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


Market Performance


7 Day Return

-1.3%

SN.

0.2%

GB Medical Equipment

2.0%

GB Market


1 Year Return

43.6%

SN.

21.7%

GB Medical Equipment

3.3%

GB Market

Return vs Industry: SN. exceeded the UK Medical Equipment industry which returned 21.7% over the past year.

Return vs Market: SN. exceeded the UK Market which returned 3.3% over the past year.


Share holder returns

SN.IndustryMarket
7 Day-1.3%0.2%2.0%
30 Day-1.6%0.3%-1.0%
90 Day6.0%7.8%-1.7%
1 Year46.1%43.6%24.3%21.7%8.3%3.3%
3 Year58.7%50.0%49.6%41.9%19.0%4.5%
5 Year117.1%96.5%100.1%82.6%38.4%8.4%

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 based on future cash flows and its price relative to the stock market?

19%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Undervalued: SN. (£18.6) is trading below our estimate of fair value (£23.02)

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


Price Based on Earnings

PE vs Industry: SN. is poor value based on its PE Ratio (29.6x) compared to the Medical Equipment industry average (29x).

PE vs Market: SN. is poor value based on its PE Ratio (29.6x) compared to the UK market (16.4x).


Price Based on Expected Growth

Low PEG Ratio: SN. is poor value based on its PEG Ratio (2.4x)


Price Based on Value of Assets

PB vs Industry: SN. is overvalued based on its PB Ratio (4.2x) compared to the GB Medical Equipment industry average (2.8x).


Next Steps

Future Growth

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

12.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Earnings vs Savings Rate: SN.'s forecast earnings growth (12.5% per year) is above the savings rate (1.2%).

Earnings vs Market: SN.'s earnings (12.5% per year) are forecast to grow faster than the UK market (12.3% per year).

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

Revenue vs Market: SN.'s revenue (4.6% per year) is forecast to grow faster than the UK market (4% per year).

High Growth Revenue: SN.'s revenue (4.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Estimates


Future Return on Equity

High 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


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 (-4.5%).


Return on Equity

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


Return on Assets

ROA vs Industry: SN.'s Return on Assets is below or equal to the Medical Equipment industry average last year.


Return on Capital Employed

ROCE Improving: SN.'s Return on Capital Employed has declined over the past 3 years.


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 1.462070x debt).


Next Steps

Dividend

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

1.75%

Expected Dividend Yield


Dividend Yield vs Market

company1.5%marketbottom25%2.0%markettop25%5.4%industryaverage1.5%forecastin3Years1.7%

Current dividend yield vs market & industry


Dividend Yield and Payments Analysis

Notable Dividend: SN.'s dividend (1.53%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (2%).

High Dividend: SN.'s dividend (1.53%) is low compared to the top 25% of dividend payers in the UK market (5.42%).

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 (36.1% 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?

2.6yrs

Average management tenure


CEO

Namal Nawana (48yo)

1.4yrs

Tenure

US$3,431,398

Compensation

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 ...


CEO Compensation Analysis

Compensation vs. Market: Namal has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the UK market.

Compensation vs Earnings: Insufficient data to compare Namal's compensation with company performance.


Management Age and Tenure

2.6yrs

Average Tenure

51yo

Average Age

Experienced Management: SN.'s management team is considered experienced (2.6 years average tenure).


Board Age and Tenure

2.3yrs

Average Tenure

60yo

Average Age

Experienced Board: SN.'s board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.


Insider Trading

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


Recent Insider Transactions

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$3,43123 Aug 19
Robin Freestone
EntityIndividual
Role
Lead Director
Senior Independent Non-Executive Director
Shares177
Max PriceUS$19.39
BuyUS$57,76723 Aug 19
Roberto Quarta
EntityIndividual
Role
Chairman of the Board
Chairman
Shares2,980
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$5,05923 Aug 19
Roland Diggelmann
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares261
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
SellUS$677,84716 Nov 18
Rodrigo Bianchi
EntityIndividual
Shares48,832
Max PriceUS$13.88
SellUS$1,507,94512 Nov 18
Rodrigo Bianchi
EntityIndividual
Shares108,226
Max PriceUS$13.93

Ownership Breakdown


Management Team

  • Joe Metzger

    Senior Vice President of Marketing Services & Communications

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

    CFO & Executive Director

    • Tenure: 2.5yrs
    • Compensation: US$1.98m
  • Phil Cowdy (52yo)

    Executive VP of Business Development & Corporate Affairs

    • Tenure: 5.8yrs
  • Namal Nawana (48yo)

    CEO & Executive Director

    • Tenure: 1.4yrs
    • Compensation: US$3.43m
  • Mark Gladwell (44yo)

    President of Global Operations

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

    President of Research & Development

    • Tenure: 3.2yrs
  • Elga Lohler (51yo)

    Chief Human Resources Officer

    • Tenure: 3.8yrs
  • Brad Cannon (51yo)

    President of Sports Medicine & ENT

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

    Chief Legal & Compliance Officer

    • Tenure: 2.4yrs
  • Steve Kane

    Head of Human Resources for the US

    • Tenure: 0yrs

Board Members

  • Roberto Quarta (70yo)

    Chairman

    • Tenure: 5.5yrs
    • 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: 7.5yrs
    • Compensation: US$69.50k
  • Marc Owen (60yo)

    Independent Non-Executive Director

    • Tenure: 2yrs
    • Compensation: US$171.78k
  • Angie Risley (61yo)

    Independent Non-Executive Director

    • Tenure: 1.8yrs
    • Compensation: US$83.67k
  • Vinita Bali (64yo)

    Independent Non-Executive Director

    • Tenure: 4.8yrs
    • Compensation: US$171.78k
  • Robin Freestone (60yo)

    Senior Independent Non-Executive Director

    • Tenure: 0.5yrs
    • Compensation: US$89.50k
  • Graham Baker (51yo)

    CFO & Executive Director

    • Tenure: 2.5yrs
    • Compensation: US$1.98m
  • Roland Diggelmann (52yo)

    Independent Non-Executive Director

    • Tenure: 1.6yrs
    • Compensation: US$59.00k
  • Namal Nawana (48yo)

    CEO & Executive Director

    • Tenure: 1.4yrs
    • Compensation: US$3.43m

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£16.237b
  • Shares outstanding: 872.94m
  • 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 Analysis2019/10/13 20:49
End of Day Share Price2019/10/11 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.

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