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Tesco

LSE:TSCO
Snowflake Description

Proven track record and fair value.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
TSCO
LSE
£23B
Market Cap
  1. Home
  2. GB
  3. Consumer Retailing
Company description

Tesco PLC, together with its subsidiaries, operates as a grocery retailer. The last earnings update was 38 days ago. More info.


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TSCO Share Price and Events
7 Day Returns
-1.1%
LSE:TSCO
-0.5%
GB Consumer Retailing
1.3%
GB Market
1 Year Returns
-2.6%
LSE:TSCO
-10.8%
GB Consumer Retailing
-5%
GB Market
TSCO Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Tesco (TSCO) -1.1% -4.3% 6.8% -2.6% 45.7% -21.3%
GB Consumer Retailing -0.5% -2.2% 0.1% -10.8% 21.6% -21.5%
GB Market 1.3% -1.6% 1.9% -5% 15.8% 2.5%
1 Year Return vs Industry and Market
  • TSCO outperformed the Consumer Retailing industry which returned -10.8% over the past year.
  • TSCO outperformed the Market in United Kingdom of Great Britain and Northern Ireland which returned -5% over the past year.
Price Volatility
TSCO
Industry
5yr Volatility vs Market
Related Companies

Value

 Is Tesco undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Tesco to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Tesco.

LSE:TSCO Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 15 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 6.5%
Perpetual Growth Rate 10-Year GB Government Bond Rate 1.2%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for LSE:TSCO
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year GB Govt Bond Rate 1.2%
Equity Risk Premium S&P Global 6.7%
Consumer Retailing Unlevered Beta Simply Wall St/ S&P Global 0.46
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.464 (1 + (1- 19%) (31.2%))
0.719
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
0.8
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 1.23% + (0.8 * 6.65%)
6.55%

Discounted Cash Flow Calculation for LSE:TSCO using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Tesco is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

LSE:TSCO DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (GBP, Millions) Source Present Value
Discounted (@ 6.55%)
2019 1,551.74 Analyst x6 1,456.39
2020 2,096.00 Analyst x6 1,846.33
2021 1,972.69 Analyst x7 1,630.93
2022 2,106.00 Analyst x3 1,634.16
2023 2,324.00 Analyst x1 1,692.51
2024 2,379.00 Analyst x1 1,626.10
2025 2,426.63 Est @ 2% 1,556.73
2026 2,469.57 Est @ 1.77% 1,486.93
2027 2,509.24 Est @ 1.61% 1,417.99
2028 2,546.70 Est @ 1.49% 1,350.72
Present value of next 10 years cash flows £15,698.78
LSE:TSCO DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2028 × (1 + g) ÷ (Discount Rate – g)
= £2,546.70 × (1 + 1.23%) ÷ (6.55% – 1.23%)
£48,457.72
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= £48,457.72 ÷ (1 + 6.55%)10
£25,701.04
LSE:TSCO Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= £15,698.78 + £25,701.04
£41,399.82
Equity Value per Share
(GBP)
= Total value / Shares Outstanding
= £41,399.82 / 9,734.48
£4.25
LSE:TSCO Discount to Share Price
Calculation Result
Value per share (GBP) From above. £4.25
Current discount Discount to share price of £2.39
= -1 x (£2.39 - £4.25) / £4.25
43.7%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

Current Discount
Amount off the current price Tesco is available for.
Intrinsic value
44%
Share price is £2.39 vs Future cash flow value of £4.25
Current Discount Checks
For Tesco to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
  • Tesco's share price is below the future cash flow value, and at a moderate discount (> 20%).
  • Tesco's share price is below the future cash flow value, and at a substantial discount (> 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Tesco's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Tesco's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
LSE:TSCO PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2019-02-23) in GBP £0.14
LSE:TSCO Share Price ** LSE (2019-05-17) in GBP £2.39
United Kingdom of Great Britain and Northern Ireland Consumer Retailing Industry PE Ratio Median Figure of 9 Publicly-Listed Consumer Retailing Companies 20.37x
United Kingdom of Great Britain and Northern Ireland Market PE Ratio Median Figure of 790 Publicly-Listed Companies 16.24x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Tesco.

