LSE:REL

Stock Analysis Report

Executive Summary

RELX PLC provides information based-analytics and decision tools for professional and business customers in the United States and internationally.


Snowflake Analysis

Established dividend payer with limited growth.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

1.3%

REL

0.7%

GB Professional Services

-3.0%

GB Market


1 Year Return

25.1%

REL

27.4%

GB Professional Services

11.0%

GB Market

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

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


Shareholder returns

RELIndustryMarket
7 Day1.3%0.7%-3.0%
30 Day4.9%2.4%-2.4%
90 Day9.7%10.3%3.9%
1 Year28.2%25.1%30.4%27.4%16.8%11.0%
3 Year52.9%42.2%59.2%48.4%20.0%4.7%
5 Year97.4%74.6%111.2%86.4%38.9%6.8%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

25.98x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: REL (£19.75) is trading above our estimate of fair value (£18.56)

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


Price To Earnings Ratio

PE vs Industry: REL is poor value based on its PE Ratio (25.4x) compared to the Professional Services industry average (24.2x).

PE vs Market: REL is poor value based on its PE Ratio (25.4x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: REL is poor value based on its PEG Ratio (4.7x)


Price to Book Ratio

PB vs Industry: REL is overvalued based on its PB Ratio (17.4x) compared to the GB Professional Services industry average (3x).


Next Steps

Future Growth

How is RELX forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

5.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: REL's forecast earnings growth (5.4% per year) is above the savings rate (0.5%).

Earnings vs Market: REL's earnings (5.4% per year) are forecast to grow slower than the UK market (11.7% per year).

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

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

High Growth Revenue: REL's revenue (3.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: REL's Return on Equity is forecast to be very high in 3 years time (61%).


Next Steps

Past Performance

How has RELX performed over the past 5 years?

11.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: REL has high quality earnings.

Growing Profit Margin: REL's current net profit margins (19.7%) are lower than last year (22.6%).


Past Earnings Growth Analysis

Earnings Trend: REL's earnings have grown by 11.7% per year over the past 5 years.

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

Earnings vs Industry: REL had negative earnings growth (-7.4%) over the past year, making it difficult to compare to the Professional Services industry average (16%).


Return on Equity

High ROE: Whilst REL's Return on Equity (68.41%) is outstanding, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is RELX's financial position?


Financial Position Analysis

Short Term Liabilities: REL's short term assets (£2.1B) do not cover its short term liabilities (£4.7B).

Long Term Liabilities: REL's short term assets (£2.1B) do not cover its long term liabilities (£7.1B).


Debt to Equity History and Analysis

Debt Level: REL's debt to equity ratio (291.8%) is considered high.

Reducing Debt: REL's debt to equity ratio has increased from 178.5% to 291.8% over the past 5 years.

Debt Coverage: REL's debt is well covered by operating cash flow (31.7%).

Interest Coverage: REL's interest payments on its debt are well covered by EBIT (10.4x coverage).


Balance Sheet

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

Debt Coverage by Assets: REL's debt is not covered by short term assets (assets are 0.3x debt).


Next Steps

Dividend

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

2.08%

Current Dividend Yield


Dividend Yield vs Market

company2.1%marketbottom25%1.9%markettop25%5.1%industryaverage2.0%forecastin3Years2.5%

Current dividend yield vs market & industry

Notable Dividend: REL's dividend (2.13%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: REL's dividend (2.13%) is low compared to the top 25% of dividend payers in the UK market (4.95%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (55.7%), REL's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: REL's dividends in 3 years are forecast to be well covered by earnings (47.9% payout ratio).


Next Steps

Management

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

4.3yrs

Average management tenure


CEO

Erik Engstrom (56yo)

10.2yrs

Tenure

UK£8,414,000

Compensation

Mr. Erik Engstrom is Non-Executive Director of Smith & Nephew plc since January 1, 2015. He was a Partner at General Atlantic Partners. Before that he was President and Chief Operating Officer of Random Ho ...


CEO Compensation Analysis

Compensation vs Market: Erik's total compensation ($USD10.94M) is above average for companies of similar size in the UK market ($USD4.48M).

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


Management Age and Tenure

4.3yrs

Average Tenure

54yo

Average Age

Experienced Management: REL's management team is considered experienced (4.3 years average tenure).


