yrs
    • Mark Thomas

      Group General Counsel

      • Tenure: 5yrs
    • Diane Bitzel

      Group Chief Information Officer

      • Tenure: 1.7yrs

    Board Members

    • Jean-Michel Valette (58yo)

      Non-Executive Director

      • Tenure: 2.5yrs
      • Compensation: UK£75.00k
    • Gill Rider (64yo)

      Non-Executive Director

      • Tenure: 4.5yrs
      • Compensation: UK£77.00k
    • David Reid (72yo)

      Chairman

      • Tenure: 8yrs
      • Compensation: UK£352.00k
    • Andy Martin (59yo)

      Non-Executive Director

      • Tenure: 3.7yrs
      • Compensation: UK£90.00k
    • André Pierre Lacroix (58yo)

      CEO & Director

      • Tenure: 4.7yrs
      • Compensation: UK£6.23m
    • Louise Makin (58yo)

      Non-Executive Director

      • Tenure: 7.5yrs
      • Compensation: UK£75.00k
    • Graham Allan (64yo)

      Senior Independent Non-Executive Director

      • Tenure: 2.3yrs
      • Compensation: UK£87.00k
    • Lena Wilson (55yo)

      Non-Executive Director

      • Tenure: 7.5yrs
      • Compensation: UK£86.00k
    • Ross McCluskey

      Group CFO & Executive Director

      • Tenure: 1.4yrs
      • Compensation: UK£809.05k
    • Gurnek Bains

      Non-Executive Director

      • Tenure: 2.5yrs
      • Compensation: UK£75.00k

    Company Information

    Intertek Group plc's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Intertek Group plc
    • Ticker: ITRK
    • Exchange: LSE
    • Founded: 1885
    • Industry: Research and Consulting Services
    • Sector: Commercial Services
    • Market Cap: UK£9.930b
    • Shares outstanding: 160.94m
    • Website: https://www.intertek.com

    Number of Employees


    Location

    • Intertek Group plc
    • 33 Cavendish Square
    • London
    • Greater London
    • W1G 0PS
    • United Kingdom

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    ITRKLSE (London Stock Exchange)YesOrdinary SharesGBGBPMay 2002
    IT1DB (Deutsche Boerse AG)YesOrdinary SharesDEEURMay 2002
    IKTS.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDMay 2002
    ITRKLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPMay 2002
    ITRK NBMV (Bolsa Mexicana de Valores)YesOrdinary SharesMXMXNMay 2002
    IKTS.YOTCPK (Pink Sheets LLC)ADRUSUSDOct 2008

    Biography

    Intertek Group plc provides quality and safety solutions to various industries worldwide. It operates in three segments: Products, Trade, and Resources. The Products segment offers assurance, testing, inspection, and certification services (ATIC), including laboratory safety, quality and performance testing, second-party supplier auditing, sustainability analysis, products assurance, vendor compliance, process performance analysis, facility plant and equipment verification, and third party certification. This segment serves a range of industries including textiles, footwear, toys, hardlines, home appliances, consumer electronics, information and communication technology, automotive, aerospace, lighting, building products, industrial and renewable energy products, food and hospitality, healthcare and beauty, and pharmaceuticals. The Trade segment provides cargo inspection, analytical assessment, calibration, and related research and technical services to the petroleum and biofuels industries; inspection services to governments and regulatory bodies to support trade activities; and analytical and testing services to agricultural trading companies and growers. The Resources segment offers technical inspection, asset integrity management, analytical testing, and ongoing training services for the oil, gas, nuclear, and power industries. This segment also provides a range of ATIC service solutions to the mining and minerals exploration industries covering the resource supply chain. The company also offers cyber security services for products, devices, and networks across various industries. Intertek Group plc was founded in 1885 and is based in London, the United Kingdom. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/26 20:42
    End of Day Share Price2020/01/24 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.