LSE:SN.

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Excellent balance sheet average dividend payer.


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. has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.8%

SN.

-0.02%

GB Medical Equipment

-0.4%

GB Market


1 Year Return

18.5%

SN.

16.8%

GB Medical Equipment

4.0%

GB Market

Return vs Industry: SN. matched the UK Medical Equipment industry which returned 16.8% over the past year.

Return vs Market: SN. exceeded the UK Market which returned 4% over the past year.


Shareholder returns

SN.IndustryMarket
7 Day-0.8%-0.02%-0.4%
30 Day-0.9%0.8%1.5%
90 Day-14.4%-9.3%3.7%
1 Year20.6%18.5%19.0%16.8%9.4%4.0%
3 Year60.0%51.3%33.3%26.3%21.4%6.0%
5 Year63.7%49.2%61.7%48.0%33.0%2.8%

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?

26.73x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SN. (£16.52) is trading above our estimate of fair value (£15.04)

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


Price To Earnings Ratio

PE vs Industry: SN. is good value based on its PE Ratio (26.7x) compared to the Medical Equipment industry average (29.3x).

PE vs Market: SN. is poor value based on its PE Ratio (26.7x) compared to the UK market (17x).


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. is overvalued based on its PB Ratio (3.8x) compared to the GB Medical Equipment industry average (3x).


Next Steps

Future Growth

How is Smith & Nephew forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

13.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SN.'s forecast earnings growth (13.7% per year) is above the savings rate (1.2%).

Earnings vs Market: SN.'s earnings (13.7% per year) are forecast to grow faster than the UK market (12.5% per year).

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

Revenue vs Market: SN.'s revenue (4.8% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: SN.'s revenue (4.8% 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 (16.6%).


Next Steps

Past Performance

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

10.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SN. has high quality earnings.

Growing Profit Margin: SN.'s current net profit margins (14.1%) are lower than last year (14.7%).


Past Earnings Growth Analysis

Earnings Trend: SN.'s earnings have grown by 10.1% 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 (-2.7%) over the past year, making it difficult to compare to the Medical Equipment industry average (-4.9%).


Return on Equity

High ROE: SN.'s Return on Equity (14.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Smith & Nephew's financial position?


Financial Position Analysis

Short Term Liabilities: SN.'s short term assets ($2.9B) exceeds its short term liabilities ($1.5B)

Long Term Liabilities: SN.'s short term assets ($2.9B) exceeds its long term liabilities (2.5B)


Debt to Equity History and Analysis

Debt Level: SN.'s debt to equity ratio (40.7%) is considered high.

Reducing Debt: SN.'s debt to equity ratio has reduced from 49.1% to 40.7% over the past 5 years.

Debt Coverage: SN.'s debt is well covered by operating cash flow (53.8%).

Interest Coverage: SN.'s interest payments on its debt are well covered by EBIT (19.9x coverage).


Balance Sheet

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

Debt Coverage by Assets: SN.'s debt is covered by short term assets (assets are 1.5x debt).


Next Steps

Dividend

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

1.69%

Current Dividend Yield


Dividend Yield vs Market

company1.7%marketbottom25%2.0%markettop25%5.4%industryaverage1.8%forecastin3Years2.0%

Current dividend yield vs market & industry

Notable Dividend: SN.'s dividend (1.69%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.96%).

High Dividend: SN.'s dividend (1.69%) is low compared to the top 25% of dividend payers in the UK market (5.37%).


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: With its reasonably low payout ratio (45.6%), SN.'s dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SN.'s dividends in 3 years are forecast to be well covered by earnings (36.9% payout ratio).


Next Steps

Management

What is the CEO of Smith & Nephew's salary, the management and board of directors tenure and is there insider trading?

2.7yrs

Average management tenure


CEO

Roland Diggelmann (52yo)

0yrs

Tenure

US$59,000

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  ...


