LSE:OMU

Stock Analysis Report

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Executive Summary

Old Mutual Limited provides financial services to retail and corporate customers in South Africa and the rest of Africa, and Asia.


Snowflake Analysis

Excellent balance sheet, good value and pays a dividend.


Similar Companies

Share Price & News

How has Old Mutual's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: OMU's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-11.4%

OMU

4.2%

GB Insurance

2.5%

GB Market


1 Year Return

-55.9%

OMU

-27.9%

GB Insurance

-12.4%

GB Market

Return vs Industry: OMU underperformed the UK Insurance industry which returned -26.5% over the past year.

Return vs Market: OMU underperformed the UK Market which returned -11.7% over the past year.


Shareholder returns

OMUIndustryMarket
7 Day-11.4%4.2%2.5%
30 Day-11.4%-5.9%2.8%
90 Day-34.5%-19.0%-7.2%
1 Year-51.4%-55.9%-20.5%-27.9%-8.2%-12.4%
3 Yearn/a-22.5%-35.9%-5.9%-17.5%
5 Yearn/a-6.4%-30.2%12.5%-12.9%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

Is Old Mutual undervalued compared to its fair value and its price relative to the market?

5.45x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: OMU (£0.5) is trading above our estimate of fair value (£0.14)

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


Price To Earnings Ratio

PE vs Industry: OMU is good value based on its PE Ratio (5.5x) compared to the Insurance industry average (11.5x).

PE vs Market: OMU is good value based on its PE Ratio (5.5x) compared to the UK market (14.7x).


Price to Earnings Growth Ratio

PEG Ratio: OMU is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: OMU is good value based on its PB Ratio (0.7x) compared to the GB Insurance industry average (1.2x).


Next Steps

Future Growth

How is Old Mutual forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

11.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: OMU's forecast earnings growth (11% per year) is above the savings rate (1.2%).

Earnings vs Market: OMU's earnings (11% per year) are forecast to grow slower than the UK market (20.3% per year).

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

Revenue vs Market: OMU's revenue is expected to decline over the next 3 years (-37.8% per year).

High Growth Revenue: OMU's revenue is forecast to decline over the next 3 years (-37.8% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: OMU's Return on Equity is forecast to be low in 3 years time (9.9%).


Next Steps

Past Performance

How has Old Mutual performed over the past 5 years?

-32.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: OMU has high quality earnings.

Growing Profit Margin: OMU became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: OMU's earnings have declined by -32% per year over the past 5 years.

Accelerating Growth: OMU has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: OMU has become profitable in the last year, making it difficult to compare its past year earnings growth to the Insurance industry (3.1%).


Return on Equity

High ROE: OMU's Return on Equity (12.3%) is considered low.


Next Steps

Financial Health

How is Old Mutual's financial position?


Financial Position Analysis

Short Term Liabilities: OMU's short term assets (ZAR136.6B) exceed its short term liabilities (ZAR101.6B).

Long Term Liabilities: OMU's short term assets (ZAR136.6B) do not cover its long term liabilities (ZAR731.4B).


Debt to Equity History and Analysis

Debt Level: OMU's debt to equity ratio (36.7%) is considered satisfactory.

Reducing Debt: OMU's debt to equity ratio has reduced from 42.9% to 36.7% over the past 5 years.

Debt Coverage: OMU's debt is well covered by operating cash flow (42.3%).

Interest Coverage: OMU's interest payments on its debt are well covered by EBIT (14x coverage).


Balance Sheet


Next Steps

Dividend

What is Old Mutual's current dividend yield, its reliability and sustainability?

10.69%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: OMU's dividend (10.69%) is higher than the bottom 25% of dividend payers in the UK market (2.04%).

High Dividend: OMU's dividend (10.69%) is in the top 25% of dividend payers in the UK market (5.73%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, OMU has been paying a dividend for less than 10 years.

Growing Dividend: OMU's dividend payments have increased, but the company has only paid a dividend for 2 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (58.3%), OMU's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: OMU's dividends in 3 years are forecast to be covered by earnings (55.5% payout ratio).


