LSE:SN.

Stock Analysis Report

Executive Summary

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

Rewards

Earnings are forecast to grow 13.67% per year

Pays a reliable dividend of 1.69%

Risk Analysis

No risks detected for SN. from our risk checks.


Snowflake Analysis

Flawless 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

-9.6%

SN.

-8.4%

GB Medical Equipment

-11.3%

GB Market


1 Year Return

20.8%

SN.

22.4%

GB Medical Equipment

-5.0%

GB Market

Return vs Industry: SN. underperformed the UK Medical Equipment industry which returned 22.4% over the past year.

Return vs Market: SN. exceeded the UK Market which returned -5% over the past year.


Shareholder returns

SN.IndustryMarket
7 Day-9.6%-8.4%-11.3%
30 Day-9.3%-7.4%-11.5%
90 Day0.5%1.3%-8.4%
1 Year23.0%20.8%24.6%22.4%0.1%-5.0%
3 Year50.2%42.1%29.3%22.5%4.5%-8.8%
5 Year66.7%52.0%62.7%49.0%20.3%-7.1%

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?

32.37x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SN. (£17.39) is trading above our estimate of fair value (£14.26)

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


Price To Earnings Ratio

PE vs Industry: SN. is poor value based on its PE Ratio (32.4x) compared to the Medical Equipment industry average (31.8x).

PE vs Market: SN. is poor value based on its PE Ratio (32.4x) compared to the UK market (16.3x).


Price to Earnings Growth Ratio

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


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 16 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 (0.5%).

Earnings vs Market: SN.'s earnings (13.7% per year) are forecast to grow slower than the UK market (14.5% per year).

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

Revenue vs Market: SN.'s revenue (4.4% per year) is forecast to grow faster than the UK market (3.8% per year).

High Growth Revenue: SN.'s revenue (4.4% 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 (17.7%).


Next Steps

Past Performance

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

7.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SN. has high quality earnings.

Growing Profit Margin: SN.'s current net profit margins (11.7%) are lower than last year (13.5%).


Past Earnings Growth Analysis

Earnings Trend: SN.'s earnings have grown by 7.9% 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 (-9.5%) over the past year, making it difficult to compare to the Medical Equipment industry average (-5.4%).


Return on Equity

High ROE: SN.'s Return on Equity (11.7%) 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 ($3.2B) exceed its short term liabilities ($1.6B).

Long Term Liabilities: SN.'s short term assets ($3.2B) exceed its long term liabilities ($2.6B).


Debt to Equity History and Analysis

Debt Level: SN.'s debt to equity ratio (36.5%) is considered satisfactory.

Reducing Debt: SN.'s debt to equity ratio has reduced from 41.9% to 36.5% over the past 5 years.

Debt Coverage: SN.'s debt is well covered by operating cash flow (62.2%).

Interest Coverage: SN.'s interest payments on its debt are well covered by EBIT (14.8x 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 1.7x debt).


Next Steps

Dividend

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

1.69%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Smith & Nephew before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company1.7%marketbottom25%2.0%markettop25%5.6%industryaverage1.7%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 (2.05%).

High Dividend: SN.'s dividend (1.69%) is low compared to the top 25% of dividend payers in the UK market (5.63%).


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 (54.7%), 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 (37.2% payout ratio).


Next Steps

Management

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

2.9yrs

Average management tenure


CEO

Roland Diggelmann (52yo)

0.3yrs

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  ...


Leadership Team

NamePositionTenureCompensationOwnership
Roland Diggelmann
Chief Executive Officer0.3yrsUS$59.00k0.00076% $115.4k
Graham Baker
CFO & Executive Director2.8yrsUS$1.98m0.0012% $179.1k
Mark Gladwell
President of Global Operations2.1yrsno datano data
Catheryn O'Rourke
Chief Legal & Compliance Officer2.8yrsno datano data
Joe Metzger
Senior Vice President of Marketing Services & Communications9.1yrsno datano data
Elga Lohler
Chief Human Resources Officer4.2yrsno data0.0065% $985.2k
Philip Cowdy
Chief Business Development & Corporate Affairs Officer6.1yrsno datano data
Bradley Cannon
President of Sports Medicine & ENT2.1yrsno data0.0053% $812.1k
Vasant Padmanabhan
President of Research & Development3.5yrsno datano data
Steve Kane
Head of Human Resources for the US0yrsno datano data

2.9yrs

Average Tenure

51yo

Average Age

Experienced Management: SN.'s management team is considered experienced (2.9 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Graham Baker
CFO & Executive Director2.8yrsUS$1.98m0.0012% $179.1k
Roberto Quarta
Chairman5.8yrsUS$418.70k0.0068% $1.0m
Erik Engstrom
Independent Non-Executive Director5.1yrsUS$69.50k0.0018% $277.8k
Virginia Hilda Brunette Bottomley
Independent Non-Executive Director7.8yrsUS$69.50k0.0022% $335.5k
Marc Owen
Independent Non-Executive Director2.3yrsUS$171.78k0.00086% $130.5k
Angie Risley
Independent Non-Executive Director2.2yrsUS$83.67k0.00052% $78.9k
Vinita Bali
Independent Non-Executive Director5.2yrsUS$171.78k0.00085% $129.0k
Robin Freestone
Senior Independent Non-Executive Director0.8yrsUS$89.50k0.0018% $277.8k

4.0yrs

Average Tenure

60.5yo

Average Age

Experienced Board: SN.'s board of directors are considered experienced (4 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£15.180b
  • Shares outstanding: 872.90m
  • 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)SPDN ADR NEWUSUSDNov 1999
NPWADB (Deutsche Boerse AG)SPDN ADR NEWDEEURNov 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 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 Watford, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/28 21:09
End of Day Share Price2020/02/28 00:00
Earnings2019/12/31
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.