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

Q: What is the Fair Price of RAT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

RAT (£19.92) is trading above our estimate of [[fair value]] (£15.64)

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

Earnings are forecast to grow 5.97% per year

Earnings grew by 182.3% over the past year

Risk Analysis

High level of non-cash earnings

Dividend of 4.07% 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

Brewin Dolphin Holdings

LSE:BRW

UK£1.5b

BBGI Global Infrastructure

LSE:BBGI

UK£1.2b

Jupiter Fund Management

LSE:JUP

UK£831.8m

BioPharma Credit

LSE:BPCR

US$1.3b

Price History & Performance

Summary of all time highs, changes and price drops for Rathbones Group
Historical stock prices
Current Share Price	UK£19.92
52 Week High	UK£22.30
52 Week Low	UK£14.26
Beta	0.60
1 Month Change	-1.39%
3 Month Change	12.93%
1 Year Change	7.33%
3 Year Change	-9.04%
5 Year Change	-21.14%
Change since IPO	434.05%

Recent News & Updates

Jun 02

If You Like EPS Growth Then Check Out Rathbones Group (LON:RAT) Before It's Too Late

Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story...

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...

Shareholder Returns

	RAT	GB Capital Markets	GB Market
7D	0.5%	4.4%	2.2%
1Y	7.3%	-15.9%	-6.8%

Return vs Industry: RAT exceeded the UK Capital Markets industry which returned -15.9% over the past year.

Return vs Market: RAT exceeded the UK Market which returned -7.3% over the past year.

Price Volatility

Is RAT's price volatile compared to industry and market?
RAT volatility
RAT Average Weekly Movement	4.8%
Capital Markets Industry Average Movement	4.2%
Market Average Movement	5.5%
10% most volatile stocks in GB Market	10.7%
10% least volatile stocks in GB Market	2.8%

Stable Share Price: RAT is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: RAT's weekly volatility (5%) 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£1.18b
Earnings (TTM)	UK£75.23m
Revenue (TTM)	UK£465.40m

15.7x

P/E Ratio

2.5x

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)	1.27
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

4.1%

Current Dividend Yield

61%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is RAT undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for RAT?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for RAT. This is calculated by dividing RAT's market cap by their current preferred multiple.
What is RAT's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	UK£1.18b

RAT key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	2.7x
Enterprise Value/EBITDA	9.6x
PEG Ratio	2.6x

Price to Earnings Ratio vs Peers

How does RAT's PE Ratio compare to its peers?

RAT PE Ratio vs Peers

The above table shows the PE ratio for RAT vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	17.4x
BRW Brewin Dolphin Holdings	28.5x	7.5%	UK£1.5b
BBGI BBGI Global Infrastructure	20.1x	n/a	UK£1.2b
JUP Jupiter Fund Management	5.6x	-21.4%	UK£831.8m
BPCR BioPharma Credit	15.3x	n/a	US$1.3b
RAT Rathbones Group	15.7x	6.0%	UK£1.2b

Forward PE

Price-To-Earnings vs Peers: RAT is good value based on its Price-To-Earnings Ratio (15.7x) compared to the peer average (17.4x).

Price to Earnings Ratio vs Industry

How does RAT's PE Ratio compare vs other companies in the GB Capital Markets Industry?

Price-To-Earnings vs Industry: RAT is expensive based on its Price-To-Earnings Ratio (15.7x) compared to the UK Capital Markets industry average (9.8x)

Price to Earnings Ratio vs Fair Ratio

What is RAT's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

RAT PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	15.7x
Fair PE Ratio	17.5x

Price-To-Earnings vs Fair Ratio: RAT is good value based on its Price-To-Earnings Ratio (15.7x) compared to the estimated Fair Price-To-Earnings Ratio (17.5x).

Share Price vs Fair Value

What is the Fair Price of RAT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: RAT (£19.92) is trading above our estimate of fair value (£15.64)

Significantly Below Fair Value: RAT is trading above our estimate of fair value.

Price to Earnings Growth Ratio

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

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Future Growth

How is Rathbones Group forecast to perform in the next 1 to 3 years based on estimates from 8 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

6.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: RAT's forecast earnings growth (6% per year) is above the savings rate (0.9%).

Earnings vs Market: RAT's earnings (6% per year) are forecast to grow slower than the UK market (11% per year).

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

Revenue vs Market: RAT's revenue (6% per year) is forecast to grow faster than the UK market (4.1% per year).

High Growth Revenue: RAT's revenue (6% 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 (13.6%).

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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 47.5%.

Return on Equity

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

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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

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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

4.07%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: RAT's dividend (4.07%) is higher than the bottom 25% of dividend payers in the UK market (1.87%).

High Dividend: RAT's dividend (4.07%) is low compared to the top 25% of dividend payers in the UK market (5.16%).

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.

Discover strong dividend paying companies

Management

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

3.4yrs

Average board tenure

CEO

Paul Stockton (55 yo)

3.08yrs

Tenure

UK£1,155,000

Compensation

Mr. Paul Robert Stockton serves as Chief Executive Officer and Executive Director of Rathbone Investment Management Limited. He is Group Chief Executive Officer of Rathbones Group Plc since May 2022 and se...

CEO Compensation Analysis

Compensation vs Market: Paul's total compensation ($USD1.41M) is below average for companies of similar size in the UK market ($USD2.07M).

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 (3.4 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 3.1%.

Data	Last Updated (UTC time)
Company Analysis	2022/06/28 00:00
End of Day Share Price	2022/06/28 00:00
Earnings	2021/12/31
Annual Earnings	2021/12/31