LSE:NMC

Stock Analysis Report

Executive Summary

NMC Health Plc provides healthcare services in the United Arab Emirates, the United Kingdom, Spain, and internationally.

Rewards

Trading at 46.6% below its fair value

Earnings are forecast to grow 17.74% per year

Earnings grew by 25.9% over the past year

Risk Analysis

Interest payments are not well covered by earnings

Highly volatile share price over past 3 months



Snowflake Analysis

Undervalued with reasonable growth potential.


Similar Companies

Share Price & News

How has NMC Health's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

15.4%

NMC

6.5%

GB Healthcare

1.4%

GB Market


1 Year Return

-43.5%

NMC

-4.6%

GB Healthcare

12.4%

GB Market

Return vs Industry: NMC underperformed the UK Healthcare industry which returned -6.6% over the past year.

Return vs Market: NMC underperformed the UK Market which returned 12.7% over the past year.


Shareholder returns

NMCIndustryMarket
7 Day15.4%6.5%1.4%
30 Day19.8%7.0%1.8%
90 Day-40.2%-11.4%8.8%
1 Year-43.1%-43.5%-3.1%-4.6%18.3%12.4%
3 Year-4.0%-5.6%-19.9%-23.4%23.8%8.0%
5 Year224.1%214.8%59.8%50.9%41.8%8.9%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is NMC Health undervalued compared to its fair value and its price relative to the market?

40.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NMC (£13.85) is trading below our estimate of fair value (£25.92)

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


Price To Earnings Ratio

PE vs Industry: NMC is good value based on its PE Ratio (13.9x) compared to the Healthcare industry average (24.1x).

PE vs Market: NMC is good value based on its PE Ratio (13.9x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: NMC is good value based on its PEG Ratio (0.8x)


Price to Book Ratio

PB vs Industry: NMC is overvalued based on its PB Ratio (2.7x) compared to the GB Healthcare industry average (1.5x).


Next Steps

Future Growth

How is NMC Health forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

18.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NMC's forecast earnings growth (17.7% per year) is above the savings rate (0.5%).

Earnings vs Market: NMC's earnings (17.7% per year) are forecast to grow faster than the UK market (11.7% per year).

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

Revenue vs Market: NMC's revenue (10.1% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: NMC's revenue (10.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NMC's Return on Equity is forecast to be high in 3 years time (25.2%)


Next Steps

Past Performance

How has NMC Health performed over the past 5 years?

29.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NMC has high quality earnings.

Growing Profit Margin: NMC's current net profit margins (11.4%) are lower than last year (12.2%).


Past Earnings Growth Analysis

Earnings Trend: NMC's earnings have grown significantly by 29.3% per year over the past 5 years.

Accelerating Growth: NMC's earnings growth over the past year (25.9%) is below its 5-year average (29.3% per year).

Earnings vs Industry: NMC earnings growth over the past year (25.9%) exceeded the Healthcare industry 19.8%.


Return on Equity

High ROE: NMC's Return on Equity (16.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is NMC Health's financial position?


Financial Position Analysis

Short Term Liabilities: NMC's short term assets ($1.5B) exceed its short term liabilities ($887.7M).

Long Term Liabilities: NMC's short term assets ($1.5B) do not cover its long term liabilities ($2.4B).


Debt to Equity History and Analysis

Debt Level: NMC's debt to equity ratio (124.1%) is considered high.

Reducing Debt: NMC's debt to equity ratio has increased from 78.6% to 124.1% over the past 5 years.

Debt Coverage: NMC's debt is well covered by operating cash flow (27.6%).

Interest Coverage: NMC's interest payments on its debt are not well covered by EBIT (2.9x coverage).


Balance Sheet

Inventory Level: NMC has a high level of physical assets or inventory.

Debt Coverage by Assets: NMC's debt is not covered by short term assets (assets are 0.7x debt).


Next Steps

Dividend

What is NMC Health's current dividend yield, its reliability and sustainability?

1.08%

Current Dividend Yield


Dividend Yield vs Market

company1.1%marketbottom25%1.8%markettop25%5.0%industryaverage1.7%forecastin3Years2.1%

Current dividend yield vs market & industry

Notable Dividend: NMC's dividend (1.21%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: NMC's dividend (1.21%) is low compared to the top 25% of dividend payers in the UK market (4.95%).


Stability and Growth of Payments

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

Growing Dividend: NMC's dividend payments have increased, but the company has only paid a dividend for 7 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (17.8%), NMC's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NMC's dividends in 3 years are forecast to be well covered by earnings (18.4% payout ratio).


Next Steps

Management

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

2.4yrs

Average management tenure


CEO

Prasanth Manghat (44yo)

2.8yrs

Tenure

US$5,483,500

Compensation

Mr. Prasanth Manghat has been the Chief Executive Officer of NMC Health Plc since March 8, 2017. Mr. Manghat served as Deputy Chief Executive Officer of NMC Health Plc since January 1, 2015 until March 8,  ...


CEO Compensation Analysis

Compensation vs Market: Prasanth's total compensation ($USD5.48M) is above average for companies of similar size in the UK market ($USD2.25M).

