LSE:SN.

Stock Analysis Report

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Executive Summary

Smith & Nephew plc develops, manufactures, and sells medical devices worldwide. More Details


Snowflake Analysis

Established dividend payer with adequate balance sheet.


Similar Companies

Share Price & News

How has Smith & Nephew's share price performed over time and what events caused price changes?


Latest Share Price and Events

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

Volatility Over Time: SN.'s weekly volatility (5%) has been stable over the past year.


Market Performance


7 Day Return

5.9%

SN.

4.2%

GB Medical Equipment

-0.2%

GB Market


1 Year Return

-10.4%

SN.

-4.6%

GB Medical Equipment

-6.8%

GB Market

Return vs Industry: SN. underperformed the UK Medical Equipment industry which returned -8.7% over the past year.

Return vs Market: SN. matched the UK Market which returned -10.7% over the past year.


Shareholder returns

SN.IndustryMarket
7 Day5.9%4.2%-0.2%
30 Day12.8%12.3%14.7%
90 Day-3.4%0.02%7.6%
1 Year-8.5%-10.4%-2.6%-4.6%-3.1%-6.8%
3 Year20.9%14.0%17.9%11.1%2.6%-9.9%
5 Year50.2%36.4%44.4%32.7%31.1%1.5%

Long-Term Price Volatility Vs. Market

How volatile is Smith & Nephew's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Smith & Nephew undervalued compared to its fair value and its price relative to the market?

3.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SN. (£15.08) is trading below our estimate of fair value (£15.57)

Significantly Below Fair Value: SN. is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: SN. is poor value based on its PE Ratio (44.8x) compared to the GB Medical Equipment industry average (42.5x).

PE vs Market: SN. is poor value based on its PE Ratio (44.8x) compared to the UK market (21.1x).


Price to Earnings Growth Ratio

PEG Ratio: SN. is poor value based on its PEG Ratio (1.9x)


Price to Book Ratio

PB vs Industry: SN.'s PB Ratio (3.5x) is in line with the GB Medical Equipment industry average.


Next Steps

Future Growth

How is Smith & Nephew forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

24.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SN.'s forecast earnings growth (24.2% per year) is above the savings rate (1.2%).

Earnings vs Market: SN.'s earnings (24.2% per year) are forecast to grow slower than the UK market (27.1% per year).

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

Revenue vs Market: SN.'s revenue (6.6% per year) is forecast to grow slower than the UK market (6.8% per year).

High Growth Revenue: SN.'s revenue (6.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SN.'s Return on Equity is forecast to be low in 3 years time (15.1%).


Next Steps

Past Performance

How has Smith & Nephew performed over the past 5 years?

2.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SN. has a large one-off loss of $142.0M impacting its June 27 2020 financial results.

Growing Profit Margin: SN.'s current net profit margins (8.3%) are lower than last year (14.1%).


Past Earnings Growth Analysis

Earnings Trend: SN.'s earnings have grown by 2.4% per year over the past 5 years.

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

Earnings vs Industry: SN. had negative earnings growth (-44%) over the past year, making it difficult to compare to the Medical Equipment industry average (-36.8%).


Return on Equity

High ROE: SN.'s Return on Equity (7.9%) is considered low.


Next Steps

Financial Health

How is Smith & Nephew's financial position?


Financial Position Analysis

Short Term Liabilities: SN.'s short term assets ($3.3B) exceed its short term liabilities ($1.5B).

Long Term Liabilities: SN.'s short term assets ($3.3B) exceed its long term liabilities ($3.1B).


Debt to Equity History and Analysis

Debt Level: SN.'s debt to equity ratio (49.2%) is considered high.

Reducing Debt: SN.'s debt to equity ratio has increased from 39.2% to 49.2% over the past 5 years.

Debt Coverage: SN.'s debt is well covered by operating cash flow (32.4%).

Interest Coverage: SN.'s interest payments on its debt are well covered by EBIT (10.4x coverage).


Balance Sheet


Next Steps

Dividend

What is Smith & Nephew current dividend yield, its reliability and sustainability?

1.86%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: SN.'s dividend (1.86%) is higher than the bottom 25% of dividend payers in the UK market (1.69%).

High Dividend: SN.'s dividend (1.86%) is low compared to the top 25% of dividend payers in the UK market (4.96%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (83.5%), SN.'s payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SN.'s dividends in 3 years are forecast to be well covered by earnings (35.4% payout ratio).


