LSE:UDG

Stock Analysis Report

Executive Summary

UDG Healthcare plc, together with its subsidiaries, provides advisory, communication, commercial, clinical, and packaging services in the Republic of Ireland, the United Kingdom, North America, and internationally.

Rewards

Trading at 13.4% below its fair value

Earnings are forecast to grow 15.36% per year

Earnings grew by 1413.9% over the past year

Pays a reliable dividend of 1.6%

Risk Analysis

Large one-off items impacting financial results



Snowflake Analysis

Flawless balance sheet average dividend payer.


Similar Companies

Cardinal Health

NYSE:CAH

Share Price & News

How has UDG Healthcare's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: UDG has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.6%

UDG

6.5%

GB Healthcare

1.4%

GB Market


1 Year Return

40.7%

UDG

-4.6%

GB Healthcare

12.4%

GB Market

Return vs Industry: UDG exceeded the UK Healthcare industry which returned -6.6% over the past year.

Return vs Market: UDG exceeded the UK Market which returned 12.7% over the past year.


Shareholder returns

UDGIndustryMarket
7 Day3.6%6.5%1.4%
30 Day2.1%7.0%1.8%
90 Day9.5%-11.4%8.8%
1 Year43.2%40.7%-3.1%-4.6%18.3%12.4%
3 Year29.7%23.7%-19.9%-23.4%23.8%8.0%
5 Year118.7%102.5%59.8%50.9%41.8%8.9%

Price Volatility Vs. Market

How volatile is UDG Healthcare's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is UDG Healthcare undervalued compared to its fair value and its price relative to the market?

12.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: UDG (£8.06) is trading below our estimate of fair value (£9.3)

Significantly Below Fair Value: UDG is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: UDG is poor value based on its PE Ratio (45.4x) compared to the Healthcare industry average (24.1x).

PE vs Market: UDG is poor value based on its PE Ratio (45.4x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: UDG is poor value based on its PEG Ratio (3x)


Price to Book Ratio

PB vs Industry: UDG is overvalued based on its PB Ratio (2.9x) compared to the GB Healthcare industry average (1.5x).


Next Steps

Future Growth

How is UDG Healthcare forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

15.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: UDG's forecast earnings growth (15.4% per year) is above the savings rate (0.5%).

Earnings vs Market: UDG's earnings (15.4% per year) are forecast to grow faster than the UK market (11.7% per year).

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

Revenue vs Market: UDG's revenue (5.8% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: UDG's revenue (5.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: UDG's Return on Equity is forecast to be low in 3 years time (8.8%).


Next Steps

Past Performance

How has UDG Healthcare performed over the past 5 years?

-25.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: UDG has a large one-off loss of $40.0M impacting its September 30 2019 financial results.

Growing Profit Margin: UDG's current net profit margins (4.4%) are higher than last year (0.3%).


Past Earnings Growth Analysis

Earnings Trend: UDG's earnings have declined by -25.7% per year over the past 5 years.

Accelerating Growth: UDG's earnings growth over the past year (1413.9%) exceeds its 5-year average (-25.7% per year).

Earnings vs Industry: UDG earnings growth over the past year (1413.9%) exceeded the Healthcare industry 19.8%.


Return on Equity

High ROE: UDG's Return on Equity (6.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is UDG Healthcare's financial position?


Financial Position Analysis

Short Term Liabilities: UDG's short term assets ($549.4M) exceed its short term liabilities ($346.0M).

Long Term Liabilities: UDG's short term assets ($549.4M) exceed its long term liabilities ($312.0M).


Debt to Equity History and Analysis

Debt Level: UDG's debt to equity ratio (26.6%) is considered satisfactory.

Reducing Debt: UDG's debt to equity ratio has reduced from 76.2% to 26.6% over the past 5 years.

Debt Coverage: UDG's debt is well covered by operating cash flow (53.9%).

Interest Coverage: UDG's interest payments on its debt are well covered by EBIT (17.9x coverage).


Balance Sheet

Inventory Level: UDG has a low level of unsold assets or inventory.

Debt Coverage by Assets: UDG's debt is covered by short term assets (assets are 2.3x debt).


Next Steps

Dividend

What is UDG Healthcare's current dividend yield, its reliability and sustainability?

1.59%

Current Dividend Yield


Dividend Yield vs Market

company1.6%marketbottom25%1.8%markettop25%5.0%industryaverage1.7%forecastin3Years1.8%

Current dividend yield vs market & industry

Notable Dividend: UDG's dividend (1.6%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: UDG's dividend (1.6%) is low compared to the top 25% of dividend payers in the UK market (4.95%).


Stability and Growth of Payments

Stable Dividend: UDG's dividends per share have been stable in the past 10 years.

Growing Dividend: UDG's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (72.8%), UDG's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: UDG's dividends in 3 years are forecast to be well covered by earnings (33.2% payout ratio).


Next Steps

Management

What is the CEO of UDG Healthcare's salary, the management and board of directors tenure and is there insider trading?