LSE:TSCO PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= LSE:TSCO Share Price ÷ EPS (both in GBP)

= 2.39 ÷ 0.14

17.54x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Tesco is good value based on earnings compared to the GB Consumer Retailing industry average.
  • Tesco is overvalued based on earnings compared to the United Kingdom of Great Britain and Northern Ireland market.
Price based on expected Growth
Does Tesco's expected growth come at a high price?
Raw Data
LSE:TSCO PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 17.54x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 15 Analysts
10.2%per year
United Kingdom of Great Britain and Northern Ireland Consumer Retailing Industry PEG Ratio Median Figure of 7 Publicly-Listed Consumer Retailing Companies 1.6x
United Kingdom of Great Britain and Northern Ireland Market PEG Ratio Median Figure of 573 Publicly-Listed Companies 1.5x

*Line of best fit is calculated by linear regression .

LSE:TSCO PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 17.54x ÷ 10.2%

1.73x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Tesco is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Tesco's assets?
Raw Data
LSE:TSCO PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2019-02-23) in GBP £1.53
LSE:TSCO Share Price * LSE (2019-05-17) in GBP £2.39
United Kingdom of Great Britain and Northern Ireland Consumer Retailing Industry PB Ratio Median Figure of 11 Publicly-Listed Consumer Retailing Companies 1.36x
United Kingdom of Great Britain and Northern Ireland Market PB Ratio Median Figure of 1,368 Publicly-Listed Companies 1.51x
LSE:TSCO PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= LSE:TSCO Share Price ÷ Book Value per Share (both in GBP)

= 2.39 ÷ 1.53

1.56x

* Primary Listing of Tesco.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Tesco is overvalued based on assets compared to the GB Consumer Retailing industry average.
X
Value checks
We assess Tesco's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Consumer Retailing industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Consumer Retailing industry average (and greater than 0)? (1 check)
  5. Tesco has a total score of 3/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

Future Performance

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

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
10.2%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Tesco expected to grow at an attractive rate?
  • Tesco's earnings growth is expected to exceed the low risk savings rate of 1.2%.
Growth vs Market Checks
  • Tesco's earnings growth is positive but not above the United Kingdom of Great Britain and Northern Ireland market average.
  • Tesco's revenue growth is positive but not above the United Kingdom of Great Britain and Northern Ireland market average.
Annual Growth Rates Comparison
Raw Data
LSE:TSCO Future Growth Rates Data Sources
Data Point Source Value (per year)
LSE:TSCO Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 15 Analysts 10.2%
LSE:TSCO Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 15 Analysts 2.2%
United Kingdom of Great Britain and Northern Ireland Consumer Retailing Industry Earnings Growth Rate Market Cap Weighted Average 13.2%
United Kingdom of Great Britain and Northern Ireland Consumer Retailing Industry Revenue Growth Rate Market Cap Weighted Average 3.5%
United Kingdom of Great Britain and Northern Ireland Market Earnings Growth Rate Market Cap Weighted Average 10.8%
United Kingdom of Great Britain and Northern Ireland Market Revenue Growth Rate Market Cap Weighted Average 4.9%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
LSE:TSCO Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (2 months ago) See Below
Future Estimates Average of up to 15 Analyst Estimates (S&P Global) See Below
All numbers in GBP Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
LSE:TSCO Future Estimates Data
Date (Data in GBP Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2024-02-29 70,458 3,513 2,109 1
2023-02-28 68,823 3,466 2,049 1
2022-02-28 67,521 3,340 1,919 11
2021-02-28 66,278 3,232 1,730 14
2020-02-29 64,904 3,452 1,536 15
2019-02-28 64,072 2,702 1,139 16
LSE:TSCO Past Financials Data
Date (Data in GBP Millions) Revenue Cash Flow Net Income *
2019-02-23 63,182 1,966 1,322
2018-11-23 61,691 2,286 1,163
2018-08-25 60,190 2,605 997
2018-05-25 58,504 2,694 994
2018-02-24 56,818 2,782 990
2017-11-24 56,538 2,479 717
2017-08-26 56,266 2,176 451
2017-05-26 55,781 2,083 262
2017-02-25 55,295 1,989 72
2016-11-25 54,503 2,334 164
2016-08-27 53,711 2,679 255
2016-05-27 53,534 2,403 260
2016-02-27 53,357 2,126 265

