LSE:JMAT

Stock Analysis Report

Executive Summary

Johnson Matthey Plc provides specialty chemicals in North America, Europe, China, rest of Asia, and internationally.

Rewards

PE ratio (14.6x) is below the UK market (18.5x)

Earnings are forecast to grow 9.35% per year

Earnings grew by 15.6% over the past year

Pays a high and reliable dividend of 2.92%

Risk Analysis

Debt is not well covered by operating cash flow



Snowflake Analysis

Established dividend payer with adequate balance sheet.


Similar Companies

Synthomer

LSE:SYNT

Share Price & News

How has Johnson Matthey's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

-3.4%

JMAT

-0.7%

GB Chemicals

-0.5%

GB Market


1 Year Return

-6.9%

JMAT

-8.5%

GB Chemicals

12.4%

GB Market

Return vs Industry: JMAT exceeded the UK Chemicals industry which returned -8% over the past year.

Return vs Market: JMAT underperformed the UK Market which returned 12.7% over the past year.


Shareholder returns

JMATIndustryMarket
7 Day-3.4%-0.7%-0.5%
30 Day-9.0%-3.6%0.2%
90 Day-8.7%2.2%6.0%
1 Year-4.3%-6.9%-4.8%-8.5%18.3%12.4%
3 Year-6.6%-13.6%7.4%-2.1%22.6%6.9%
5 Year-6.0%-21.8%19.1%-0.09%40.9%8.3%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Johnson Matthey undervalued compared to its fair value and its price relative to the market?

13.99x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: JMAT (£29.31) is trading above our estimate of fair value (£24.29)

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


Price To Earnings Ratio

PE vs Industry: JMAT is good value based on its PE Ratio (14.6x) compared to the Chemicals industry average (22.7x).

PE vs Market: JMAT is good value based on its PE Ratio (14.6x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: JMAT is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: JMAT is good value based on its PB Ratio (2.1x) compared to the GB Chemicals industry average (2.2x).


Next Steps

Future Growth

How is Johnson Matthey forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

9.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: JMAT's forecast earnings growth (9.3% per year) is above the savings rate (0.5%).

Earnings vs Market: JMAT's earnings (9.3% per year) are forecast to grow slower than the UK market (11.7% per year).

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

Revenue vs Market: JMAT's revenue is expected to decline over the next 3 years (-2.7% per year).

High Growth Revenue: JMAT's revenue is forecast to decline over the next 3 years (-2.7% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: JMAT's Return on Equity is forecast to be low in 3 years time (16.3%).


Next Steps

Past Performance

How has Johnson Matthey performed over the past 5 years?

-2.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: JMAT has high quality earnings.

Growing Profit Margin: JMAT's current net profit margins (3.1%) are lower than last year (3.8%).


Past Earnings Growth Analysis

Earnings Trend: JMAT's earnings have declined by -2.4% per year over the past 5 years.

Accelerating Growth: JMAT's earnings growth over the past year (15.6%) exceeds its 5-year average (-2.4% per year).

Earnings vs Industry: JMAT earnings growth over the past year (15.6%) exceeded the Chemicals industry -3.6%.


Return on Equity

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


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Johnson Matthey's financial position?


Financial Position Analysis

Short Term Liabilities: JMAT's short term assets (£3.6B) exceed its short term liabilities (£2.3B).

Long Term Liabilities: JMAT's short term assets (£3.6B) exceed its long term liabilities (£1.4B).


Debt to Equity History and Analysis

Debt Level: JMAT's debt to equity ratio (56.4%) is considered high.

Reducing Debt: JMAT's debt to equity ratio has reduced from 59.4% to 56.4% over the past 5 years.

Debt Coverage: JMAT's debt is not well covered by operating cash flow (17.1%).

Interest Coverage: JMAT's interest payments on its debt are well covered by EBIT (9x coverage).


Balance Sheet

Inventory Level: JMAT has a high level of physical assets or inventory.

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


Next Steps

Dividend

What is Johnson Matthey's current dividend yield, its reliability and sustainability?

3.05%

Current Dividend Yield


Dividend Yield vs Market

company3.1%marketbottom25%1.8%markettop25%5.0%industryaverage2.7%forecastin3Years3.3%

Current dividend yield vs market & industry

Notable Dividend: JMAT's dividend (2.92%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: JMAT's dividend (2.92%) is low compared to the top 25% of dividend payers in the UK market (4.95%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (43.3%), JMAT's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: JMAT's dividends in 3 years are forecast to be well covered by earnings (35.1% payout ratio).


Next Steps

Management

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

5.9yrs

Average management tenure


CEO

Robert MacLeod (55yo)

5.6yrs

Tenure

UK£2,784,000

Compensation

Mr. Robert J. MacLeod has been the Chief Executive of Johnson Matthey Plc since June 5, 2014 and its Executive Director since June 22, 2014. Mr. MacLeod joined Johnson Matthey plc in 2009 and served as its ...


CEO Compensation Analysis

Compensation vs Market: Robert's total compensation ($USD3.62M) is about average for companies of similar size in the UK market ($USD3.42M).

Compensation vs Earnings: Robert's compensation has increased by more than 20% in the past year.


Management Age and Tenure

5.9yrs

Average Tenure

52yo

Average Age

Experienced Management: JMAT's management team is seasoned and experienced (5.9 years average tenure).


