AIM:STM

Stock Analysis Report

Executive Summary

STM Group Plc, together with its subsidiaries, provides various financial services in Gibraltar, Malta, Jersey, Spain, the United Kingdom, and internationally.

Rewards

Trading at 75.4% below its fair value

Earnings are forecast to grow 4.77% per year

Earnings grew by 41.9% over the past year

Risk Analysis

Unstable dividend track record

Highly volatile share price over past 3 months

Large one-off items impacting financial results

Does not have a meaningful market cap (£15M)



Snowflake Analysis

Very undervalued established dividend payer.

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

5.0%

STM

4.3%

GB Capital Markets

2.3%

GB Market


1 Year Return

-54.6%

STM

30.8%

GB Capital Markets

10.7%

GB Market

Return vs Industry: STM underperformed the UK Capital Markets industry which returned 30.8% over the past year.

Return vs Market: STM underperformed the UK Market which returned 10.7% over the past year.


Shareholder returns

STMIndustryMarket
7 Day5.0%4.3%2.3%
30 Day-40.0%5.4%2.3%
90 Day-43.4%0.5%2.5%
1 Year-52.6%-54.6%34.0%30.8%16.5%10.7%
3 Year-33.8%-40.7%90.3%77.7%21.3%5.9%
5 Year48.8%29.2%135.5%107.9%41.1%8.7%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: STM (£0.25) is trading below our estimate of fair value (£1.02)

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


Price To Earnings Ratio

PE vs Industry: STM is good value based on its PE Ratio (3x) compared to the Capital Markets industry average (20.9x).

PE vs Market: STM is good value based on its PE Ratio (3x) compared to the UK market (17.6x).


Price to Earnings Growth Ratio

PEG Ratio: STM is good value based on its PEG Ratio (0.6x)


Price to Book Ratio

PB vs Industry: STM is good value based on its PB Ratio (0.4x) compared to the GB Capital Markets industry average (1.4x).


Next Steps

Future Growth

How is STM Group forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

4.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: STM's forecast earnings growth (4.8% per year) is above the savings rate (0.5%).

Earnings vs Market: STM's earnings (4.8% per year) are forecast to grow slower than the UK market (12.3% per year).

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

Revenue vs Market: STM's revenue (7.5% per year) is forecast to grow faster than the UK market (3.5% per year).

High Growth Revenue: STM's revenue (7.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: STM's Return on Equity is forecast to be low in 3 years time (11.3%).


Next Steps

Past Performance

How has STM Group performed over the past 5 years?

30.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: STM has a large one-off gain of £1.5M impacting its June 30 2019 financial results.

Growing Profit Margin: STM's current net profit margins (22.5%) are higher than last year (16.6%).


Past Earnings Growth Analysis

Earnings Trend: STM's earnings have grown significantly by 30.7% per year over the past 5 years.

Accelerating Growth: STM's earnings growth over the past year (41.9%) exceeds its 5-year average (30.7% per year).

Earnings vs Industry: STM earnings growth over the past year (41.9%) exceeded the Capital Markets industry 14.5%.


Return on Equity

High ROE: STM's Return on Equity (14.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is STM Group's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

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

Debt Coverage by Assets: STM's debt is covered by short term assets (assets are 29.4x debt).


Financial Institutions Analysis

Asset Level: STM's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if STM has a sufficient allowance for bad loans.

Low Risk Liabilities: STM reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if STM has an acceptable proportion of non-loan assets held.

Low Risk Deposits: STM has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if STM has an appropriate level of bad loans.


Next Steps

Dividend

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

7.94%

Current Dividend Yield


Dividend Yield vs Market

company7.9%marketbottom25%1.9%markettop25%5.1%industryaverage2.1%forecastin3Years9.7%

Current dividend yield vs market & industry

Notable Dividend: STM's dividend (7.94%) is higher than the bottom 25% of dividend payers in the UK market (1.9%).

