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 with reasonable growth potential.


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

-1.8%

SN.

-1.0%

GB Medical Equipment

0.4%

GB Market


1 Year Return

-19.6%

SN.

-12.5%

GB Medical Equipment

-13.8%

GB Market

Return vs Industry: SN. underperformed the UK Medical Equipment industry which returned -12.5% over the past year.

Return vs Market: SN. underperformed the UK Market which returned -13.8% over the past year.


Shareholder returns

SN.IndustryMarket
7 Day-1.8%-1.0%0.4%
30 Day1.2%-0.2%-0.3%
90 Day-5.6%-5.6%-1.7%
1 Year-18.0%-19.6%-10.8%-12.5%-10.4%-13.8%
3 Year24.1%17.1%10.8%4.4%-4.3%-15.8%
5 Year44.4%31.3%44.5%32.3%22.8%-4.6%

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?

44.52x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SN. (£15.43) is trading above our estimate of fair value (£13.72)

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 (44.5x) compared to the GB Medical Equipment industry average (36.1x).

PE vs Market: SN. is poor value based on its PE Ratio (44.5x) compared to the UK market (17.7x).


Price to Earnings Growth Ratio

PEG Ratio: SN. is poor value based on its PEG Ratio (1.8x)


Price to Book Ratio

PB vs Industry: SN. is overvalued based on its PB Ratio (3.5x) compared to the GB Medical Equipment industry average (3.2x).


Next Steps

Future Growth

How is Smith & Nephew forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

24.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SN.'s forecast earnings growth (24.9% per year) is above the savings rate (1.2%).

Earnings vs Market: SN.'s earnings (24.9% per year) are forecast to grow faster than the UK market (23.9% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: SN.'s revenue (7.5% per year) is forecast to grow faster than the UK market (6.3% per year).

High Growth Revenue: SN.'s revenue (7.5% 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 (15.3%).


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 $142.0M impacting its June 27 2020 financial results.

Growing Profit Margin: SN.'s current net profit margins (8.3%) are lower than last year (14.1%).


Past Earnings Growth Analysis

Earnings Trend: SN.'s earnings have grown 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 (-44%) over the past year, making it difficult to compare to the Medical Equipment industry average (-32.9%).


Return on Equity

High ROE: SN.'s Return on Equity (7.9%) 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 ($3.3B) exceed its short term liabilities ($1.5B).

Long Term Liabilities: SN.'s short term assets ($3.3B) exceed its long term liabilities ($3.1B).


Debt to Equity History and Analysis

Debt Level: SN.'s debt to equity ratio (49.2%) is considered high.

Reducing Debt: SN.'s debt to equity ratio has increased from 39.2% to 49.2% over the past 5 years.

Debt Coverage: SN.'s debt is well covered by operating cash flow (32.4%).

Interest Coverage: SN.'s interest payments on its debt are well covered by EBIT (10.4x coverage).


Balance Sheet


Next Steps

Dividend

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

1.88%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: SN.'s dividend (1.88%) is higher than the bottom 25% of dividend payers in the UK market (1.86%).

High Dividend: SN.'s dividend (1.88%) is low compared to the top 25% of dividend payers in the UK market (5.15%).


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: At its current payout ratio (83.5%), SN.'s 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 (36.4% payout ratio).


Next Steps

Management

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

3.0yrs

Average management tenure


CEO

Roland Diggelmann (53 yo)

0.83

Tenure

US$1,485,559

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 ...


CEO Compensation Analysis

Compensation vs Market: Roland's total compensation ($USD1.49M) is below average for companies of similar size in the UK market ($USD4.90M).

Compensation vs Earnings: Roland's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Roland Diggelmann
Chief Executive Officer0.83yrUS$1.49m0.0021%
$ 280.4k
Anne-Francoise Nesmes
CFO & Executive Director0.17yrno datano data
Mark Gladwell
President of Global Operations and Global Business Services2.67yrsno data0.00018%
$ 24.3k
Andrew Swift
Vice President of Investor Relationsno datano datano data
Catheryn O'Rourke
Chief Legal & Compliance Officer3.33yrsno data0.0071%
$ 954.4k
Joe Metzger
Senior Vice President of Marketing Services & Communications9.67yrsno datano data
Elga Lohler
Chief Human Resources Officer4.75yrsno data0.0082%
$ 1.1m
Philip Cowdy
Chief Business Development & Corporate Affairs Officer6.67yrsno data0.0036%
$ 478.6k
Bradley Cannon
President of Sports Medicine & ENT2.67yrsno data0.0074%
$ 996.2k
Vasant Padmanabhan
President of Research & Development4.08yrsno datano data
Steve Kane
Head of Human Resources for the USno datano datano data
Melissa Guerdan
Chief Quality & Regulatory Affairs Officer2.17yrsno data0.00015%
$ 20.2k

3.0yrs

Average Tenure

52yo

Average Age

Experienced Management: SN.'s management team is considered experienced (3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Anne-Francoise Nesmes
CFO & Executive Director0.17yrno datano data
Roberto Quarta
Chairman6.42yrsUS$420.24k0.0086%
$ 1.2m
Erik Engstrom
Independent Non-Executive Director5.67yrsUS$73.00k0.0019%
$ 249.4k
Virginia Hilda Brunette Bottomley
Independent Non-Executive Director8.42yrsUS$73.00k0.0022%
$ 300.6k
Marc Owen
Independent Non-Executive Director2.92yrsUS$196.82k0.00089%
$ 120.0k
Angie Risley
Independent Non-Executive Director3yrsUS$89.50k0.00055%
$ 74.1k
C. Richard Medlock
Non-Executive Director0.42yrno data0.000030%
$ 4.0k
Vinita Bali
Independent Non-Executive Director5.75yrsUS$178.78k0.00088%
$ 118.6k
Robin Freestone
Senior Independent Non-Executive Director1.42yrsUS$93.00k0.0019%
$ 249.4k
Robert White
Independent Non-Executive Director0.33yrno data0.00072%
$ 97.1k

3.0yrs

Average Tenure

61yo

Average Age

Experienced Board: SN.'s board of directors are not considered experienced ( 3 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: 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£13.481b
  • Shares outstanding: 873.95m
  • 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 Analysis2020/09/19 03:31
End of Day Share Price2020/09/18 00:00
Earnings2020/06/27
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.