Next Steps

Management

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

1.2yrs

Average management tenure


CEO

Iain Williamson (49yo)

1

Tenure

R9,156,000

Compensation

Mr. Iain George Williamson serves as Interim Chief Executive Officer at Old Mutual Life Assurance since May 24, 2019 and serves as its Executive Director since May 27, 2019. He served as Acting Chief Execu ...


CEO Compensation Analysis

Compensation vs Market: Iain's total compensation ($USD524.97K) is below average for companies of similar size in the UK market ($USD2.38M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Iain Williamson
Interim CEO & Director1yrR9.16mno data
Casparus Troskie
CFO & Executive Director2.17yrsR8.79mno data
Heloise Van Der Mescht
Acting Chief Operating Officer0.92yrR4.46mno data
Clement Chinaka
Managing Director of Rest of Africano dataR6.19mno data
Clarence Nethengwe
Managing Director of Mass & Foundation Clusterno dataR5.94mno data
Gcinikhaya Gobodo
Managing Director of Old Mutual Investment Group Holdings0.17yrR15.68mno data
Prabashini Moodley
Managing Director of Old Mutual Corporate1.33yrsR1.94mno data
Garth Napier
Managing Director of Old Mutual Insure1.5yrsR6.60mno data
Sizwe Ndlovu
Head of Investor Relationsno datano datano data
Tabby Tsengiwe
Head of Communicationsno datano datano data

1.2yrs

Average Tenure

48yo

Average Age

Experienced Management: OMU's management team is not considered experienced ( 1.2 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Iain Williamson
Interim CEO & Director1yrR9.16mno data
Casparus Troskie
CFO & Executive Director2.17yrsR8.79mno data
Paul Baloyi
Non-Executive Director2.17yrsR1.36mno data
Matthys du Toit
Independent Non-Executive Director2.17yrsR1.24mno data
Bahleli Rapiya
Non Executive Director2.17yrsR1.21mno data
Peter de Beyer
Lead Independent Director0.17yrR2.71mno data
Itumeleng Kgaboesele
Independent Non-Executive Director2.17yrsR1.41mno data
Carol Winifred Molope
Independent Non-Executive Director2.17yrsR1.91mno data
Trevor Manuel
Independent Chairperson of the Boardno dataR5.03mno data
John Lister
Independent Non-Executive Director2.17yrsR4.08mno data

2.2yrs

Average Tenure

59.5yo

Average Age

Experienced Board: OMU's board of directors are not considered experienced ( 2.2 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.


Ownership Breakdown

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


Top Shareholders

Company Information

Old Mutual Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Old Mutual Limited
  • Ticker: OMU
  • Exchange: LSE
  • Founded: 1845
  • Industry: Life and Health Insurance
  • Sector: Insurance
  • Market Cap: R52.877b
  • Listing Market Cap: R2.461b
  • Shares outstanding: 4.71b
  • Website: https://www.oldmutual.com

Number of Employees


Location

  • Old Mutual Limited
  • Mutualpark
  • Jan Smuts Drive
  • Cape Town
  • Western Cape
  • 7405
  • South Africa

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
OMUJSE (The Johannesburg Securities Exchange)YesOrdinary SharesZAZARJun 2018
OMMNMSE (Namibian Stock Exchange)YesOrdinary SharesNAZARJun 2018
OMUZMSE (Zimbabwe Stock Exchange)YesOrdinary SharesZWZWLJun 2018
OMUMAL (Malawi Stock Exchange)YesOrdinary SharesMWMWKJun 2018
OMULSE (London Stock Exchange)YesOrdinary SharesGBGBPJun 2018
ODMU.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJun 2018
OMULBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJun 2018

Biography

Old Mutual Limited provides financial services to retail and corporate customers in South Africa and the rest of Africa, and Asia. The company offers life and savings, property and casualty insurance, asset management, and banking and lending products and services. It distributes its products through independent advisers, branches, bancassurance, direct and digital channels, and worksites. Old Mutual Limited was founded in 1845 and is headquartered in Cape Town, South Africa. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/05/30 01:47
End of Day Share Price2020/05/29 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.