LSE:PSN

Stock Analysis Report

Executive Summary

Persimmon Plc, together with its subsidiaries, operates as a house builder in the United Kingdom.

Rewards

Trading at 50% below its fair value

Earnings grew by 5% over the past year

Risk Analysis

Unstable dividend track record

Shareholders have been diluted in the past year



Snowflake Analysis

Flawless balance sheet with solid track record.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

5.8%

PSN

3.2%

GB Consumer Durables

-1.1%

GB Market


1 Year Return

26.7%

PSN

33.0%

GB Consumer Durables

11.8%

GB Market

Return vs Industry: PSN underperformed the UK Consumer Durables industry which returned 34.2% over the past year.

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


Shareholder returns

PSNIndustryMarket
7 Day5.8%3.2%-1.1%
30 Day14.9%8.4%-0.8%
90 Day28.3%23.2%5.2%
1 Year41.1%26.7%42.5%33.0%17.7%11.8%
3 Year106.2%59.9%86.1%55.5%21.3%5.8%
5 Year169.5%87.6%146.3%85.0%40.0%7.7%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

46.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PSN (£27.96) is trading below our estimate of fair value (£55.92)

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


Price To Earnings Ratio

PE vs Industry: PSN is good value based on its PE Ratio (10.1x) compared to the Consumer Durables industry average (12.1x).

PE vs Market: PSN is good value based on its PE Ratio (10.1x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: PSN is poor value based on its PEG Ratio (288.1x)


Price to Book Ratio

PB vs Industry: PSN is overvalued based on its PB Ratio (3.1x) compared to the GB Consumer Durables industry average (1.7x).


Next Steps

Future Growth

How is Persimmon forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

0.009%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PSN's forecast earnings growth (0.04% per year) is below the savings rate (0.5%).

Earnings vs Market: PSN's earnings (0.04% per year) are forecast to grow slower than the UK market (11.7% per year).

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

Revenue vs Market: PSN's revenue (2.3% per year) is forecast to grow slower than the UK market (3.6% per year).

High Growth Revenue: PSN's revenue (2.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PSN's Return on Equity is forecast to be high in 3 years time (24.6%)


Next Steps

Past Performance

How has Persimmon performed over the past 5 years?

19.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PSN has high quality earnings.

Growing Profit Margin: PSN's current net profit margins (24%) are higher than last year (22.7%).


Past Earnings Growth Analysis

Earnings Trend: PSN's earnings have grown by 19.5% per year over the past 5 years.

Accelerating Growth: PSN's earnings growth over the past year (5%) is below its 5-year average (19.5% per year).

Earnings vs Industry: PSN earnings growth over the past year (5%) exceeded the Consumer Durables industry 4.4%.


Return on Equity

High ROE: PSN's Return on Equity (31%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Persimmon's financial position?


Financial Position Analysis

Short Term Liabilities: PSN's short term assets (£4.1B) exceed its short term liabilities (£1.5B).

Long Term Liabilities: PSN's short term assets (£4.1B) exceed its long term liabilities (£278.3M).


Debt to Equity History and Analysis

Debt Level: PSN is debt free.

Reducing Debt: PSN has not had any debt for past 5 years.

Debt Coverage: PSN has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: PSN has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

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

Debt Coverage by Assets: Insufficient data to determine if PSN's debt is covered by short term assets.


Next Steps

Dividend

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

7.79%

Current Dividend Yield


Dividend Yield vs Market

company7.8%marketbottom25%1.8%markettop25%5.0%industryaverage5.1%forecastin3Years7.9%

Current dividend yield vs market & industry

Notable Dividend: PSN's dividend (8.4%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: PSN's dividend (8.4%) is in the top 25% of dividend payers in the UK market (4.95%)


Stability and Growth of Payments

Stable Dividend: PSN has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: PSN's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: PSN's dividends in 3 years are forecast to be covered by earnings (82.8% payout ratio).


Next Steps

Management

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

13.8yrs

Average management tenure


CEO

Dave Jenkinson (52yo)

1.1yrs

Tenure

UK£24,986,383

Compensation

Mr. David Jenkinson, also known as Dave, has been Group Chief Executive of Persimmon Plc since February 26, 2019. He served as Interim Chief Executive Officer at Persimmon plc since December 31, 2018 until ...


