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Smith & Nephew

LSE:SN.
Snowflake Description

Excellent balance sheet average dividend payer.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
SN.
LSE
£15B
Market Cap
  1. Home
  2. GB
  3. Healthcare
Company description

Smith & Nephew plc develops, manufactures, and sells medical devices worldwide. The last earnings update was 102 days ago. More info.


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SN. Share Price and Events
7 Day Returns
0.6%
LSE:SN.
0.7%
GB Medical Equipment
1.5%
GB Market
1 Year Returns
24.6%
LSE:SN.
5.8%
GB Medical Equipment
-4.8%
GB Market
SN. Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Smith & Nephew (SN.) 0.6% 4.5% 15.1% 24.6% 52.8% 57.9%
GB Medical Equipment 0.7% 2.7% 11.3% 5.8% 50% 51.7%
GB Market 1.5% 1.8% 1.9% -4.8% 21% 3.7%
1 Year Return vs Industry and Market
  • SN. outperformed the Medical Equipment industry which returned 5.8% over the past year.
  • SN. outperformed the Market in United Kingdom of Great Britain and Northern Ireland which returned -4.8% over the past year.
Price Volatility
SN.
Industry
5yr Volatility vs Market

SN. Value

 Is Smith & Nephew undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Smith & Nephew to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Smith & Nephew.

LSE:SN. Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 16 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 7.5%
Perpetual Growth Rate 10-Year GB Government Bond Rate 1.2%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for LSE:SN.
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year GB Govt Bond Rate 1.2%
Equity Risk Premium S&P Global 6.7%
Medical Equipment Unlevered Beta Simply Wall St/ S&P Global 0.85
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.853 (1 + (1- 19%) (7.83%))
0.938
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
0.94
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 1.23% + (0.938 * 6.65%)
7.46%

Discounted Cash Flow Calculation for LSE:SN. using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Smith & Nephew is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

LSE:SN. DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (USD, Millions) Source Present Value
Discounted (@ 7.46%)
2019 706.17 Analyst x6 657.13
2020 822.29 Analyst x7 712.05
2021 907.60 Analyst x5 731.35
2022 973.65 Est @ 7.28% 730.09
2023 1,026.83 Est @ 5.46% 716.49
2024 1,069.87 Est @ 4.19% 694.69
2025 1,105.20 Est @ 3.3% 667.79
2026 1,134.81 Est @ 2.68% 638.07
2027 1,160.28 Est @ 2.24% 607.08
2028 1,182.77 Est @ 1.94% 575.88
Present value of next 10 years cash flows $6,730.61
LSE:SN. DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2028 × (1 + g) ÷ (Discount Rate – g)
= $1,182.77 × (1 + 1.23%) ÷ (7.46% – 1.23%)
$19,201.02
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= $19,201.02 ÷ (1 + 7.46%)10
$9,348.74
LSE:SN. Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= $6,730.61 + $9,348.74
$16,079.35
Equity Value per Share
(USD)
= Total value / Shares Outstanding
= $16,079.35 / 873.04
$18.42
LSE:SN. Discount to Share Price
Calculation Result
Exchange Rate USD/GBP
(Reporting currency to currency of LSE:SN.)
0.793
Value per Share
(GBP)
= Value per Share in USD x Exchange Rate (USD/GBP)
= $18.42 x 0.793
£14.61
Value per share (GBP) From above. £14.61
Current discount Discount to share price of £17.04
= -1 x (£17.04 - £14.61) / £14.61
-16.6%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

  • The current share price of Smith & Nephew is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Smith & Nephew's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Smith & Nephew's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
LSE:SN. PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2018-12-31) in USD $0.76
LSE:SN. Share Price ** LSE (2019-06-14) in GBP £17.04
LSE:SN. Share Price converted to USD reporting currency Exchange rate (GBP/ USD) 1.261 $21.47
United Kingdom of Great Britain and Northern Ireland Medical Equipment Industry PE Ratio Median Figure of 10 Publicly-Listed Medical Equipment Companies 27.44x
United Kingdom of Great Britain and Northern Ireland Market PE Ratio Median Figure of 789 Publicly-Listed Companies 16.28x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Smith & Nephew.