Board Age and Tenure

3.1yrs

Average Tenure

59.5yo

Average Age

Experienced Board: JMAT's board of directors are considered experienced (3.1 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyUK£149,18425 Nov 19
Robert MacLeod
EntityIndividual
Role
Chief Executive Officer
CEO & Executive Director
Shares5,250
Max PriceUK£28.42

Ownership Breakdown

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


Management Team

  • M. Bedford

    Managing Director of Precious Metals

    • Simon Farrant

      General Counsel & Company Secretary

      • Tenure: 13yrs
    • John Walker

      Executive Director

      • Tenure: 6.3yrs
      • Compensation: UK£1.50m
    • Robert MacLeod (55yo)

      CEO & Executive Director

      • Tenure: 5.6yrs
      • Compensation: UK£2.78m
    • A. Hurst

      Managing Director of Tracerco - Environmental Technologies

      • G. McGregor

        Managing Director of Oil & Gas

        • Tenure: 9.2yrs
      • Anna Manz (46yo)

        CFO & Executive Director

        • Tenure: 3.3yrs
        • Compensation: UK£1.63m
      • Annette Kelleher (52yo)

        Chief Human Resource Officer

        • Sally Jones

          Director of Corporate Communications

          • Alexandra French

            Sales and Marketing Director

            • Tenure: 4.3yrs

          Board Members

          • John Walker

            Executive Director

            • Tenure: 6.3yrs
            • Compensation: UK£1.50m
          • Patrick Thomas (62yo)

            Chairman of the Board

            • Tenure: 1.5yrs
            • Compensation: UK£256.00k
          • Alan Ferguson (61yo)

            Senior Independent Director

            • Tenure: 5.5yrs
            • Compensation: UK£93.00k
          • Chris Mottershead (63yo)

            Non-Executive Director

            • Tenure: 5yrs
            • Compensation: UK£89.00k
          • Robert MacLeod (55yo)

            CEO & Executive Director

            • Tenure: 5.6yrs
            • Compensation: UK£2.78m
          • Doug Webb (58yo)

            Non-Executive Director

            • Tenure: 0.3yrs
          • John O'Higgins (55yo)

            Non-Executive Director

            • Tenure: 2.2yrs
            • Compensation: UK£65.00k
          • Xiaozhi Liu (63yo)

            Non-Executive Director

            • Tenure: 0.8yrs
          • Anna Manz (46yo)

            CFO & Executive Director

            • Tenure: 3.3yrs
            • Compensation: UK£1.63m
          • Jane Griffiths

            Non-Executive Director

            • Tenure: 3yrs
            • Compensation: UK£65.00k

          Company Information

          Johnson Matthey Plc's company bio, employee growth, exchange listings and data sources


          Key Information

          • Name: Johnson Matthey Plc
          • Ticker: JMAT
          • Exchange: LSE
          • Founded: 1817
          • Industry: Specialty Chemicals
          • Sector: Materials
          • Market Cap: UK£5.382b
          • Shares outstanding: 192.09m
          • Website: https://www.matthey.com

          Number of Employees


          Location

          • Johnson Matthey Plc
          • 25 Farringdon Street
          • 5th Floor
          • London
          • Greater London
          • EC4A 4AB
          • United Kingdom

          Listings

          TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
          JMPL.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
          JMT2DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
          JMATLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
          JMATLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
          JMAT NBMV (Bolsa Mexicana de Valores)YesOrdinary SharesMXMXNJan 1992
          JMPL.YOTCPK (Pink Sheets LLC)SPON ADRUSUSDDec 1998

          Biography

          Johnson Matthey Plc provides specialty chemicals in North America, Europe, China, rest of Asia, and internationally. It operates through Clean Air, Efficient Natural Resources, Health, and New Markets segments. The Clean Air segment provides catalysts for gasoline and diesel light duty vehicles; and catalyst systems for diesel powered trucks, buses, and stationary equipment. This segment serves car companies, heavy duty truck and engine manufacturers, Chinese producers, and others. The Efficient Natural Resources segment manufactures specialty catalysts and additives, as well as licenses process technology and delivers services to the oil and gas industry; refines, recycles, markets, and distributes platinum group metals (pgms); fabricates products using precious metals and related materials; provides pgm chemicals, and precious metal pastes and enamels. This segment serves chemical, oil, and gas companies; engineering contractors; industrial pgm users; end of life auto catalyst collectors; and automotive industry suppliers. The Health segment develops and manufactures active pharmaceutical ingredients for various treatments; provides complex solutions for generic and innovator companies; and operates in the outsourced small molecule API market. The New Markets segment offers battery materials, battery systems, and fuel cell technologies; and provides science and technology to develop the products for devices used in medical procedures, as well as offers catalysts to pharmaceutical and agricultural chemicals markets. This segment serves automotive and heavy duty vehicle companies; lithium ion cell manufacturers; fuel cell manufacturers; cordless tool and transport manufacturers; medical device companies; and pharmaceutical, fine chemical, and agrochemical companies. The company was formerly known as Johnson & Cock and changed its name to Johnson Matthey Plc in 1851. Johnson Matthey Plc was founded in 1817 and is based in London, the United Kingdom. 


          Company Analysis and Financial Data Status

          All financial data provided by Standard & Poor's Capital IQ.
          DataLast Updated (UTC time)
          Company Analysis2020/01/22 20:40
          End of Day Share Price2020/01/22 00:00
          Earnings2019/09/30
          Annual Earnings2019/03/31


          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.