Next Steps

Management

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

3.2yrs

Average management tenure


CEO

Roland Diggelmann (53 yo)

1

Tenure

US$1,485,559

Compensation

Mr. Roland Diggelmann has been Chief Executive Officer of Smith & Nephew plc since November 1, 2019. Mr. Diggelmann was the Chief Executive Officer of Roche Diagnostics at Roche Holding AG until September ...


CEO Compensation Analysis

Compensation vs Market: Roland's total compensation ($USD1.49M) is below average for companies of similar size in the UK market ($USD4.56M).

Compensation vs Earnings: Roland's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Roland Diggelmann
Chief Executive Officer1yrUS$1.49m0.0021%
$ 263.8k
Anne-Francoise Nesmes
CFO & Executive Director0.33yrno datano data
Mark Gladwell
President of Global Operations and Global Business Services2.83yrsno data0.00018%
$ 22.8k
Andrew Swift
Vice President of Investor Relationsno datano datano data
Catheryn O'Rourke
Chief Legal & Compliance Officer3.5yrsno data0.0071%
$ 899.1k
Joe Metzger
Senior Vice President of Marketing Services & Communications9.83yrsno datano data
Elga Lohler
Chief Human Resources Officer4.92yrsno data0.010%
$ 1.3m
Philip Cowdy
Chief Business Development & Corporate Affairs Officer6.83yrsno data0.0040%
$ 507.3k
Bradley Cannon
President of Sports Medicine & ENT2.83yrsno data0.0074%
$ 937.2k
Vasant Padmanabhan
President of Research & Development4.25yrsno data0.0052%
$ 656.9k
Steve Kane
Head of Human Resources for the USno datano datano data
Melissa Guerdan
Chief Quality & Regulatory Affairs Officer2.33yrsno data0.00015%
$ 19.0k

3.2yrs

Average Tenure

52yo

Average Age

Experienced Management: SN.'s management team is considered experienced (3.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Anne-Francoise Nesmes
CFO & Executive Director0.33yrno datano data
Roberto Quarta
Chairman6.58yrsUS$420.24k0.010%
$ 1.3m
Erik Engstrom
Independent Non-Executive Director5.83yrsUS$73.00k0.0019%
$ 234.6k
Virginia Hilda Brunette Bottomley
Independent Non-Executive Director8.58yrsUS$73.00k0.0022%
$ 284.1k
Marc Owen
Independent Non-Executive Director3.08yrsUS$196.82k0.00089%
$ 112.9k
Angie Risley
Independent Non-Executive Director3.17yrsUS$89.50k0.00055%
$ 69.7k
C. Richard Medlock
Non-Executive Director0.58yrno data0.000030%
$ 3.8k
Vinita Bali
Independent Non-Executive Director5.92yrsUS$178.78k0.00088%
$ 111.6k
Robin Freestone
Senior Independent Non-Executive Director1.58yrsUS$93.00k0.0019%
$ 234.6k
Katarzyna Mazur-Hofsaess
Non-Executive Directorno datano datano data
Robert White
Independent Non-Executive Director0.50yrno data0.00072%
$ 91.3k

3.1yrs

Average Tenure

61yo

Average Age

Experienced Board: SN.'s board of directors are considered experienced (3.1 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: SN. 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

Smith & Nephew plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Smith & Nephew plc
  • Ticker: SN.
  • Exchange: LSE
  • Founded: 1856
  • Industry: Health Care Equipment
  • Sector: Healthcare
  • Market Cap: UK£12.682b
  • Shares outstanding: 874.00m
  • Website: https://www.smith-nephew.com

Number of Employees


Location

  • Smith & Nephew plc
  • Building 5
  • Croxley Park
  • Watford
  • Hertfordshire
  • WD18 8YE
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SNNU.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1980
NPW1DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1980
SN.LSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1980
SNLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1980
SNNNYSE (New York Stock Exchange)ADR EACH REPR 5 USD0.20USUSDNov 1999
NPWADB (Deutsche Boerse AG)ADR EACH REPR 5 USD0.20DEEURNov 1999

Biography

Smith & Nephew plc develops, manufactures, and sells medical devices worldwide. The company offers knee implant products for specialized knee replacement procedures; hip implants for the reconstruction of ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/12/01 19:15
End of Day Share Price2020/12/01 00:00
Earnings2020/06/27
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.