LSE:SN. PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= LSE:SN. Share Price ÷ EPS (both in USD)

= 21.47 ÷ 0.76

28.27x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Smith & Nephew is overvalued based on earnings compared to the GB Medical Equipment industry average.
  • Smith & Nephew is overvalued based on earnings compared to the United Kingdom of Great Britain and Northern Ireland market.
Price based on expected Growth
Does Smith & Nephew's expected growth come at a high price?
Raw Data
LSE:SN. PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 28.27x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 16 Analysts
10%per year
United Kingdom of Great Britain and Northern Ireland Medical Equipment Industry PEG Ratio Median Figure of 8 Publicly-Listed Medical Equipment Companies 1.57x
United Kingdom of Great Britain and Northern Ireland Market PEG Ratio Median Figure of 577 Publicly-Listed Companies 1.48x

*Line of best fit is calculated by linear regression .

LSE:SN. PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 28.27x ÷ 10%

2.84x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Smith & Nephew is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Smith & Nephew's assets?
Raw Data
LSE:SN. PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2018-12-31) in USD $5.58
LSE:SN. Share Price * LSE (2019-06-14) in GBP £17.04
LSE:SN. Share Price converted to USD reporting currency Exchange rate (GBP/ USD) 1.261 $21.47
United Kingdom of Great Britain and Northern Ireland Medical Equipment Industry PB Ratio Median Figure of 20 Publicly-Listed Medical Equipment Companies 2.75x
United Kingdom of Great Britain and Northern Ireland Market PB Ratio Median Figure of 1,371 Publicly-Listed Companies 1.48x
LSE:SN. PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= LSE:SN. Share Price ÷ Book Value per Share (both in USD)

= 21.47 ÷ 5.58

3.85x

* Primary Listing of Smith & Nephew.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Smith & Nephew is overvalued based on assets compared to the GB Medical Equipment industry average.
X
Value checks
We assess Smith & Nephew's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Medical Equipment industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Medical Equipment industry average (and greater than 0)? (1 check)
  5. Smith & Nephew has a total score of 0/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

SN. Future Performance

 How is Smith & Nephew expected to perform in the next 1 to 3 years based on estimates from 16 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
10%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Smith & Nephew expected to grow at an attractive rate?
  • Smith & Nephew's earnings growth is expected to exceed the low risk savings rate of 1.2%.
Growth vs Market Checks
  • Smith & Nephew's earnings growth is positive but not above the United Kingdom of Great Britain and Northern Ireland market average.
  • Smith & Nephew's revenue growth is positive but not above the United Kingdom of Great Britain and Northern Ireland market average.
Annual Growth Rates Comparison
Raw Data
LSE:SN. Future Growth Rates Data Sources
Data Point Source Value (per year)
LSE:SN. Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 16 Analysts 10%
LSE:SN. Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 16 Analysts 3.8%
United Kingdom of Great Britain and Northern Ireland Medical Equipment Industry Earnings Growth Rate Market Cap Weighted Average 8%
United Kingdom of Great Britain and Northern Ireland Medical Equipment Industry Revenue Growth Rate Market Cap Weighted Average 4.9%
United Kingdom of Great Britain and Northern Ireland Market Earnings Growth Rate Market Cap Weighted Average 10.8%
United Kingdom of Great Britain and Northern Ireland Market Revenue Growth Rate Market Cap Weighted Average 5%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
LSE:SN. Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (5 months ago) See Below
Future Estimates Average of up to 16 Analyst Estimates (S&P Global) See Below
All numbers in USD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
LSE:SN. Future Estimates Data
Date (Data in USD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2023-12-31 5,977 1,451 1,093 3
2022-12-31 5,719 1,373 1,014 5
2021-12-31 5,477 1,308 876 12
2020-12-31 5,272 1,237 797 16
2019-12-31 5,076 1,137 636 12
LSE:SN. Past Financials Data
Date (Data in USD Millions) Revenue Cash Flow Net Income *
2018-12-31 4,904 931 663
2018-09-30 4,887 984 690
2018-06-30 4,869 1,036 717
2018-03-31 4,817 1,063 742
2017-12-31 4,765 1,090 767
2017-09-30 4,721 1,011 817
2017-07-01 4,677 931 867
2017-04-01 4,673 890 826
2016-12-31 4,669 849 784
2016-09-30 4,680 829 570
2016-07-02 4,690 809 356
2016-04-02 4,662 920 383

