LSE:CTEC

Stock Analysis Report

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Executive Summary

ConvaTec Group Plc develops, manufactures, and markets medical products and technologies worldwide. More Details


Snowflake Analysis

Adequate balance sheet with moderate growth potential.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: CTEC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

5.0%

CTEC

-2.9%

GB Medical Equipment

-2.0%

GB Market


1 Year Return

-5.8%

CTEC

-9.4%

GB Medical Equipment

-17.2%

GB Market

Return vs Industry: CTEC exceeded the UK Medical Equipment industry which returned -8.9% over the past year.

Return vs Market: CTEC exceeded the UK Market which returned -16.4% over the past year.


Shareholder returns

CTECIndustryMarket
7 Day5.0%-2.9%-2.0%
30 Day6.4%0.09%-0.5%
90 Day-7.1%-9.5%-4.4%
1 Year-3.5%-5.8%-7.6%-9.4%-14.1%-17.2%
3 Year7.5%-0.4%6.9%0.8%-10.3%-21.4%
5 Yearn/a35.7%24.8%13.4%-12.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

201.19x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: CTEC (£1.85) is trading above our estimate of fair value (£1.75)

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


Price To Earnings Ratio

PE vs Industry: CTEC is poor value based on its PE Ratio (196.1x) compared to the GB Medical Equipment industry average (35x).

PE vs Market: CTEC is poor value based on its PE Ratio (196.1x) compared to the UK market (18x).


Price to Earnings Growth Ratio

PEG Ratio: CTEC is poor value based on its PEG Ratio (5.6x)


Price to Book Ratio

PB vs Industry: CTEC is overvalued based on its PB Ratio (3.1x) compared to the GB Medical Equipment industry average (3x).


Next Steps

Future Growth

How is Convatec Group forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

33.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CTEC's forecast earnings growth (35.3% per year) is above the savings rate (1.2%).

Earnings vs Market: CTEC's earnings (35.3% per year) are forecast to grow faster than the UK market (24.1% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: CTEC's revenue (3.4% per year) is forecast to grow slower than the UK market (6% per year).

High Growth Revenue: CTEC's revenue (3.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CTEC's Return on Equity is forecast to be low in 3 years time (17%).


Next Steps

Past Performance

How has Convatec Group performed over the past 5 years?

54.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CTEC has a large one-off loss of $133.7M impacting its June 30 2020 financial results.

Growing Profit Margin: CTEC's current net profit margins (1.3%) are lower than last year (8.9%).


Past Earnings Growth Analysis

Earnings Trend: CTEC has become profitable over the past 5 years, growing earnings by 54.9% per year.

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

Earnings vs Industry: CTEC had negative earnings growth (-84.8%) over the past year, making it difficult to compare to the Medical Equipment industry average (-14.4%).


Return on Equity

High ROE: CTEC's Return on Equity (1.6%) is considered low.


Next Steps

Financial Health

How is Convatec Group's financial position?


Financial Position Analysis

Short Term Liabilities: CTEC's short term assets ($1.0B) exceed its short term liabilities ($386.3M).

Long Term Liabilities: CTEC's short term assets ($1.0B) do not cover its long term liabilities ($1.7B).


Debt to Equity History and Analysis

Debt Level: CTEC's debt to equity ratio (97.7%) is considered high.

Reducing Debt: CTEC had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: CTEC's debt is well covered by operating cash flow (24.4%).

Interest Coverage: CTEC's interest payments on its debt are well covered by EBIT (4.8x coverage).


Balance Sheet


Next Steps

Dividend

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

2.30%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: CTEC's dividend (2.36%) is higher than the bottom 25% of dividend payers in the UK market (1.84%).

High Dividend: CTEC's dividend (2.36%) is low compared to the top 25% of dividend payers in the UK market (5.29%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, CTEC has been paying a dividend for less than 10 years.

Growing Dividend: CTEC's dividend payments have increased, but the company has only paid a dividend for 3 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (462.5%), CTEC's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CTEC's dividends in 3 years are forecast to be well covered by earnings (45.1% payout ratio).