High Dividend: STM's dividend (7.94%) is in the top 25% of dividend payers in the UK market (5.09%)


Stability and Growth of Payments

Stable Dividend: STM's dividend payments have been volatile in the past 10 years.

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


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (24%), STM's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: STM's dividends in 3 years are forecast to be well covered by earnings (34.7% payout ratio).


Next Steps

Management

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

3.3yrs

Average management tenure


CEO

Alan Kentish (53yo)

3.3yrs

Tenure

0

Mr. Alan Roy Kentish, ACA ACII AIRM has been the Chief Executive Officer at STM Group Plc since September 2016. Mr. Kentish served as an Interim Chief Executive Officer of STM Group Plc from April 1, 2016  ...


CEO Compensation Analysis

Compensation vs Market: Alan's total compensation ($USD0.00) is below average for companies of similar size in the UK market ($USD333.40K).

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


Management Age and Tenure

3.3yrs

Average Tenure

52yo

Average Age

Experienced Management: STM's management team is considered experienced (3.3 years average tenure).


Board Age and Tenure

3.0yrs

Average Tenure

62yo

Average Age

Experienced Board: STM's board of directors are considered experienced (3 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.


Ownership Breakdown

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


Management Team

  • Alan Kentish (53yo)

    CEO & Executive Director

    • Tenure: 3.3yrs
  • Liz Plummer (64yo)

    Company Secretary

    • Tenure: 0yrs
  • Iain Farr (47yo)

    Head of Distribution

    • Tenure: 3.9yrs
  • David Frier (52yo)

    Managing Director of International Tax Planning

    • Tenure: 0yrs
  • Sebastien Moerman (44yo)

    Managing Director of Trust & Company Management Division

    • Tenure: 0yrs
  • David Easton

    Head of Pensions

    • Tenure: 3.4yrs
  • Therese Neish (42yo)

    CFO & Executive Director

    • Tenure: 5.9yrs
  • Marina Steglich

    Head of Enterprise Risk Management

    • Tenure: 2.9yrs
  • Peter Marr (57yo)

    COO & Director

    • Tenure: 0.9yrs

Board Members

  • Graham Kettleborough (62yo)

    Independent Non-Executive Director

    • Tenure: 1.3yrs
  • Robin Ellison (70yo)

    Non-Executive Director

    • Tenure: 3yrs
  • Alan Kentish (53yo)

    CEO & Executive Director

    • Tenure: 3.3yrs
  • Malcolm Berryman (64yo)

    Independent Non-Executive Director

    • Tenure: 3.6yrs
  • Leslie Livens (72yo)

    Director of Atlas Trust Company Limited

    • Tenure: 0yrs
  • Irene Barnett (66yo)

    Director of Bellwether Corporate Services Limited

    • Tenure: 0yrs
  • Therese Neish (42yo)

    CFO & Executive Director

    • Tenure: 5.9yrs
  • Duncan Crocker (60yo)

    Non-Executive Chairman

    • Tenure: 1.3yrs
  • Peter Marr (57yo)

    COO & Director

    • Tenure: 0.9yrs

Company Information

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


Key Information

  • Name: STM Group Plc
  • Ticker: STM
  • Exchange: AIM
  • Founded: 1989
  • Industry: Asset Management and Custody Banks
  • Sector: Diversified Financials
  • Market Cap: UK£14.752m
  • Shares outstanding: 58.54m
  • Website: https://www.stmgroupplc.com

Number of Employees


Location

  • STM Group Plc
  • 5 Chancery Lane
  • Suite 315
  • London
  • Greater London
  • EC4A 1BL
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
STMAIM (London Stock Exchange AIM Market)YesOrdinary SharesGBGBPApr 2007

Biography

STM Group Plc, together with its subsidiaries, provides various financial services in Gibraltar, Malta, Jersey, Spain, the United Kingdom, and internationally. It operates in four segments: Corporate Trust ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/14 21:02
End of Day Share Price2019/12/13 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.