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Smith & Nephew's earnings are expected to grow by 10% yearly, however this is not considered high growth (20% yearly).
  • Smith & Nephew's revenue is expected to grow by 3.8% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
LSE:SN. Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (5 months ago) See Below
Future Estimates Average of up to 16 Analyst Estimates (S&P Global) See Below

All data from Smith & Nephew Company Filings, last reported 5 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

LSE:SN. Future Estimates Data
Date (Data in USD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2023-12-31 1.35 1.35 1.35 1.00
2022-12-31 1.23 1.23 1.23 1.00
2021-12-31 1.02 1.11 0.96 7.00
2020-12-31 0.93 0.98 0.87 9.00
2019-12-31 0.75 0.89 0.64 9.00
LSE:SN. Past Financials Data
Date (Data in USD Millions) EPS *
2018-12-31 0.76
2018-09-30 0.79
2018-06-30 0.82
2018-03-31 0.85
2017-12-31 0.88
2017-09-30 0.93
2017-07-01 0.98
2017-04-01 0.93
2016-12-31 0.88
2016-09-30 0.64
2016-07-02 0.40
2016-04-02 0.43

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Smith & Nephew is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
X
Future performance checks
We assess Smith & Nephew's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United Kingdom of Great Britain and Northern Ireland market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United Kingdom of Great Britain and Northern Ireland market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Smith & Nephew has a total score of 1/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

SN. Past Performance

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

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Smith & Nephew's growth in the last year to its industry (Medical Equipment).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Smith & Nephew's year on year earnings growth rate has been positive over the past 5 years.
  • Smith & Nephew's 1-year earnings growth is negative, it can't be compared to the 5-year average.
  • Smith & Nephew's 1-year earnings growth is negative, it can't be compared to the GB Medical Equipment industry average.
Earnings and Revenue History
Smith & Nephew's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Smith & Nephew Company Filings, last reported 5 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

LSE:SN. Past Revenue, Cash Flow and Net Income Data
Date (Data in USD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2018-12-31 4,904.00 663.00 2,391.00 246.00
2018-09-30 4,886.50 690.00 2,443.50 239.00
2018-06-30 4,869.00 717.00 2,496.00 232.00
2018-03-31 4,817.00 742.00 2,452.50 227.50
2017-12-31 4,765.00 767.00 2,409.00 223.00
2017-09-30 4,721.00 817.00 2,345.50 223.50
2017-07-01 4,677.00 867.00 2,282.00 224.00
2017-04-01 4,673.00 825.50 2,268.50 227.00
2016-12-31 4,669.00 784.00 2,255.00 230.00
2016-09-30 4,679.50 570.00 2,515.00 227.50
2016-07-02 4,690.00 356.00 2,393.00 225.00
2016-04-02 4,662.00 383.00 2,363.00 223.50
2015-12-31 4,634.00 410.00 2,524.00 222.00
2015-09-30 4,702.00 512.50 2,333.00 224.00
2015-06-27 4,669.00 557.00 2,326.00 225.00
2015-03-27 4,680.00 498.50 2,374.50 234.00
2014-12-31 4,617.00 501.00 2,323.00 235.00
2014-09-27 4,543.00 503.00 2,285.00 239.00
2014-06-28 4,422.00 523.00 2,201.00 241.00
2014-03-29 4,349.00 563.00 2,124.00 235.00
2013-12-31 4,351.00 556.00 2,149.00 231.00
2013-09-28 4,253.00 534.00 2,045.00 215.00
2013-06-29 4,178.00 544.00 2,013.00 196.00
2013-03-30 4,133.00 705.00 1,991.00 180.00
2012-12-31 4,137.00 721.00 1,982.00 171.00
2012-09-29 4,166.00 721.00 2,028.00 166.00
2012-06-30 4,246.00 722.00 2,064.00 169.00