Next Steps

Management

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

0.9yrs

Average management tenure


CEO

Karim Bitar (55 yo)

1.08yrs

Tenure

US$6,878,000

Compensation

Mr. Karim Bitar serves as Chief Executive Officer and Director at Convatec Group Plc since September 30, 2019. Mr. Bitar served as the Chief Executive Officer of Genus plc from September 30, 2011 to Septem ...


CEO Compensation Analysis

Compensation vs Market: Karim's total compensation ($USD11.91M) is above average for companies of similar size in the UK market ($USD2.98M).

Compensation vs Earnings: Insufficient data to compare Karim's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
Karim Bitar
CEO & Director1.08yrsUS$6.88m0.080%
$ 3.1m
Frank Schulkes
CFO & Director2.92yrsUS$979.00k0.0083%
$ 315.2k
Donal Balfe
Executive Vice President of Quality & Operations0.67yrno datano data
Divakar Ramakrishnan
Chief Technology Officer0.75yrno datano data
Mark Reynolds
Director of Investor Relationsno datano datano data
Adam Deutsch
Chief Transformation Officer & General Counsel6.17yrsno datano data
Natalia Kozmina
Executive VP & Chief Human Resources Officer0.33yrno datano data
John Lindskog
President & COO of Global Infusion Care0.67yrno datano data
Christian Hoengaard
Senior VP & GM - USAno datano datano data
Kjersti Grimsrud
President & COO of Global Continence Care2.75yrsno datano data
Supratim Bose
President & COO of Global Emerging Markets1.83yrsno datano data
David Shepherd
President & COO of Global Advanced Wound Care0.67yrno datano data

0.9yrs

Average Tenure

59yo

Average Age

Experienced Management: CTEC's management team is not considered experienced ( 0.9 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Karim Bitar
CEO & Director1.08yrsUS$6.88m0.080%
$ 3.1m
Frank Schulkes
CFO & Director2.92yrsUS$979.00k0.0083%
$ 315.2k
John David McAdam
Independent Chairman1.08yrsUS$81.00k0.0012%
$ 44.2k
Heather Mason
Non-Executive Director0.25yrno data0.00050%
$ 19.1k
Regina Benjamin
Independent Non-Executive Director3.17yrsUS$94.00k0.00050%
$ 19.1k
Margaret Ewing
Senior Independent Director1.58yrsUS$123.00k0.00050%
$ 19.1k
Sten Scheibye
Non-Executive Director2.25yrsUS$60.00k0.0013%
$ 47.6k
Brian May
Non-Executive Director0.58yrno data0.0013%
$ 47.6k
Rick Anderson
Non-Executive Director4yrsUS$1.14m0.010%
$ 398.3k
Constantin Coussios
Non-Executive Director0.083yrno datano data

1.3yrs

Average Tenure

59yo

Average Age

Experienced Board: CTEC's board of directors are not considered experienced ( 1.3 years average tenure), which suggests a new board.


Ownership

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


Insider Trading Volume

Insider Buying: CTEC insiders have only sold shares 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

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


Key Information

  • Name: Convatec Group Plc
  • Ticker: CTEC
  • Exchange: LSE
  • Founded: 2016
  • Industry: Health Care Supplies
  • Sector: Healthcare
  • Market Cap: UK£3.812b
  • Shares outstanding: 2.00b
  • Website: https://www.convatecgroup.com

Number of Employees


Location

  • Convatec Group Plc
  • 3 Forbury Place
  • 23 Forbury Road
  • Reading
  • Berkshire
  • RG1 3JH
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CTECLSE (London Stock Exchange)YesCommon StockGBGBPOct 2016
CTECLBATS-CHIXE (BATS 'Chi-X Europe')YesCommon StockGBGBPOct 2016
CNVV.FOTCPK (Pink Sheets LLC)YesCommon StockUSUSDOct 2016
2CVDB (Deutsche Boerse AG)YesCommon StockDEEUROct 2016
CNVV.YOTCPK (Pink Sheets LLC)UNSP ADR EACH REP 4 ORD SHSUSUSDJan 2017
2CVUDB (Deutsche Boerse AG)UNSP ADR EACH REP 4 ORD SHSDEEURJan 2017

Biography

ConvaTec Group Plc develops, manufactures, and markets medical products and technologies worldwide. It offers advanced wound dressings and skin care products for the management of chronic wounds resulting ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/28 21:17
End of Day Share Price2020/10/28 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


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.