Rathbones Group (LSE:RAT) - Share price, News & Analysis

RAT fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	2/6
Past Performance	4/6
Financial Health	4/6
Dividends	4/6

RAT Stock Overview

Rewards

Trading at 42.8% below our estimate of its fair value

Earnings are forecast to grow 6.14% per year

Earnings grew by 182.3% over the past year

Risk Analysis

High level of non-cash earnings

Dividend of 3.91% is not well covered by earnings

Significant insider selling over the past 3 months

Shareholders have been diluted in the past year

Rathbones Group Competitors

Man Group

LSE:EMG

UK£3.1b

Quilter

LSE:QLT

UK£2.0b

Brooks Macdonald Group

AIM:BRK

UK£356.6m

WH Ireland Group

AIM:WHI

UK£23.4m

Price History & Performance

Summary of all time highs, changes and price drops for Rathbones Group
Historical stock prices
Current Share Price	UK£20.70
52 Week High	UK£22.30
52 Week Low	UK£14.26
Beta	0.60
1 Month Change	-3.27%
3 Month Change	15.77%
1 Year Change	16.55%
3 Year Change	-11.16%
5 Year Change	-16.47%
Change since IPO	454.96%

Recent News & Updates

Apr 16

Rathbones Group (LON:RAT) Is Increasing Its Dividend To UK£0.54

Rathbones Group Plc's ( LON:RAT ) dividend will be increasing to UK£0.54 on 10th of May. This will take the dividend...

Apr 02

Rathbones Group (LON:RAT) Is Paying Out A Larger Dividend Than Last Year

Rathbones Group Plc ( LON:RAT ) will increase its dividend on the 10th of May to UK£0.54. This will take the dividend...

Shareholder Returns

	RAT	GB Capital Markets	GB Market
7D	3.5%	3.0%	3.6%
1Y	16.6%	-8.8%	-2.5%

Return vs Industry: RAT exceeded the UK Capital Markets industry which returned -10.1% over the past year.

Return vs Market: RAT exceeded the UK Market which returned -3.2% over the past year.

Price Volatility

Is RAT's price volatile compared to industry and market?
RAT volatility
RAT Average Weekly Movement	6.1%
Capital Markets Industry Average Movement	4.9%
Market Average Movement	6.1%
10% most volatile stocks in GB Market	11.8%
10% least volatile stocks in GB Market	3.2%

Stable Share Price: RAT is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: RAT's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1742	1,967	Paul Stockton	https://www.rathbones.com

Rathbones Group Plc, through its subsidiaries, provides individual investment and wealth management services for private clients, charities, trustees, and professional partners in the United Kingdom and Jersey. The company operates in two segments, Investment Management and Funds. Its services include discretionary investment management, unit trust management, financial planning and advisory, managed portfolio, and banking and loan services, as well as trust, tax, and legal advisory services.

Rathbones Group Fundamentals Summary

How do Rathbones Group's earnings and revenue compare to its market cap?
RAT fundamental statistics
Market Cap	UK£1.21b
Earnings (TTM)	UK£75.23m
Revenue (TTM)	UK£465.40m

16.1x

P/E Ratio

2.6x

P/S Ratio

Is RAT overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
RAT income statement (TTM)
Revenue	UK£465.40m
Cost of Revenue	UK£29.06m
Gross Profit	UK£436.33m
Other Expenses	UK£361.10m
Earnings	UK£75.23m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

Jul 28, 2022

Earnings per share (EPS)	1.28
Gross Margin	93.76%
Net Profit Margin	16.16%
Debt/Equity Ratio	6.8%

How did RAT perform over the long term?

See historical performance and comparison

Dividends

3.9%

Current Dividend Yield

61%

Payout Ratio

Valuation

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

Valuation Score

2/6

Valuation Score 2/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

42.8%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: RAT (£20.7) is trading below our estimate of fair value (£36.21)

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

Price To Earnings Ratio

PE vs Industry: RAT is poor value based on its PE Ratio (16.1x) compared to the UK Capital Markets industry average (9.5x).

PE vs Market: RAT is poor value based on its PE Ratio (16.1x) compared to the UK market (15.3x).

Price to Earnings Growth Ratio

PEG Ratio: RAT is poor value based on its PEG Ratio (2.6x)

Price to Book Ratio

PB vs Industry: RAT is overvalued based on its PB Ratio (1.9x) compared to the GB Capital Markets industry average (1.1x).

Future Growth

How is Rathbones Group forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

6.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: RAT's forecast earnings growth (6.1% per year) is above the savings rate (0.9%).

Earnings vs Market: RAT's earnings (6.1% per year) are forecast to grow slower than the UK market (11.1% per year).

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

Revenue vs Market: RAT's revenue (5.5% per year) is forecast to grow faster than the UK market (4% per year).

High Growth Revenue: RAT's revenue (5.5% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: RAT's Return on Equity is forecast to be low in 3 years time (13.8%).

Past Performance

How has Rathbones Group performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

0.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: RAT has a high level of non-cash earnings.

Growing Profit Margin: RAT's current net profit margins (16.2%) are higher than last year (6.8%).

Past Earnings Growth Analysis

Earnings Trend: RAT's earnings have grown by 0.6% per year over the past 5 years.

Accelerating Growth: RAT's earnings growth over the past year (182.3%) exceeds its 5-year average (0.6% per year).

Earnings vs Industry: RAT earnings growth over the past year (182.3%) exceeded the Capital Markets industry 62.1%.

Return on Equity

High ROE: RAT's Return on Equity (12.1%) is considered low.

Financial Health

How is Rathbones Group's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: RAT's short term assets (£2.8B) exceed its short term liabilities (£2.5B).

Long Term Liabilities: RAT's short term assets (£2.8B) exceed its long term liabilities (£137.0M).

Debt to Equity History and Analysis

Debt Level: RAT's net debt to equity ratio (0.3%) is considered satisfactory.

Reducing Debt: RAT's debt to equity ratio has increased from 6.1% to 6.8% over the past 5 years.

Debt Coverage: RAT's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: RAT's interest payments on its debt are well covered by EBIT (585.8x coverage).

Balance Sheet

Dividend

What is Rathbones Group current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

3.91%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: RAT's dividend (3.91%) is higher than the bottom 25% of dividend payers in the UK market (1.8%).

High Dividend: RAT's dividend (3.91%) is low compared to the top 25% of dividend payers in the UK market (4.84%).

Stability and Growth of Payments

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

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

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (60.7%), RAT's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: RAT is paying a dividend but the company has no free cash flows.

Next Steps

Explore strong dividend paying companies in the Diversified Financials industry.

Management

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

3.3yrs

Average board tenure

CEO

Paul Stockton (55 yo)

3yrs

Tenure

UK£1,155,000

Compensation

Mr. Paul Robert Stockton serves as Chief Executive Officer and Executive Director of Rathbone Investment Management Limited. Mr. Stockton has been Executive Director of Rathbone Brothers plc since Septembe...

CEO Compensation Analysis

Compensation vs Market: Paul's total compensation ($USD1.44M) is about average for companies of similar size in the UK market ($USD1.85M).

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

Board Members

Experienced Board: RAT's board of directors are considered experienced (3.3 years average tenure).

Ownership

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

Insider Trading Volume

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

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 7.3%.

Data	Last Updated (UTC time)
Company Analysis	2022/05/17 00:00
End of Day Share Price	2022/05/17 00:00
Earnings	2021/12/31
Annual Earnings	2021/12/31