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


Management Age and Tenure

2.4yrs

Average Tenure

44yo

Average Age

Experienced Management: NMC's management team is considered experienced (2.4 years average tenure).


Board Age and Tenure

5.6yrs

Average Tenure

58yo

Average Age

Experienced Board: NMC's board of directors are considered experienced (5.6 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyUK£50,17716 Jan 20
Patrick Meade
EntityIndividual
Role
Member of the Board of Directors
Independent Non Executive Director
Shares3,640
Max PriceUK£13.78
BuyUK£49,87724 Dec 19
Patrick Meade
EntityIndividual
Role
Member of the Board of Directors
Independent Non Executive Director
Shares2,900
Max PriceUK£17.20
BuyUK£24,65620 Dec 19
Patrick Meade
EntityIndividual
Role
Member of the Board of Directors
Independent Non Executive Director
Shares1,700
Max PriceUK£14.50

Ownership Breakdown

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


Management Team

  • Simon Watkins (54yo)

    Group Company Secretary

    • Asjad Yahya

      Investor Relations Officer

      • Chandrakumari Shetty (75yo)

        Group Medical Director

        • Compensation: US$230.13k
      • Nirman Shetty (37yo)

        Chief Operating Officer of Distribution

        • Tenure: 2.3yrs
        • Compensation: US$100.87k
      • Prasanth Manghat (44yo)

        CEO & Executive Director

        • Tenure: 2.8yrs
        • Compensation: US$5.48m
      • Khaleefa Butti Omair Yousif Al Muhairi (40yo)

        Executive Vice Chairman

        • Compensation: US$1.89m
      • Hani Buttikhi

        Chief Investment Officer & Executive Director

        • Tenure: 2.5yrs
        • Compensation: US$1.63m
      • Prashanth Shenoy

        Chief Financial Officer

        • Tenure: 2.4yrs
      • Michael Davis

        Chief Operations Officer of Healthcare

        • Tenure: 2.4yrs
      • Vishal Sharma

        Head of Technology Investments & Digital Strategy


        Board Members

        • Henry J. Tompkins (78yo)

          Joint Non-Executive Chairman

          • Tenure: 2.3yrs
        • Salma Ali Saif Bin Hareb Almheiri (53yo)

          Independent Non-Executive Director

          • Tenure: 5.6yrs
        • Bavaguthu Shetty (76yo)

          Joint Non-Executive Chairman

          • Tenure: 2.8yrs
        • Abdulrahman Saddiq Basaddiq (70yo)

          Non-Executive Director

          • Tenure: 5.9yrs
        • Prasanth Manghat (44yo)

          CEO & Executive Director

          • Tenure: 2.8yrs
          • Compensation: US$5.48m
        • Khaleefa Butti Omair Yousif Al Muhairi (40yo)

          Executive Vice Chairman

          • Compensation: US$1.89m
        • Clanwilliam Meade (58yo)

          Independent Non Executive Director

          • Tenure: 7.8yrs
        • Jonathan Bomford (70yo)

          Senior Independent Non-Executive Director

          • Ayesha Abdullah (52yo)

            Independent Non-Executive Director

            • Tenure: 5.6yrs
          • Hani Buttikhi

            Chief Investment Officer & Executive Director

            • Tenure: 2.5yrs
            • Compensation: US$1.63m

          Company Information

          NMC Health Plc's company bio, employee growth, exchange listings and data sources


          Key Information

          • Name: NMC Health Plc
          • Ticker: NMC
          • Exchange: LSE
          • Founded: 1975
          • Industry: Health Care Facilities
          • Sector: Healthcare
          • Market Cap: UK£3.251b
          • Shares outstanding: 208.70m
          • Website: https://nmc.ae

          Number of Employees


          Location

          • NMC Health Plc
          • Devonshire House
          • Level 1
          • London
          • Greater London
          • W1J 8AJ
          • United Kingdom

          Listings

          TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
          NMCLSE (London Stock Exchange)YesOrdinary SharesGBGBPApr 2012
          NMCLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPApr 2012
          NMMC.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDApr 2012
          NMHL.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDJul 2015

          Biography

          NMC Health Plc provides healthcare services in the United Arab Emirates, the United Kingdom, Spain, and internationally. The company operates through two segments, Healthcare, and Distribution & Services. It owns and manages approximately 200 healthcare facilities, including hospitals, medical centers, long term care facilities, day surgery centers, fertility clinics, and home health services providers. The company offers medical services comprising diagnostic, and in and outpatient services, as well as research and medical services in the field of gynecology, obstetrics, and human reproduction; and management services in respect of hospitals, as well as retails pharmaceutical goods. It also trades in pharmaceutical goods, medical equipment, cosmetics, and food products. NMC Health Plc was founded in 1975 and is based in London, the United Kingdom. 


          Company Analysis and Financial Data Status

          All financial data provided by Standard & Poor's Capital IQ.
          DataLast Updated (UTC time)
          Company Analysis2020/01/19 21:29
          End of Day Share Price2020/01/17 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.