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Smith & Nephew has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • Smith & Nephew used its assets less efficiently than the GB Medical Equipment industry average last year based on Return on Assets.
  • Smith & Nephew has improved its use of capital last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Smith & Nephew's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Medical Equipment industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Smith & Nephew has a total score of 2/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

SN. Health

 How is Smith & Nephew's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Smith & Nephew's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Smith & Nephew is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Smith & Nephew's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Smith & Nephew's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of physical assets or inventory.
  • Debt is covered by short term assets, assets are 2.1x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Smith & Nephew Company Filings, last reported 5 months ago.

LSE:SN. Past Debt and Equity Data
Date (Data in USD Millions) Total Equity Total Debt Cash & Short Term Investments
2018-12-31 4,874.00 1,468.00 365.00
2018-09-30 4,874.00 1,468.00 365.00
2018-06-30 4,643.00 1,506.00 99.00
2018-03-31 4,643.00 1,506.00 99.00
2017-12-31 4,644.00 1,452.00 169.00
2017-09-30 4,644.00 1,452.00 169.00
2017-07-01 4,201.00 1,668.00 69.00
2017-04-01 4,201.00 1,668.00 69.00
2016-12-31 3,958.00 1,651.00 100.00
2016-09-30 3,958.00 1,651.00 100.00
2016-07-02 3,944.00 1,779.00 85.00
2016-04-02 3,944.00 1,779.00 85.00
2015-12-31 3,966.00 1,480.00 121.00
2015-09-30 3,966.00 1,480.00 121.00
2015-06-27 4,049.00 1,600.00 88.00
2015-03-27 4,049.00 1,600.00 88.00
2014-12-31 4,040.00 1,705.00 93.00
2014-09-27 4,017.00 2,027.00 147.00
2014-06-28 4,155.00 2,051.00 140.00
2014-03-29 4,216.00 398.00 182.00
2013-12-31 4,047.00 391.00 137.00
2013-09-28 3,911.00 358.00 136.00
2013-06-29 3,895.00 383.00 101.00
2013-03-30 3,953.00 263.00 125.00
2012-12-31 3,884.00 468.00 178.00
2012-09-29 3,642.00 69.00 445.00
2012-06-30 3,557.00 72.00 221.00
  • Smith & Nephew's level of debt (30.1%) compared to net worth is satisfactory (less than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (9.7% vs 30.1% today).
  • Debt is well covered by operating cash flow (63.4%, greater than 20% of total debt).
  • Interest payments on debt are well covered by earnings (EBIT is 19x coverage).
X
Financial health checks
We assess Smith & Nephew's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Smith & Nephew has a total score of 5/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

SN. Dividends

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

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
1.68%
Current annual income from Smith & Nephew dividends. Estimated to be 1.91% next year.
If you bought £2,000 of Smith & Nephew shares you are expected to receive £34 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Smith & Nephew's pays a lower dividend yield than the bottom 25% of dividend payers in United Kingdom of Great Britain and Northern Ireland (1.98%).
  • Smith & Nephew's dividend is below the markets top 25% of dividend payers in United Kingdom of Great Britain and Northern Ireland (5.43%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
LSE:SN. Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 16 Analyst Estimates (S&P Global) See Below
United Kingdom of Great Britain and Northern Ireland Medical Equipment Industry Average Dividend Yield Market Cap Weighted Average of 6 Stocks 1.9%
United Kingdom of Great Britain and Northern Ireland Market Average Dividend Yield Market Cap Weighted Average of 706 Stocks 4.2%
United Kingdom of Great Britain and Northern Ireland Minimum Threshold Dividend Yield 10th Percentile 1.1%
United Kingdom of Great Britain and Northern Ireland Bottom 25% Dividend Yield 25th Percentile 2%
United Kingdom of Great Britain and Northern Ireland Top 25% Dividend Yield 75th Percentile 5.4%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