Management Age and Tenure

2.7yrs

Average Tenure

51yo

Average Age

Experienced Management: SN.'s management team is considered experienced (2.7 years average tenure).


Board Age and Tenure

3.7yrs

Average Tenure

60.5yo

Average Age

Experienced Board: SN.'s board of directors are considered experienced (3.7 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyUS$57,76723 Aug 19
Roberto Quarta
EntityIndividual
Role
Chairman of the Board
Chairman
Shares2,980
Max PriceUS$19.39
BuyUS$3,89623 Aug 19
Virginia Hilda Brunette Bottomley
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares201
Max PriceUS$19.39
BuyUS$3,89623 Aug 19
Angie Risley
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares201
Max PriceUS$19.39
BuyUS$5,05923 Aug 19
Roland Diggelmann
EntityIndividual
Role
Chief Executive Officer
Chief Executive Officer
Shares261
Max PriceUS$19.39
BuyUS$3,43123 Aug 19
Robin Freestone
EntityIndividual
Role
Lead Director
Senior Independent Non-Executive Director
Shares177
Max PriceUS$19.39
BuyUS$3,43123 Aug 19
Erik Engstrom
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares177
Max PriceUS$19.39
BuyUS$39,83128 Jun 19
Angie Risley
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares2,380
Max PriceUS$16.74

Ownership Breakdown

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


Management Team

  • Joe Metzger

    Senior Vice President of Marketing Services & Communications

    • Tenure: 8.8yrs
  • Graham Baker (51yo)

    CFO & Executive Director

    • Tenure: 2.6yrs
    • Compensation: US$1.98m
  • Phil Cowdy (52yo)

    Chief Business Development & Corporate Affairs Officer

    • Tenure: 5.8yrs
  • Roland Diggelmann (52yo)

    Chief Executive Officer

    • Tenure: 0yrs
    • Compensation: US$59.00k
  • Namal Nawana (48yo)

    Executive Officer

    • Tenure: 0.08yrs
    • Compensation: US$3.43m
  • Mark Gladwell (44yo)

    President of Global Operations

    • Tenure: 1.8yrs
  • Vasant Padmanabhan (52yo)

    President of Research & Development

    • Tenure: 3.3yrs
  • Elga Lohler (51yo)

    Chief Human Resources Officer

    • Tenure: 3.9yrs
  • Brad Cannon (51yo)

    President of Sports Medicine & ENT

    • Tenure: 1.8yrs
  • Cathy O'Rourke (46yo)

    Chief Legal & Compliance Officer

    • Tenure: 2.5yrs

Board Members

  • Roberto Quarta (70yo)

    Chairman

    • Tenure: 5.6yrs
    • Compensation: US$418.70k
  • Erik Engstrom (56yo)

    Independent Non-Executive Director

    • Tenure: 4.8yrs
    • Compensation: US$69.50k
  • Virginia Hilda Brunette Bottomley (71yo)

    Independent Non-Executive Director

    • Tenure: 7.6yrs
    • Compensation: US$69.50k
  • Marc Owen (60yo)

    Independent Non-Executive Director

    • Tenure: 2.1yrs
    • Compensation: US$171.78k
  • Angie Risley (61yo)

    Independent Non-Executive Director

    • Tenure: 1.9yrs
    • Compensation: US$83.67k
  • Vinita Bali (64yo)

    Independent Non-Executive Director

    • Tenure: 4.9yrs
    • Compensation: US$171.78k
  • Robin Freestone (60yo)

    Senior Independent Non-Executive Director

    • Tenure: 0.6yrs
    • Compensation: US$89.50k
  • Graham Baker (51yo)

    CFO & Executive Director

    • Tenure: 2.6yrs
    • Compensation: US$1.98m

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£14.426b
  • Shares outstanding: 873.27m
  • 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 sports medicine joint repair products for surgeons, including an array of instruments, technologies, and i ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/20 20:42
End of Day Share Price2019/11/20 00:00
Earnings2019/06/29
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.