LSE:CPG

Stock Analysis Report

Executive Summary

Compass Group PLC, through its subsidiaries, operates as a food and support services company in North America, Europe, and internationally.


Snowflake Analysis

Established dividend payer with moderate growth potential.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-1.8%

CPG

0.7%

GB Hospitality

1.7%

GB Market


1 Year Return

-30.8%

CPG

-23.0%

GB Hospitality

-21.8%

GB Market

Return vs Industry: CPG underperformed the UK Hospitality industry which returned -26.7% over the past year.

Return vs Market: CPG underperformed the UK Market which returned -23.6% over the past year.


Shareholder returns

CPGIndustryMarket
7 Day-1.8%0.7%1.7%
30 Day-21.5%-18.5%-12.0%
90 Day-34.6%-32.2%-25.3%
1 Year-29.3%-30.8%-21.0%-23.0%-17.9%-21.8%
3 Year-13.7%-22.1%-14.3%-22.8%-11.8%-22.8%
5 Year15.2%-1.0%-1.6%-16.8%0.1%-22.4%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

0.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CPG (£12.42) is trading below our estimate of fair value (£12.46)

Significantly Below Fair Value: CPG is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: CPG is good value based on its PE Ratio (17.7x) compared to the Hospitality industry average (18.1x).

PE vs Market: CPG is poor value based on its PE Ratio (17.7x) compared to the UK market (12.6x).


Price to Earnings Growth Ratio

PEG Ratio: CPG is poor value based on its PEG Ratio (1.8x)


Price to Book Ratio

PB vs Industry: CPG is overvalued based on its PB Ratio (5.9x) compared to the GB Hospitality industry average (1x).


Next Steps

Future Growth

How is Compass Group forecast to perform in the next 1 to 3 years based on estimates from 20 analysts?

10.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CPG's forecast earnings growth (10.1% per year) is above the savings rate (0.5%).

Earnings vs Market: CPG's earnings (10.1% per year) are forecast to grow slower than the UK market (15.5% per year).

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

Revenue vs Market: CPG's revenue (3.7% per year) is forecast to grow faster than the UK market (2.5% per year).

High Growth Revenue: CPG's revenue (3.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CPG's Return on Equity is forecast to be high in 3 years time (30.5%)


Next Steps

Past Performance

How has Compass Group performed over the past 5 years?

6.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CPG has high quality earnings.

Growing Profit Margin: CPG's current net profit margins (4.5%) are lower than last year (4.9%).


Past Earnings Growth Analysis

Earnings Trend: CPG's earnings have grown by 6.9% per year over the past 5 years.

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

Earnings vs Industry: CPG had negative earnings growth (-1.8%) over the past year, making it difficult to compare to the Hospitality industry average (-3.5%).


Return on Equity

High ROE: Whilst CPG's Return on Equity (33.25%) is high, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is Compass Group's financial position?


Financial Position Analysis

Short Term Liabilities: CPG's short term assets (£4.1B) do not cover its short term liabilities (£5.4B).

Long Term Liabilities: CPG's short term assets (£4.1B) do not cover its long term liabilities (£4.5B).


Debt to Equity History and Analysis

Debt Level: CPG's debt to equity ratio (115.2%) is considered high.

Reducing Debt: CPG's debt to equity ratio has reduced from 153.1% to 115.2% over the past 5 years.

Debt Coverage: CPG's debt is well covered by operating cash flow (50.4%).

Interest Coverage: CPG's interest payments on its debt are well covered by EBIT (14.6x coverage).


Balance Sheet


Next Steps

Dividend

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

3.22%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: CPG's dividend (3.22%) is higher than the bottom 25% of dividend payers in the UK market (2.59%).

High Dividend: CPG's dividend (3.22%) is low compared to the top 25% of dividend payers in the UK market (7.08%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (57.2%), CPG's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CPG's dividends in 3 years are forecast to be covered by earnings (50.5% payout ratio).