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Tesco's earnings are expected to grow by 10.2% yearly, however this is not considered high growth (20% yearly).
  • Tesco's revenue is expected to grow by 2.2% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
LSE:TSCO Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (2 months ago) See Below
Future Estimates Average of up to 15 Analyst Estimates (S&P Global) See Below

All data from Tesco Company Filings, last reported 2 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

LSE:TSCO Future Estimates Data
Date (Data in GBP Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2024-02-29
2023-02-28
2022-02-28 0.21 0.23 0.20 3.00
2021-02-28 0.18 0.20 0.16 7.00
2020-02-29 0.16 0.18 0.15 7.00
2019-02-28 0.12 0.14 0.10 5.00
LSE:TSCO Past Financials Data
Date (Data in GBP Millions) EPS *
2019-02-23 0.14
2018-11-23 0.12
2018-08-25 0.11
2018-05-25 0.12
2018-02-24 0.12
2017-11-24 0.09
2017-08-26 0.06
2017-05-26 0.03
2017-02-25 0.01
2016-11-25 0.02
2016-08-27 0.03
2016-05-27 0.03
2016-02-27 0.03

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Tesco is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
X
Future performance checks
We assess Tesco's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United Kingdom of Great Britain and Northern Ireland market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United Kingdom of Great Britain and Northern Ireland market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Tesco has a total score of 1/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has Tesco performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Tesco's growth in the last year to its industry (Consumer Retailing).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Tesco has delivered over 20% year on year earnings growth in the past 5 years.
  • Tesco's 1-year earnings growth is less than its 5-year average (33.9% vs 39.2%)
  • Tesco's earnings growth has exceeded the GB Consumer Retailing industry average in the past year (33.9% vs 9.4%).
Earnings and Revenue History
Tesco's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Tesco Company Filings, last reported 2 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

LSE:TSCO Past Revenue, Cash Flow and Net Income Data
Date (Data in GBP Millions) Revenue Net Income * G+A Expenses R&D Expenses
2019-02-23 63,182.00 1,322.00 1,416.00
2018-11-23 61,690.50 1,163.00 1,363.50
2018-08-25 60,190.00 997.00 1,311.00
2018-05-25 58,504.00 993.50 1,208.50
2018-02-24 56,818.00 990.00 1,106.00
2017-11-24 56,537.50 717.00 1,082.00
2017-08-26 56,266.00 451.00 1,058.00
2017-05-26 55,780.50 261.50 1,124.00
2017-02-25 55,295.00 72.00 1,190.00
2016-11-25 54,503.00 163.50 1,242.50
2016-08-27 53,711.00 255.00 1,295.00
2016-05-27 53,534.00 260.00 1,331.00
2016-02-27 53,357.00 265.00 1,367.00
2015-11-27 54,415.50 -2,649.50 1,685.00
2015-08-29 55,474.00 -5,564.00 2,003.00
2015-05-29 55,931.00 -5,601.50 1,976.00
2015-02-28 56,388.00 -5,639.00 1,949.00
2014-11-30 57,560.50 -2,442.50 1,475.00
2014-08-23 58,733.00 754.00 1,001.00
2014-05-23 60,891.50 1,335.00 1,097.00
2014-02-22 63,050.00 1,916.00 1,193.00
2013-11-22 63,292.00 1,557.00 1,150.50
2013-08-24 63,534.00 1,198.00 1,108.00
2013-05-24 63,230.00 1,365.00 1,056.50
2013-02-23 62,926.00 1,532.00 1,005.00
2012-11-23 63,168.00 2,358.50 1,268.00
2012-08-25 63,410.00 3,185.00 1,531.00
2012-05-25 63,663.00 3,170.50 1,562.50

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Tesco has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • Tesco used its assets more efficiently than the GB Consumer Retailing industry average last year based on Return on Assets.
  • Tesco has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Tesco's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Consumer Retailing industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Tesco has a total score of 4/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is Tesco's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Tesco's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Tesco's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
  • Tesco's long term commitments exceed its cash and other short term assets.
Balance sheet
This treemap shows a more detailed breakdown of Tesco's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of physical assets or inventory.
  • Debt is covered by short term assets, assets are 1.7x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Tesco Company Filings, last reported 2 months ago.