LSE:SN. Future Dividends Estimate Data
Date (Data in $) Dividend per Share (annual) Avg. No. Analysts
2023-12-31 0.49 1.00
2022-12-31 0.45 2.00
2021-12-31 0.43 9.00
2020-12-31 0.42 13.00
2019-12-31 0.37 12.00
LSE:SN. Past Annualized Dividends Data
Date (Data in $) Dividend per share (annual) Avg. Yield (%)
2019-04-24 0.360 1.740
2018-03-05 0.350 1.917
2018-02-08 0.350 1.990
2017-02-09 0.308 1.807
2016-04-28 0.308 1.971
2015-04-22 0.296 1.737
2014-03-07 0.274 1.624
2013-02-07 0.261 2.102
2012-03-01 0.174 1.684
2012-02-02 0.174 1.742
2011-08-05 0.164 1.786
2011-02-10 0.158 1.440
2010-03-26 0.144 1.515
2010-02-11 0.144 1.400
2009-07-30 0.136 1.477

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Dividends per share have been stable in the past 10 years.
  • Dividends per share have increased over the past 10 years.
Current Payout to shareholders
What portion of Smith & Nephew's earnings are paid to the shareholders as a dividend.
  • Dividends paid are well covered by earnings (2.1x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be well covered by earnings (2.7x coverage).
X
Income/ dividend checks
We assess Smith & Nephew's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 1.1%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Smith & Nephew afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Smith & Nephew has a total score of 4/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

SN. Management

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

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Namal Nawana
COMPENSATION $3,431,398
AGE 47
TENURE AS CEO 1.1 years
CEO Bio

Mr. Namal Nawana has been Chief Executive Officer and Executive Director at Smith & Nephew plc since May 07, 2018. Mr. Nawana has been Director of Hologic, Inc. since January 11, 2018. Mr. Nawana served as the Chief Executive Officer and President of Alere Inc. from October 28, 2014 to October 2017. He served as Chief Executive Officer and President at Alere Limited since 2014. He has more than 20 years of global healthcare experience and held various leadership roles, spanning the fields of engineering, marketing, sales and general management, including in Canada, Europe, the United States and the Asia Pacific region at Johnson & Johnson. His career experience has fueled a passionate belief that strategic innovation can achieve better access, quality and effectiveness of healthcare. Mr. Nawana's experience before and at Johnson & Johnson has earned him a reputation as a strategist, an innovator and a global operations leader focused on scaling businesses profitably. He served as the Interim Chief Executive Officer and Interim President of Alere Inc. from July 1, 2014 to October 28, 2014 and served as its Chief Operating Officer from December 30, 2012 to July 1, 2014. Mr. Nawana served as the Worldwide President of DePuy Synthes Spine, a Johnson & Johnson company, responsible for, among other things, managing all operations globally. He served as an Area Vice President for Johnson & Johnson Medical's operations in Australia and New Zealand, Chairman of the DePuy Asia Pacific Franchise Council, General Manager for DePuy Australia from 2007 to December 2008 and General Manager for Depuy Canada from 2004 to 2007. Through these roles, Mr. Nawana demonstrated a consistent track record of delivering year over year results. During this time, he was responsible for the planning and integration of numerous significant business acquisitions and he played a key role in integrating the multi-billion dollar Synthes acquisition. He drove continuous growth, innovation and profitability in a variety of specialties and technology fields. He also led diverse scientific and engineering functions as well as commercial operations during the 10-year period he spent living and working in Europe. He served as Director at Alere Limited since 2014. He served as a Director at Alere Inc. since October 28, 2014. He serves as Director at AdvaMedDx. Mr. Nawana achieved Six Sigma Process Excellence Black Belt certification through Johnson and Johnson and also Chartered Professional Engineer qualifications from the Institution of Engineers Australia. Mr. Nawana holds an Honours degree in Mechanical Engineering in 1992, a Masters of Medical Science from the University of Adelaide in South Australia in 1995 and an MBA from the Henley Business School in the United Kingdom in 2000.