Next Steps

Management

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

4.1yrs

Average management tenure


CEO

Dominic Blakemore (50yo)

2.25s

Tenure

UK£4,659,000

Compensation

Mr. Dominic Blakemore serves as an Independent Non-Executive Director at London Stock Exchange Group Plc since January 01, 2020. Mr. Blakemore is the Group Chief Executive of Compass Group PLC since Januar ...


CEO Compensation Analysis

Compensation vs Market: Dominic's total compensation ($USD5.72M) is about average for companies of similar size in the UK market ($USD5.36M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Dominic Blakemore
Group Chief Executive & Director2.25yrsUK£4.66m0.016% £3.1m
Karen Witts
CFO & Director1yrUK£1.50m0.00069% £136.0k
Gary Green
Group COO of North America & Executive Director13yrsUK£6.01m0.017% £3.3m
Dev Amritesh
Managing Director2.67yrsno datano data
Palmer Brown
Chief Corporate Investment & Risk Officer of Compass Group North Americano datano datano data
Sandra Moura
Group Investor Relations & Corporate Affairs5.5yrsno data0.0021% £410.1k
Alison Yapp
Group General Counsel & Company Secretary1.5yrsno datano data
Michael Young
Director of Corporate Policy and Communications13.83yrsno datano data
Keith Francis
Strategic Sales Director5.5yrsno datano data
Antoine Cau
Chairman of Western Europeno datano datano data

4.1yrs

Average Tenure

54.5yo

Average Age

Experienced Management: CPG's management team is considered experienced (4.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Dominic Blakemore
Group Chief Executive & Director2.25yrsUK£4.66m0.016% £3.1m
Karen Witts
CFO & Director1yrUK£1.50m0.00069% £136.0k
Gary Green
Group COO of North America & Executive Director13yrsUK£6.01m0.017% £3.3m
Paul Walsh
Non-Executive Chairman6.17yrsno data0.0022% £439.6k
John Bason
Senior Independent Non-Executive Director1.83yrsno data0.0011% £209.0k
Nelson Luiz Silva
Non-Executive Director4.75yrsno data0.00050% £98.6k
Stefan Bomhard
Non-Executive Director3.92yrsno data0.00037% £72.9k
Ireena Vittal
Non-Executive Director4.75yrsno data0.00034% £67.0k
Carol Arrowsmith
Non-Executive Director5.83yrsno data0.00066% £130.1k
Anne-Francoise Nesmes
Non-Executive Director1.75yrsno data0.00013% £25.6k

4.8yrs

Average Tenure

58.5yo

Average Age

Experienced Board: CPG's board of directors are considered experienced (4.8 years average tenure).


Ownership

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


Insider Trading Volume

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


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

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


Key Information

  • Name: Compass Group PLC
  • Ticker: CPG
  • Exchange: LSE
  • Founded: 1941
  • Industry: Restaurants
  • Sector: Consumer Services
  • Market Cap: UK£19.715b
  • Shares outstanding: 1.59b
  • Website: https://www.compass-group.com

Number of Employees


Location

  • Compass Group PLC
  • Compass House
  • Guildford Street
  • Chertsey
  • Surrey
  • KT16 9BQ
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CMPG.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDFeb 2001
XGR2DB (Deutsche Boerse AG)YesOrdinary SharesDEEURFeb 2001
CPGLSE (London Stock Exchange)YesOrdinary SharesGBGBPFeb 2001
XGR2XTRA (XETRA Trading Platform)YesOrdinary SharesDEEURFeb 2001
CPG NBMV (Bolsa Mexicana de Valores)YesOrdinary SharesMXMXNFeb 2001
CMPG.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDJul 2001

Biography

Compass Group PLC, through its subsidiaries, operates as a food and support services company in North America, Europe, and internationally. It serves business and industry; healthcare and senior living market; education; sports and leisure; and defense, offshore, and remote sectors. The company also offers support services, such as cleaning in hospitals; reception services at corporate headquarters; managing remote camps; grounds and facilities services at schools and universities; and others. Compass Group PLC was founded in 1941 and is based in Chertsey, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/07 20:48
End of Day Share Price2020/04/07 00:00
Earnings2019/09/30
Annual Earnings2019/09/30


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.