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 and good value.


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 +/- 4% a week.

Volatility Over Time: SN.'s weekly volatility (4%) has been stable over the past year.


Market Performance


7 Day Return

-2.5%

SN.

-0.9%

GB Medical Equipment

1.2%

GB Market


1 Year Return

-19.5%

SN.

-9.0%

GB Medical Equipment

4.6%

GB Market

Return vs Industry: SN. underperformed the UK Medical Equipment industry which returned -9% over the past year.

Return vs Market: SN. underperformed the UK Market which returned 4.6% over the past year.


Shareholder returns

SN.IndustryMarket
7 Day-2.5%-0.9%1.2%
30 Day-12.9%-9.1%0.7%
90 Day-11.8%-7.0%2.6%
1 Year-17.8%-19.5%-7.2%-9.0%10.6%4.6%
3 Year7.6%1.5%9.3%3.0%8.6%-4.5%
5 Year32.7%20.6%31.6%21.0%39.5%12.6%

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?

39.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SN. (£13.52) is trading below our estimate of fair value (£22.45)

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


Price To Earnings Ratio

PE vs Industry: SN. is good value based on its PE Ratio (36.4x) compared to the GB Medical Equipment industry average (48.4x).

PE vs Market: SN. is poor value based on its PE Ratio (36.4x) compared to the UK market (24.2x).


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 good value based on its PB Ratio (3.1x) compared to the GB Medical Equipment industry average (4x).


Next Steps

Future Growth

How is Smith & Nephew forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

18.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SN.'s forecast earnings growth (18.8% per year) is above the savings rate (1%).

Earnings vs Market: SN.'s earnings (18.8% per year) are forecast to grow slower than the UK market (22.6% per year).

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

Revenue vs Market: SN.'s revenue (6.5% per year) is forecast to grow slower than the UK market (6.6% per year).

High Growth Revenue: SN.'s revenue (6.5% 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%).


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 $134.0M impacting its December 31 2020 financial results.

Growing Profit Margin: SN.'s current net profit margins (9.8%) are lower than last year (11.7%).


Past Earnings Growth Analysis

Earnings Trend: SN.'s earnings have declined 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 (-25.2%) over the past year, making it difficult to compare to the Medical Equipment industry average (-10.5%).


Return on Equity

High ROE: SN.'s Return on Equity (8.5%) 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 ($4.7B) exceed its short term liabilities ($1.7B).

Long Term Liabilities: SN.'s short term assets ($4.7B) exceed its long term liabilities ($4.0B).


Debt to Equity History and Analysis

Debt Level: SN.'s debt to equity ratio (66%) is considered high.

Reducing Debt: SN.'s debt to equity ratio has increased from 37.2% to 66% over the past 5 years.

Debt Coverage: SN.'s debt is well covered by operating cash flow (26.8%).

Interest Coverage: SN.'s interest payments on its debt are well covered by EBIT (7.7x coverage).


Balance Sheet


Next Steps

Dividend

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

2.01%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: SN.'s dividend (2.01%) is higher than the bottom 25% of dividend payers in the UK market (1.49%).

High Dividend: SN.'s dividend (2.01%) is low compared to the top 25% of dividend payers in the UK market (4.51%).


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 reasonable payout ratio (73.2%), SN.'s dividend 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 (38.7% payout ratio).


Next Steps

Management

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

3.5yrs

Average management tenure


CEO

Roland Diggelmann (53 yo)

1.33yrs

Tenure

US$1,697,773

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 since 2008 until...


CEO Compensation Analysis

Compensation vs Market: Roland's total compensation ($USD1.70M) is below average for companies of similar size in the UK market ($USD3.96M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Roland Diggelmann
Chief Executive Officer1.33yrsUS$1.70m0.0021%
$ 245.5k
Anne-Francoise Nesmes
CFO & Executive Director0.67yrUS$799.64kno data
Mark Gladwell
President of Global Operations and Global Business Services3.17yrsno data0.00018%
$ 21.4k
Andrew Swift
Vice President of Investor Relationsno datano datano data
Catheryn O'Rourke
Chief Legal & Compliance Officer3.83yrsno data0.0072%
$ 849.3k
Joe Metzger
Senior Vice President of Marketing Services & Communications10.17yrsno datano data
Elga Lohler
Chief Human Resources Officer5.25yrsno data0.010%
$ 1.2m
Philip Cowdy
Chief Business Development & Corporate Affairs Officer7.17yrsno data0.0040%
$ 473.3k
Bradley Cannon
President of Sports Medicine & ENT3.17yrsno data0.0074%
$ 882.5k
Vasant Padmanabhan
President of Research & Development4.58yrsno data0.0052%
$ 612.1k
Steve Kane
Head of Human Resources for the USno datano datano data
Melissa Guerdan
Chief Quality & Regulatory Affairs Officer2.67yrsno data0.00015%
$ 17.8k

3.5yrs

Average Tenure

52yo

Average Age

Experienced Management: SN.'s management team is considered experienced (3.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Anne-Francoise Nesmes
CFO & Executive Director0.67yrUS$799.64kno data
Roberto Quarta
Chairman6.92yrsUS$583.08k0.010%
$ 1.2m
Erik Engstrom
Independent Non-Executive Director6.17yrsUS$94.89k0.0019%
$ 219.4k
Virginia Hilda Brunette Bottomley
Independent Non-Executive Director8.92yrsUS$94.89k0.0022%
$ 264.5k
Marc Owen
Independent Non-Executive Director3.42yrsUS$171.78k0.00089%
$ 105.6k
Angie Risley
Independent Non-Executive Director3.5yrsUS$122.19k0.00054%
$ 64.1k
C. Richard Medlock
Non-Executive Director0.92yrUS$80.61k0.000030%
$ 3.6k
Changzheng Ma
Non-Executive Director0.083yrno datano data
Robin Freestone
Senior Independent Non-Executive Director1.92yrsUS$122.19k0.0018%
$ 218.3k
Katarzyna Mazur-Hofsaess
Non-Executive Director0.33yrUS$14.34kno data
Robert White
Independent Non-Executive Director0.83yrUS$89.78k0.00071%
$ 84.2k

1.9yrs

Average Tenure

60yo

Average Age

Experienced Board: SN.'s board of directors are not considered experienced ( 1.9 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: Insufficient data to determine if insiders have bought more shares than they have sold 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£11.862b
  • Shares outstanding: 877.68m
  • 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 Analysis2021/03/07 19:11
End of Day Share Price2021/03/05 00:00
Earnings2020/12/31
Annual Earnings2020/12/31


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.