Board Age and Tenure

5.1yrs

Average Tenure

61yo

Average Age

Experienced Board: REL's board of directors are considered experienced (5.1 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

SellUK£439,75001 May 19
Henry Udow
EntityIndividual
Role
Chief Legal Officer
Chief Legal Officer & Company Secretary
Shares25,000
Max PriceUK£17.59
SellUK£378,76027 Feb 19
Nicholas Luff
EntityIndividual
Role
Member of the Board of Directors
CFO & Executive Director
Shares21,393
Max PriceUK£17.73

Ownership Breakdown

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


Management Team

  • Erik Engstrom (56yo)

    CEO & Executive Director

    • Tenure: 10.2yrs
    • Compensation: UK£8.41m
  • Hank Udow (61yo)

    Chief Legal Officer & Company Secretary

    • Tenure: 8.8yrs
  • Nick Luff (52yo)

    CFO & Executive Director

    • Tenure: 5.8yrs
    • Compensation: UK£4.40m
  • Mike Walsh

    Chief Executive Officer of Legal

    • Tenure: 9yrs
  • Kumsal Besson (45yo)

    Chief Executive Officer of Scientific

    • Tenure: 1yrs
  • Colin Tennant

    Head of Investor Relations

    • J. Heynecke

      Senior Vice President of Product Management Pure

      • Tenure: 3.2yrs
    • Tracey Aiken

      Vice President of Operations

      • Jelena Sevo

        Chief Strategy Officer

        • Tenure: 1yrs
      • Gunjan Aggarwal

        Chief Human Resources Officer

        • Tenure: 3yrs

      Board Members

      • Andy Sukawaty (64yo)

        Non-Executive Director

        • Tenure: 0.8yrs
      • Linda Sanford (66yo)

        Non-Executive Director

        • Tenure: 7.1yrs
        • Compensation: UK£126.62k
      • Adrian Hennah (62yo)

        Independent Non-Executive Director

        • Tenure: 8.8yrs
        • Compensation: UK£119.77k
      • Anthony Habgood (73yo)

        Non-Executive Chairman

        • Tenure: 10.6yrs
        • Compensation: UK£652.36k
      • Erik Engstrom (56yo)

        CEO & Executive Director

        • Tenure: 10.2yrs
        • Compensation: UK£8.41m
      • Marike Van Lier Lels (60yo)

        Independent Non-Executive Director

        • Tenure: 4.5yrs
        • Compensation: UK£127.60k
      • Wolfhart Hauser (70yo)

        Senior Independent Director

        • Tenure: 3.8yrs
        • Compensation: UK£160.28k
      • Robert MacLeod (55yo)

        Non-Executive Director

        • Tenure: 3.8yrs
        • Compensation: UK£107.78k
      • Nick Luff (52yo)

        CFO & Executive Director

        • Tenure: 5.8yrs
        • Compensation: UK£4.40m
      • Suzanne Wood (58yo)

        Independent Non-Executive Director

        • Tenure: 2.3yrs
        • Compensation: UK£116.00k

      Company Information

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


      Key Information

      • Name: RELX PLC
      • Ticker: REL
      • Exchange: LSE
      • Founded: 1903
      • Industry: Research and Consulting Services
      • Sector: Commercial Services
      • Market Cap: UK£38.955b
      • Shares outstanding: 1.93b
      • Website: https://www.relx.com

      Number of Employees


      Location

      • RELX PLC
      • 1-3 Strand
      • London
      • Greater London
      • WC2N 5JR
      • United Kingdom

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      RELXNYSE (New York Stock Exchange)SPON ADS EACH REPR 0.25 ORD SHS GBP0.144USUSDJan 1991
      RDEDDB (Deutsche Boerse AG)SPON ADS EACH REPR 0.25 ORD SHS GBP0.144DEEURJan 1991
      RLXX.FOTCPK (Pink Sheets LLC)YesPLC Ordinary SharesUSUSDJan 1992
      RELLSE (London Stock Exchange)YesPLC Ordinary SharesGBGBPJan 1992
      RDEBDB (Deutsche Boerse AG)YesPLC Ordinary SharesDEEURJan 1992
      RELLBATS-CHIXE (BATS 'Chi-X Europe')YesPLC Ordinary SharesGBGBPJan 1992
      RENENXTAM (Euronext Amsterdam)YesPLC Ordinary SharesNLEURJan 1992
      REL NBMV (Bolsa Mexicana de Valores)YesPLC Ordinary SharesMXMXNJan 1992

      Biography

      RELX PLC provides information based-analytics and decision tools for professional and business customers in the United States and internationally. It operates through four segments: Scientific, Technical & Medical; Risk & Business Analytics; and Exhibitions. The Scientific, Technical & Medical segment provides information and analytics to institutions and professionals that enables progress in science, advance healthcare, and performance improvement. The Risk & Business Analytics segment offers information-based analytics and decision tools that combines public and industry specific content with technology and algorithms to assist in evaluating and predicting risk. The Exhibitions segment is involved in the events business. The company was formerly known as Reed Elsevier PLC and changed its name to RELX PLC in July 2015. RELX PLC was incorporated in 1903 and is headquartered 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 Analysis2020/01/27 21:42
      End of Day Share Price2020/01/27 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.