LSE:TSCO Past Debt and Equity Data
Date (Data in GBP Millions) Total Equity Total Debt Cash & Short Term Investments
2019-02-23 14,834.00 7,272.00 2,263.00
2018-11-23 14,834.00 7,272.00 2,263.00
2018-08-25 14,373.00 7,937.00 2,838.00
2018-05-25 14,373.00 7,937.00 2,838.00
2018-02-24 10,458.00 8,726.00 3,784.00
2017-11-24 10,458.00 8,726.00 3,784.00
2017-08-26 10,549.00 11,588.00 5,944.00
2017-05-26 10,549.00 11,588.00 5,944.00
2017-02-25 6,414.00 12,153.00 5,887.00
2016-11-25 6,414.00 12,153.00 5,887.00
2016-08-27 5,911.00 14,155.00 7,019.00
2016-05-27 5,911.00 14,155.00 7,019.00
2016-02-27 8,616.00 13,943.00 5,991.00
2015-11-27 8,616.00 13,943.00 5,991.00
2015-08-29 6,158.00 12,604.00 1,934.00
2015-05-29 6,158.00 12,604.00 1,934.00
2015-02-28 7,071.00 12,659.00 2,142.00
2014-11-30 7,071.00 12,659.00 2,142.00
2014-08-23 13,466.00 13,880.00 4,228.00
2014-05-23 13,466.00 13,880.00 4,228.00
2014-02-22 14,722.00 11,365.00 3,037.00
2013-11-22 14,722.00 11,365.00 3,037.00
2013-08-24 15,699.00 10,721.00 1,963.00
2013-05-24 15,699.00 10,721.00 1,963.00
2013-02-23 16,661.00 11,019.00 1,979.00
2012-11-23 16,661.00 11,019.00 1,979.00
2012-08-25 17,456.00 12,593.00 3,355.00
2012-05-25 17,456.00 12,593.00 3,355.00
  • Tesco's level of debt (49%) compared to net worth is high (greater than 40%).
  • The level of debt compared to net worth has been reduced over the past 5 years (77.7% vs 49% today).
  • Debt is well covered by operating cash flow (27%, greater than 20% of total debt).
  • Interest payments on debt are well covered by earnings (EBIT is 7.9x coverage).
X
Financial health checks
We assess Tesco's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Tesco has a total score of 3/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

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

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
2.41%
Current annual income from Tesco dividends. Estimated to be 3.89% next year.
If you bought £2,000 of Tesco shares you are expected to receive £48 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Tesco's pays a higher dividend yield than the bottom 25% of dividend payers in United Kingdom of Great Britain and Northern Ireland (1.99%).
  • Tesco's dividend is below the markets top 25% of dividend payers in United Kingdom of Great Britain and Northern Ireland (5.21%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
LSE:TSCO Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 15 Analyst Estimates (S&P Global) See Below
United Kingdom of Great Britain and Northern Ireland Consumer Retailing Industry Average Dividend Yield Market Cap Weighted Average of 9 Stocks 3.6%
United Kingdom of Great Britain and Northern Ireland Market Average Dividend Yield Market Cap Weighted Average of 705 Stocks 4.3%
United Kingdom of Great Britain and Northern Ireland Minimum Threshold Dividend Yield 10th Percentile 1%
United Kingdom of Great Britain and Northern Ireland Bottom 25% Dividend Yield 25th Percentile 2%
United Kingdom of Great Britain and Northern Ireland Top 25% Dividend Yield 75th Percentile 5.2%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

LSE:TSCO Future Dividends Estimate Data
Date (Data in £) Dividend per Share (annual) Avg. No. Analysts
2024-02-29 0.12 1.00
2023-02-28 0.11 1.00
2022-02-28 0.10 12.00
2021-02-28 0.09 15.00
2020-02-29 0.08 16.00
2019-02-28 0.05 16.00
LSE:TSCO Past Annualized Dividends Data
Date (Data in £) Dividend per share (annual) Avg. Yield (%)
2019-04-10 0.058 2.342
2018-10-03 0.037 1.705
2018-05-10 0.040 1.600
2018-04-11 0.040 1.685
2017-10-04 0.020 1.003
2016-05-13 0.000 0.000
2016-04-13 0.000 0.000
2015-10-07 0.000 0.000
2015-05-21 0.000 0.000
2015-04-22 0.000 0.000
2014-08-29 0.113 5.446
2014-05-22 0.148 5.384
2013-05-28 0.148 4.391
2013-04-17 0.148 3.958
2012-10-03 0.148 4.266
2012-05-04 0.148 4.582
2012-04-18 0.148 4.626
2011-04-19 0.145 3.888
2009-10-06 0.123 2.967