CEO Compensation
  • Insufficient data for Namal to compare compensation growth.
  • Namal's remuneration is lower than average for companies of similar size in United Kingdom of Great Britain and Northern Ireland.
Management Team Tenure

Average tenure and age of the Smith & Nephew management team in years:

2.3
Average Tenure
50
Average Age
  • The tenure for the Smith & Nephew management team is about average.
Management Team

Namal Nawana

TITLE
CEO & Executive Director
COMPENSATION
$3M
AGE
47
TENURE
1.1 yrs

Graham Baker

TITLE
CFO & Executive Director
COMPENSATION
$2M
AGE
50
TENURE
2.3 yrs

Mark Gladwell

TITLE
President of Global Operations
AGE
43
TENURE
1.4 yrs

Cathy O'Rourke

TITLE
Chief Legal & Compliance Officer
AGE
45
TENURE
2.1 yrs

Joe Metzger

TITLE
Senior Vice President of Marketing Services & Communications
TENURE
8.4 yrs

Elga Lohler

TITLE
Chief Human Resources Officer
AGE
50
TENURE
3.5 yrs

Phil Cowdy

TITLE
Executive VP of Business Development & Corporate Affairs
AGE
51
TENURE
5.4 yrs

Brad Cannon

TITLE
President of Sports Medicine & ENT
AGE
50
TENURE
1.4 yrs

Vasant Padmanabhan

TITLE
President of Research & Development
AGE
51
TENURE
2.8 yrs

Steve Kane

TITLE
Head of Human Resources for the US
Board of Directors Tenure

Average tenure and age of the Smith & Nephew board of directors in years:

1.9
Average Tenure
59
Average Age
  • The average tenure for the Smith & Nephew board of directors is less than 3 years, this suggests a new board.
Board of Directors

Roberto Quarta

TITLE
Chairman
COMPENSATION
$419K
AGE
69
TENURE
5.2 yrs

Namal Nawana

TITLE
CEO & Executive Director
COMPENSATION
$3M
AGE
47
TENURE
1.1 yrs

Graham Baker

TITLE
CFO & Executive Director
COMPENSATION
$2M
AGE
50
TENURE
2.2 yrs

Robin Freestone

TITLE
Senior Independent Non-Executive Director
COMPENSATION
$90K
AGE
59
TENURE
0.2 yrs

Angie Risley

TITLE
Independent Non-Executive Director
COMPENSATION
$84K
AGE
60
TENURE
1.5 yrs

Virginia Hilda Brunette Bottomley

TITLE
Independent Non-Executive Director
COMPENSATION
$70K
AGE
70
TENURE
7.2 yrs

Vinita Bali

TITLE
Independent Non-Executive Director
COMPENSATION
$172K
AGE
63
TENURE
4.5 yrs

Erik Engstrom

TITLE
Independent Non-Executive Director
COMPENSATION
$70K
AGE
55
TENURE
4.4 yrs

Marc Owen

TITLE
Independent Non-Executive Director
COMPENSATION
$172K
AGE
59
TENURE
1.7 yrs