3.3yrs

Average management tenure


CEO

Brendan McAtamney (56yo)

3.9yrs

Tenure

US$2,165,000

Compensation

Mr. Brendan McAtamney has been the Chief Executive Officer of UDG Healthcare plc since February 2, 2016 and has been an Executive Director since December 16, 2013. Mr. McAtamney has been a Non-Executive Di ...


CEO Compensation Analysis

Compensation vs Market: Brendan's total compensation ($USD2.41M) is about average for companies of similar size in the UK market ($USD2.25M).

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


Management Age and Tenure

3.3yrs

Average Tenure

49yo

Average Age

Experienced Management: UDG's management team is considered experienced (3.3 years average tenure).


Board Age and Tenure

6.1yrs

Average Tenure

60yo

Average Age

Experienced Board: UDG's board of directors are considered experienced (6.1 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUK£44,02504 Feb 19
Erik Van Snippenberg
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares7,500
Max PriceUK£5.87

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Liam Logue

    Executive Vice President of Corporate Development

    • Tenure: 6.3yrs
  • Nigel Clerkin (45yo)

    CFO & Executive Director

    • Tenure: 1.7yrs
    • Compensation: US$987.00k
  • Eimear Kenny (49yo)

    Group Head of Human Resources

    • Brendan McAtamney (56yo)

      CEO & Executive Director

      • Tenure: 3.9yrs
      • Compensation: US$2.17m
    • Eleanor Garvey

      Group Head of Quality & Compliance

      • Keith Byrne

        Head of Investor Relations

        • Damien Moynagh

          General Counsel & Company Secretary

          • Tom Mitchell

            Uk Head of Syndicated Services for Ashfield

            • Tenure: 2.8yrs
          • Rob Wood

            Global President of Advisory Services & Business Development

            • Lucy MacLauchlan-Wharton

              Global Head of Marketing and Communications


              Board Members

              • Linda Wilding (60yo)

                Non-Executive Director

                • Tenure: 6.1yrs
                • Compensation: US$86.00k
              • Peter Gray (64yo)

                Chairman of the Board

                • Tenure: 7.9yrs
                • Compensation: US$212.00k
              • Myles Lee (66yo)

                Senior Independent Director

                • Tenure: 0.7yrs
                • Compensation: US$88.00k
              • Chris Corbin (64yo)

                Non-Executive Director

                • Tenure: 16.6yrs
                • Compensation: US$70.00k
              • Nigel Clerkin (45yo)

                CFO & Executive Director

                • Tenure: 1.7yrs
                • Compensation: US$987.00k
              • Lisa Ricciardi (59yo)

                Non-Executive Director

                • Tenure: 6.6yrs
                • Compensation: US$69.00k
              • Chris Brinsmead (60yo)

                Non–Executive Director

                • Tenure: 9.8yrs
                • Compensation: US$91.00k
              • Brendan McAtamney (56yo)

                CEO & Executive Director

                • Tenure: 3.9yrs
                • Compensation: US$2.17m
              • Nancy Miller-Rich (60yo)

                Non-Executive Director

                • Tenure: 3.6yrs
                • Compensation: US$69.00k
              • Erik Van Snippenberg (55yo)

                Non-Executive Director

                • Tenure: 1.5yrs
                • Compensation: US$70.00k

              Company Information

              UDG Healthcare plc's company bio, employee growth, exchange listings and data sources


              Key Information

              • Name: UDG Healthcare plc
              • Ticker: UDG
              • Exchange: LSE
              • Founded: 1948
              • Industry: Health Care Services
              • Sector: Healthcare
              • Market Cap: UK£2.027b
              • Shares outstanding: 250.19m
              • Website: https://www.udghealthcare.com

              Number of Employees


              Location

              • UDG Healthcare plc
              • UDG Healthcare
              • 20 Riverwalk
              • Dublin
              • Co. Dublin
              • 24
              • Ireland

              Listings

              TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
              UDGLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
              UDHC.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
              UN6ADB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
              UDGLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
              UDRG.YOTCPK (Pink Sheets LLC)ADRUSUSDOct 2008

              Biography

              UDG Healthcare plc, together with its subsidiaries, provides advisory, communication, commercial, clinical, and packaging services in the Republic of Ireland, the United Kingdom, North America, and internationally. The company operates in two segments, Ashfield and Sharp. The Ashfield segment offers commercialization services for the pharmaceutical and healthcare industry in the areas of advisory, communications, and commercial and clinical services. This segment supports healthcare professionals and patients at various stages of the product life cycle; and provides field and contact center sales teams, healthcare communications, patient support, audit, advisory, medical information, and event management services to approximately 300 healthcare companies. The Sharp segment provides contract and clinical trial packaging services for the pharmaceutical and biotechnology industries; serialization solutions; and clinical IRT services. The company was formerly known as United Drug plc and changed its name to UDG Healthcare plc in August 2013. UDG Healthcare plc was founded in 1948 and is based in Dublin, the Republic of Ireland. 


              Company Analysis and Financial Data Status

              All financial data provided by Standard & Poor's Capital IQ.
              DataLast Updated (UTC time)
              Company Analysis2020/01/19 20:46
              End of Day Share Price2020/01/17 00:00
              Earnings2019/09/30
              Annual Earnings2019/09/30


              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.