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Dividends per share have been volatile in the past 10 years (annual drop of over 20%).
  • Dividends per share have fallen over the past 10 years.
Current Payout to shareholders
What portion of Tesco's earnings are paid to the shareholders as a dividend.
  • Dividends paid are well covered by earnings (2.4x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be covered by earnings (1.9x coverage).
X
Income/ dividend checks
We assess Tesco's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 1%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Tesco afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Tesco has a total score of 3/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

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

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Dave Lewis
COMPENSATION £4,874,000
AGE 53
TENURE AS CEO 4.7 years
CEO Bio

Mr. David Lewis, also known as Dave, has been the Group Chief Executive Officer and Executive Director at Tesco PLC since September 01, 2014. Mr. Lewis served as the President of Personal Care for Skin, Deodorants, Oral & Hair at Unilever PLC since September 1, 2011. He served as President of Personal Care at Unilever South Africa (Pty) Ltd. He served as the President of Personal Care at Unilever N.V. since May 2010. He served as the President of Americas at Unilever N.V. since 2010. He has significant experience in brand marketing, customer management and general management. Prior to joining Tesco, he worked for Unilever for nearly 30 years in a variety of different roles across Europe, Asia and the Americas. He has experience across many sectors in the UK and overseas, and has been responsible for a number of business turnarounds. He is Chair of Champions 12.3, a UN programme seeking to add momentum to the achievement of the UN Sustainable Development Target 12.3 by 2030. He served as the President of Americas at Unilever PLC from May 2010 to September 1, 2011 and also served as its Vice President of UK and Ireland. He joined Unilever from Trent Polytechnic in 1987, starting as a UCMDS trainee for Lever Brothers, based in Kingston, UK. He has had a long career at Unilever and moving through different roles in home and personal care in Europe, South America and Asia. Mr. Lewis served as Senior Vice President for Home and Personal Care, Central and Eastern Europe for three years. He then returned to the UK and his Kingston roots in 2005 as Managing Director of the UK home and personal care business. He served as the Managing Director at Unilever Indonesia's personal care business and regional innovation leader for personal care South East Asia since 1999. He served as the Marketing Director of River Plate (Argentina, Uruguay and Paraguay) since 1996. He held various brand marketing and customer management roles in home and personal care, which included launching Dove in the UK in 1992, before becoming company operations manager in 1993. He serves as the Chairman of The Unilever Group. He has been a Director at Tesco Stores Limited since November 11, 2014. He served as an Independent Non Executive Director of Sky plc (Alternative Name: British Sky Broadcasting Group plc) from November 16, 2012 to October 13, 2016. Mr. Lewis holds Advanced Management Programme from the Harvard University. Mr. Lewis completed a BA (Hons) in Business Studies at Trent Business School, Nottingham in 1987.

CEO Compensation
  • Dave's compensation has been consistent with company performance over the past year.
  • Dave's remuneration is about average for companies of similar size in United Kingdom of Great Britain and Northern Ireland.
Management Team Tenure

Average tenure and age of the Tesco management team in years:

0.9
Average Tenure
53
Average Age
  • The average tenure for the Tesco management team is less than 2 years, this suggests a new team.
Management Team

Dave Lewis

TITLE
Group Chief Executive & Executive Director
COMPENSATION
£5M
AGE
53
TENURE
4.7 yrs