Roland Diggelmann

TITLE
Independent Non-Executive Director
COMPENSATION
$59K
AGE
51
TENURE
1.3 yrs
Who owns this company?
Recent Insider Trading
  • No 3 month insider trading information.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price (£) Value (£)
16. Nov 18 Sell Rodrigo Bianchi Individual 16. Nov 18 16. Nov 18 -48,832 £13.88 £-677,847
12. Nov 18 Sell Rodrigo Bianchi Individual 12. Nov 18 12. Nov 18 -108,226 £13.93 £-1,507,945
23. Aug 18 Buy Roland Diggelmann Individual 23. Aug 18 23. Aug 18 367 £13.80 £5,063
23. Aug 18 Buy Ian Barlow Individual 23. Aug 18 23. Aug 18 282 £13.80 £3,891
23. Aug 18 Buy Robin Freestone Individual 23. Aug 18 23. Aug 18 249 £13.80 £3,435
23. Aug 18 Buy Angie Risley Individual 23. Aug 18 23. Aug 18 359 £13.80 £4,953
23. Aug 18 Buy Virginia Hilda Brunette Bottomley Individual 23. Aug 18 23. Aug 18 282 £13.80 £3,891
23. Aug 18 Buy Erik Engstrom Individual 23. Aug 18 23. Aug 18 249 £13.80 £3,435
23. Aug 18 Buy Roberto Quarta Individual 23. Aug 18 23. Aug 18 4,188 £13.80 £57,781
X
Management checks
We assess Smith & Nephew's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Smith & Nephew has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

SN. News

Simply Wall St News

Smith & Nephew plc (LON:SN.) Has A ROE Of 14%

The formula for return on equity is: Return on Equity = Net Profit ÷ Shareholders' Equity Or for Smith & Nephew: 14% = US$663m ÷ US$4.9b (Based on the trailing twelve months to December 2018.) Most readers would understand what net profit is, but it’s worth explaining the concept of shareholders’ equity. … Does Smith & Nephew Have A Good Return On Equity? … Smith & Nephew's Debt And Its 14% ROE Although Smith & Nephew does use debt, its debt to equity ratio of 0.30 is still low.

Simply Wall St -

What Are Analysts Saying About Smith & Nephew plc's (LON:SN.) Growth?

Smith & Nephew plc's (LON:SN.) most recent earnings announcement in December 2018 confirmed that the business experienced a major headwind with earnings falling by -14%. … Today I want to provide a brief commentary on how market analysts view Smith & Nephew's earnings growth trajectory over the next few years and whether the future looks brighter. … View our latest analysis for Smith & Nephew Analysts' outlook for the coming year seems pessimistic, with earnings falling by -3.5%.

Simply Wall St -

Has Smith & Nephew plc (LON:SN.) Been Employing Capital Shrewdly?

The formula for calculating the return on capital employed is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) Or for Smith & Nephew: 0.15 = US$969m ÷ (US$8.1b - US$1.5b) (Based on the trailing twelve months to December 2018.) So, Smith & Nephew has an ROCE of 15%. … What Are Current Liabilities, And How Do They Affect Smith & Nephew's ROCE? … Due to the way ROCE is calculated, a high level of current liabilities makes a company look as though it has less capital employed, and thus can (sometimes unfairly) boost the ROCE.

Simply Wall St -

Here's How P/E Ratios Can Help Us Understand Smith & Nephew plc (LON:SN.)

How Do I Calculate Smith & Nephew's Price To Earnings Ratio … Price to Earnings Ratio = Share Price (in reporting currency) ÷ Earnings per Share (EPS) … P/E of 25.41 = $19.3 (Note: this is the share price in the reporting currency, namely, USD ) ÷ $0.76

Simply Wall St -

Is Smith & Nephew plc (LON:SN.) A Great Dividend Stock?

A dividend paying company with growing earnings can be rewarding in the long term. … Unfortunately, one common occurrence with dividend companies is for investors to be enticed in by the seemingly attractive yield, and lose money when the company has to cut its dividend payments. … When buying stocks for their dividends, you should always run through the checks below, to see if the dividend looks sustainable.

Simply Wall St -

What Type Of Shareholder Owns Smith & Nephew plc's (LON:SN.)?

Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. … Our analysis of the ownership of the company, below, shows that. … View our latest analysis for Smith & Nephew

Simply Wall St -

Do You Know Smith & Nephew plc’s (LON:SN.) Cash Situation?