CEO Compensation Analysis

Compensation vs Market: Dave's total compensation ($USD32.49M) is above average for companies of similar size in the UK market ($USD4.48M).

Compensation vs Earnings: Dave's compensation has increased by more than 20% in the past year.


Management Age and Tenure

13.8yrs

Average Tenure

58yo

Average Age

Experienced Management: PSN's management team is seasoned and experienced (13.8 years average tenure).


Board Age and Tenure

3.7yrs

Average Tenure

55yo

Average Age

Experienced Board: PSN's board of directors are considered experienced (3.7 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£13,42711 Jun 19
Rachel Kentleton
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares658
Max PriceUK£20.41
SellUK£13,42511 Jun 19
Rachel Kentleton
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares658
Max PriceUK£20.40
SellUK£11,603,43904 Mar 19
Michael Killoran
EntityIndividual
Role
Member of the Board of Directors
Group Finance Director & Director
Shares476,919
Max PriceUK£24.33
SellUK£125,15004 Mar 19
David Jenkinson
EntityIndividual
Role
Chief Executive Officer
Group Chief Executive & Executive Director
Shares5,120
Max PriceUK£24.44

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.2%.


Management Team

  • Mike Killoran (58yo)

    Group Finance Director & Director

    • Tenure: 21yrs
    • Compensation: UK£25.96m
  • Duncan Davidson (77yo)

    Founder & Life President

    • Tenure: 13.8yrs
    • Compensation: UK£94.97k
  • Dave Jenkinson (52yo)

    Group Chief Executive & Executive Director

    • Tenure: 1.1yrs
    • Compensation: UK£24.99m
  • Tracy Davison

    Company Secretary

    • Peter Jordan

      Group Planning & Land Director

      • Martyn Clark

        Regional Divisional Director for Yorkshire & South East


        Board Members

        • Roger Devlin (61yo)

          Chairman

          • Tenure: 1.6yrs
          • Compensation: UK£175.00k
        • Mike Killoran (58yo)

          Group Finance Director & Director

          • Tenure: 21yrs
          • Compensation: UK£25.96m
        • Simon Litherland (54yo)

          Independent Non-Executive Director

          • Tenure: 2.8yrs
          • Compensation: UK£60.00k
        • Marion Sears (56yo)

          Independent Non-Executive Director

          • Tenure: 7yrs
          • Compensation: UK£90.00k
        • Nigel Mills (63yo)

          Senior Independent Director

          • Tenure: 2.1yrs
          • Compensation: UK£117.55k
        • Dave Jenkinson (52yo)

          Group Chief Executive & Executive Director

          • Tenure: 1.1yrs
          • Compensation: UK£24.99m
        • Claire Thomas (49yo)

          Independent Non-Executive Director

          • Tenure: 0.4yrs
        • Rachel Kentleton (50yo)

          Independent Non-Executive Director

          • Tenure: 4.6yrs
          • Compensation: UK£75.00k

        Company Information

        Persimmon Plc's company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: Persimmon Plc
        • Ticker: PSN
        • Exchange: LSE
        • Founded: 1972
        • Industry: Homebuilding
        • Sector: Consumer Durables
        • Market Cap: UK£9.544b
        • Shares outstanding: 316.55m
        • Website: https://www.persimmonhomes.com

        Number of Employees


        Location

        • Persimmon Plc
        • Persimmon House
        • Fulford
        • York
        • North Yorkshire
        • YO19 4FE
        • United Kingdom

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        PSMM.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
        PSNLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
        OHPDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
        PSNLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
        PSMM.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDOct 2008

        Biography

        Persimmon Plc, together with its subsidiaries, operates as a house builder in the United Kingdom. The company offers apartments and family homes under the Persimmon Homes brand name; executive housing under the Charles Church brand; and social housing under the Westbury Partnerships brand name. It also provides broadband services. The company was founded in 1972 and is headquartered in York, the United Kingdom. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/23 20:42
        End of Day Share Price2020/01/23 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.