Alan James Stewart

TITLE
CFO & Executive Director
COMPENSATION
£3M
AGE
58
TENURE
4.7 yrs

Charles Wilson

TITLE
Chief Executive Officer of Booker
COMPENSATION
£749K
AGE
52
TENURE
0.8 yrs

Tony Hoggett

TITLE
Chief Operating Officer
TENURE
0.9 yrs

Guus Dekkers

TITLE
Chief Technology Officer
TENURE
1.1 yrs

Adrian Morris

TITLE
Group General Counsel
TENURE
6.7 yrs

Christine Heffernan

TITLE
Group Communications Director
TENURE
0.2 yrs

Natasha Adams

TITLE
Chief People Officer
TENURE
0.9 yrs

Sarah Fitzgerald

TITLE
Head of Buying

Andrew Yaxley

TITLE
Group Chief Product Officer
TENURE
0.8 yrs
Board of Directors Tenure

Average tenure and age of the Tesco board of directors in years:

4.1
Average Tenure
60.5
Average Age
  • The tenure for the Tesco board of directors is about average.
Board of Directors

John Allan

TITLE
Non-Executive Chairman
COMPENSATION
£660K
AGE
69
TENURE
4.2 yrs

Dave Lewis

TITLE
Group Chief Executive & Executive Director
COMPENSATION
£5M
AGE
53
TENURE
4.7 yrs

Alan James Stewart

TITLE
CFO & Executive Director
COMPENSATION
£3M
AGE
58
TENURE
4.7 yrs

Byron Grote

TITLE
Independent Non-Executive Director
COMPENSATION
£128K
AGE
70
TENURE
4 yrs

Lindsey Pownall

TITLE
Independent Non-Executive Director
COMPENSATION
£101K
AGE
56
TENURE
3.1 yrs

Steve Golsby

TITLE
Independent Non-Executive Director
COMPENSATION
£98K
AGE
64
TENURE
2.6 yrs

Deanna Oppenheimer

TITLE
Senior Independent Director
COMPENSATION
£169K
AGE
60
TENURE
2.3 yrs

Mark Armour

TITLE
Independent Non-Executive Director
COMPENSATION
£84K
AGE
63
TENURE
5.7 yrs

A. B. Olsson

TITLE
Independent Non-Executive Director
COMPENSATION
£101K
AGE
61
TENURE
4.5 yrs

Alison Platt

TITLE
Independent Non-Executive Director
COMPENSATION
£86K
AGE
55
TENURE
3.1 yrs
Who owns this company?
Recent Insider Trading
  • No 3 month insider trading information.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price (£) Value (£)
30. Nov 18 Buy Stewart Gilliland Individual 28. Nov 18 28. Nov 18 348 £2.06 £718
05. Oct 18 Buy A. B. Olsson Individual 04. Oct 18 04. Oct 18 10,000 £2.15 £21,540
05. Oct 18 Buy Alison Platt Individual 04. Oct 18 04. Oct 18 16,286 £2.15 £34,933
05. Oct 18 Buy Dave Lewis Individual 05. Oct 18 05. Oct 18 50,000 £2.14 £106,850
05. Oct 18 Buy Alan James Stewart Individual 05. Oct 18 05. Oct 18 50,000 £2.14 £106,850
05. Oct 18 Buy John Allan Individual 03. Oct 18 04. Oct 18 22,000 £2.21 £47,726
24. May 18 Buy Lindsey Pownall Individual 23. May 18 23. May 18 50,000 £2.46 £123,200
X
Management checks
We assess Tesco's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Tesco has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

News

Simply Wall St News

Here's How P/E Ratios Can Help Us Understand Tesco PLC (LON:TSCO)

Check out our latest analysis for Tesco How Do You Calculate Tesco's P/E Ratio? … The formula for price to earnings is: Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS) Or for Tesco: P/E of 17.74 = £2.42 ÷ £0.14 (Based on the year to February 2019.) Is A High Price-to-Earnings Ratio Good? … The higher the P/E ratio, the higher the price tag of a business, relative to its trailing earnings.

Simply Wall St -

How Many Tesco PLC (LON:TSCO) Shares Do Institutions Own?

Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. … Companies that used to be publicly owned tend to have lower insider ownership. … Companies of this size are usually well known to retail investors, too.

Simply Wall St -

Don't Sell Tesco PLC (LON:TSCO) Before You Read This

This article is written for those who want to get better at using price to earnings ratios (P/E ratios). … To keep it practical, we'll show how Tesco PLC's (LON:TSCO) P/E ratio could help you assess the value on offer. … Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)

Simply Wall St -

Is Tesco PLC's (LON:TSCO) Stock Available For A Good Price After Accounting For Growth?