I will take you through Smith & Nephew’s cash flow health and the risk-return concept based on the stock’s cash flow yield, using the most recent financial data. … Smith & Nephew generates cash through its day-to-day business, which needs to be reinvested into the company in order for it to continue operating. … The two ways to assess whether Smith & Nephew’s FCF is sufficient, is to compare the FCF yield to the market index yield, as well as determine whether the top-line operating cash flows will continue to grow

Simply Wall St -

Interested In Smith & Nephew plc (LON:SN.)? Here's How It Performed Recently

When Smith & Nephew plc (LON:SN.) released its most recent earnings update (31 December 2018), I wanted to understand how these figures stacked up against its past performance. … The two benchmarks I used were Smith & Nephew's average earnings over the past couple of years, and its industry performance. … Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 10.0%, indicating the rate at which SN?

Simply Wall St -

What Can We Expect From Smith & Nephew plc's (LON:SN.) Earnings In The Year Ahead?

On 31 December 2018, Smith & Nephew plc (LON:SN.) announced its latest earnings update. … with earnings expected to decline by -0.3% in the upcoming year

Simply Wall St -

Have Insiders Been Selling Smith & Nephew plc (LON:SN.) Shares?

So shareholders might well want to know whether insiders have been buying or selling shares in Smith & Nephew plc (LON:SN.). … But logic dictates you should pay some attention to whether insiders are buying or selling shares. … Smith & Nephew Insider Transactions Over The Last Year.

Simply Wall St -

SN. Company Info

Description

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 implants necessary to perform minimally invasive surgery of the joints, such as the repair of soft tissue injuries and degenerative conditions of the knee, hip, and shoulder. It also provides arthroscopic enabling technologies for healthcare providers comprising fluid management equipment for surgical access, high definition cameras, digital image capture, scopes, light sources, and monitors to assist with visualization inside the joints, radio frequency, electromechanical and mechanical tissue resection devices, and hand instruments for removing damaged tissue. In addition, the company offers trauma and extremities products that include internal and external devices used in the stabilization of severe fractures and deformity correction procedures; knee implant products for specialized knee replacement procedures; and hip implant products for the reconstruction of hip joints. Further, it provides advanced wound care products for the treatment and prevention of acute and chronic wounds, which comprise leg, diabetic and pressure ulcers, burns, and post-operative wounds; advanced wound bioactives, including biologics and other bioactive technologies for debridement and dermal repair/regeneration; and advanced wound devices, such as traditional and single-use negative pressure wound therapy and hydrosurgery systems. Additionally, it offers meniscal repair system. It primarily serves the providers of medical and surgical treatments and services. Smith & Nephew plc was founded in 1856 and is headquartered in London, the United Kingdom.

Details
Name: Smith & Nephew plc
SN.
Exchange: LSE
Founded: 1856
£14,872,190,695
873,037,317
Website: http://www.smith-nephew.com
Address: Smith & Nephew plc
15 Adam Street,
London,
Greater London, WC2N 6LA,
United Kingdom
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
LSE SN. Ordinary Shares London Stock Exchange GB GBP 03. Jan 1980
OTCPK SNNU.F Ordinary Shares Pink Sheets LLC US USD 03. Jan 1980
DB NPW1 Ordinary Shares Deutsche Boerse AG DE EUR 03. Jan 1980
BATS-CHIXE SNL Ordinary Shares BATS 'Chi-X Europe' GB GBP 03. Jan 1980
NYSE SNN ADR EACH REPR 5 USD0.20 New York Stock Exchange US USD 16. Nov 1999
DB NPWA ADR EACH REPR 5 USD0.20 Deutsche Boerse AG DE EUR 16. Nov 1999
Number of employees
Current staff
Staff numbers
16,377
Smith & Nephew employees.
Industry
Health Care Equipment
Healthcare
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/06/14 20:42
End of day share price update: 2019/06/14 00:00
Last estimates confirmation: 2019/06/12
Last earnings filing: 2019/03/04
Last earnings reported: 2018/12/31
Last annual earnings reported: 2018/12/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

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.