Tesco PLC (LON:TSCO) closed yesterday at £1.9025, which left some investors asking whether the high earnings potential can still be justified at this price. … Let’s take a look at some key metrics to determine whether there's any value here for current and potential future investors. … The excitement around Tesco's growth potential is not unfounded

Simply Wall St -

Why Tesco PLC's (LON:TSCO) Investor Composition Impacts Your Returns

In this article, I'm going to take a look at Tesco PLC’s (LON:TSCO) latest ownership structure, a non-fundamental factor which is important, but remains a less discussed subject among investors. … Ownership structure of a company has been found to affect share performance over time. … View our latest analysis for Tesco

Simply Wall St -

Income Investors Should Steer Clear of Tesco PLC (LON:TSCO)

A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. … Tesco PLC (LON:TSCO) has returned to shareholders over the past 10 years, an average dividend yield of 3.00% annually. … Does Tesco tick all the boxes of a great dividend stock?

Simply Wall St -

What is Behind Tesco PLC's (LON:TSCO) Superior ROE?

and want to begin learning the link between company’s fundamentals and stock market performance. … This can be measured by looking at the company’s financial leverage. … However, ROE only measures returns against equity, not debt.

Simply Wall St -

What Do Expectations Tell Us About Tesco PLC's (LON:TSCO) Margins In The Future?

With analysts forecasting … earnings growth of 15.95% annualised … over the couple of years ahead,

Simply Wall St -

What Are Analysts Saying About Tesco PLC's (LON:TSCO) Growth?

Based on Tesco PLC's (LON:TSCO) earnings update in February 2018,. … with earnings expected to grow by 29.23% in the upcoming year … the past 5-year average growth rate of -29.67%

Simply Wall St -

Is Tesco PLC (LON:TSCO) Undervalued After Accounting For Its Future Growth?

Tesco PLC (LON:TSCO) is considered a high growth stock. … However its last closing price of £2.554 left investors wondering whether this growth has already been factored into the share price. … Let’s look into this by assessing TSCO's expected growth over the next few years.

Simply Wall St -

Company Info

Description

Tesco PLC, together with its subsidiaries, operates as a grocery retailer. The company also provides retail banking and insurance services. It has operations in the United Kingdom, Ireland, the Czech Republic, Hungary, Poland, Slovakia, Malaysia, Thailand, and internationally. The company serves its customers through 6,809 stores, as well as online. Tesco PLC was founded in 1919 and is based in Welwyn Garden City, the United Kingdom.

Details
Name: Tesco PLC
TSCO
Exchange: LSE
Founded: 1919
£23,304,335,625
9,734,476,034
Website: http://www.tescoplc.com
Address: Tesco PLC
Tesco House,
Shire Park,
Welwyn Garden City,
AL7 1GA,
United Kingdom
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
LSE TSCO Ordinary Shares London Stock Exchange GB GBP 31. Jan 1975
OTCPK TSCD.F Ordinary Shares Pink Sheets LLC US USD 31. Jan 1975
DB TCO Ordinary Shares Deutsche Boerse AG DE EUR 31. Jan 1975
XTRA TCO Ordinary Shares XETRA Trading Platform DE EUR 31. Jan 1975
SWX TSCO Ordinary Shares SIX Swiss Exchange CH CHF 31. Jan 1975
BATS-CHIXE TSCOL Ordinary Shares BATS 'Chi-X Europe' GB GBP 31. Jan 1975
OTCPK TSCD.Y SPONSORED ADR Pink Sheets LLC US USD 07. Jan 1980
DB TCO1 SPONSORED ADR Deutsche Boerse AG DE EUR 07. Jan 1980
Number of employees
Current staff
Staff numbers
440,658
Tesco employees.
Industry
Food Retail
Consumer Retailing
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/05/18 20:37
End of day share price update: 2019/05/17 00:00
Last estimates confirmation: 2019/05/17
Last earnings filing: 2019/04/10
Last earnings reported: 2019/02/23
Last annual earnings reported: 2019/02/23


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

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.