LSE:DPH

Stock Analysis Report

Executive Summary

Dechra Pharmaceuticals PLC develops, manufactures, regulates, markets, and sells veterinary pharmaceuticals and related products for veterinarians worldwide.

Rewards

Trading at 3% below its fair value

Earnings are forecast to grow 23.22% per year

Risk Analysis

Has a high level of debt

Large one-off items impacting financial results

Shareholders have been diluted in the past year



Snowflake Analysis

High growth potential with mediocre balance sheet.


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Share Price & News

How has Dechra Pharmaceuticals's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

-8.2%

DPH

0.6%

GB Pharmaceuticals

0.3%

GB Market


1 Year Return

14.8%

DPH

29.6%

GB Pharmaceuticals

13.1%

GB Market

Return vs Industry: DPH underperformed the UK Pharmaceuticals industry which returned 31.8% over the past year.

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


Shareholder returns

DPHIndustryMarket
7 Day-8.2%0.6%0.3%
30 Day-0.5%2.8%1.5%
90 Day6.9%11.6%7.8%
1 Year16.3%14.8%34.8%29.6%19.1%13.1%
3 Year101.9%95.0%56.3%37.1%22.5%6.8%
5 Year252.5%229.7%74.8%38.8%41.2%8.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Dechra Pharmaceuticals undervalued compared to its fair value and its price relative to the market?

3.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: DPH (£28.06) is trading below our estimate of fair value (£28.93)

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


Price To Earnings Ratio

PE vs Industry: DPH is poor value based on its PE Ratio (101.4x) compared to the Pharmaceuticals industry average (20.2x).

PE vs Market: DPH is poor value based on its PE Ratio (101.4x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: DPH is poor value based on its PEG Ratio (4.4x)


Price to Book Ratio

PB vs Industry: DPH is overvalued based on its PB Ratio (6.1x) compared to the GB Pharmaceuticals industry average (3x).


Next Steps

Future Growth

How is Dechra Pharmaceuticals forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

22.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DPH's forecast earnings growth (23.2% per year) is above the savings rate (0.5%).

Earnings vs Market: DPH's earnings (23.2% per year) are forecast to grow faster than the UK market (11.7% per year).

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

Revenue vs Market: DPH's revenue (7.2% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: DPH's revenue (7.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: DPH's Return on Equity is forecast to be high in 3 years time (24.3%)


Next Steps

Past Performance

How has Dechra Pharmaceuticals performed over the past 5 years?

13.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DPH has a large one-off loss of £12.6M impacting its June 30 2019 financial results.

Growing Profit Margin: DPH's current net profit margins (6.4%) are lower than last year (8.9%).


Past Earnings Growth Analysis

Earnings Trend: DPH's earnings have grown by 13.8% per year over the past 5 years.

Accelerating Growth: DPH's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: DPH had negative earnings growth (-14.4%) over the past year, making it difficult to compare to the Pharmaceuticals industry average (2.2%).


Return on Equity

High ROE: DPH's Return on Equity (6.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Dechra Pharmaceuticals's financial position?


Financial Position Analysis

Short Term Liabilities: DPH's short term assets (£292.1M) exceed its short term liabilities (£118.1M).

Long Term Liabilities: DPH's short term assets (£292.1M) do not cover its long term liabilities (£421.3M).


Debt to Equity History and Analysis

Debt Level: DPH's debt to equity ratio (60.5%) is considered high.

Reducing Debt: DPH's debt to equity ratio has increased from 15.5% to 60.5% over the past 5 years.

Debt Coverage: DPH's debt is well covered by operating cash flow (26.5%).

Interest Coverage: DPH's interest payments on its debt are well covered by EBIT (4.8x coverage).


Balance Sheet

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

Debt Coverage by Assets: DPH's debt is not covered by short term assets (assets are 0.9x debt).


Next Steps

Dividend

What is Dechra Pharmaceuticals's current dividend yield, its reliability and sustainability?

1.13%

Current Dividend Yield


Dividend Yield vs Market

company1.1%marketbottom25%1.8%markettop25%5.0%industryaverage3.5%forecastin3Years1.3%

Current dividend yield vs market & industry

Notable Dividend: DPH's dividend (1.03%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: DPH's dividend (1.03%) is low compared to the top 25% of dividend payers in the UK market (4.95%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (104.8%), DPH's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: DPH's dividends in 3 years are forecast to be well covered by earnings (33.9% payout ratio).


Next Steps

Management

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

5.1yrs

Average management tenure


CEO

Ian Page (58yo)

18.2yrs

Tenure

UK£2,974,000

Compensation

Mr. Ian D. Page has been the Chief Executive Officer and Managing Director of Dechra Pharmaceuticals Plc since November 2001 and 1998 respectively and also serves as its Executive Director since 1997. Mr.  ...


CEO Compensation Analysis

Compensation vs Market: Ian's total compensation ($USD3.87M) is above average for companies of similar size in the UK market ($USD2.25M).

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


Management Age and Tenure

5.1yrs

Average Tenure

52.5yo

Average Age

Experienced Management: DPH's management team is seasoned and experienced (5.1 years average tenure).


Board Age and Tenure

4.8yrs

Average Tenure

58.5yo

Average Age

Experienced Board: DPH's board of directors are considered experienced (4.8 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

SellUK£581,99418 Sep 19
William Rice
EntityIndividual
Role
Chairman of the Board
Non-Executive Chairman
Shares20,000
Max PriceUK£29.10
SellUK£5,833,90018 Sep 19
Ian Page
EntityIndividual
Role
Chief Executive Officer
CEO, MD & Executive Director
Shares200,000
Max PriceUK£29.17

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 5.7%.


Management Team

  • Ian Page (58yo)

    CEO, MD & Executive Director

    • Tenure: 18.2yrs
    • Compensation: UK£2.97m
  • Mike Eldred (49yo)

    President of North America

    • Katy Clough

      Group HR Director

      • Paul Sandland (40yo)

        CFO & Executive Director

        • Tenure: 0.3yrs
      • Tony Griffin (56yo)

        MD of Dechra Veterinary Products for Europe & Executive Director

        • Tenure: 7.2yrs
        • Compensation: UK£1.14m
      • Melanie Hall

        Company Secretary

        • Tenure: 2.6yrs

      Board Members

      • Ishbel Jean Macpherson (59yo)

        Senior Independent Non-Executive Director

        • Tenure: 6.3yrs
        • Compensation: UK£63.00k
      • Tony Rice (67yo)

        Non-Executive Chairman

        • Tenure: 3.3yrs
        • Compensation: UK£131.00k
      • Ian Page (58yo)

        CEO, MD & Executive Director

        • Tenure: 18.2yrs
        • Compensation: UK£2.97m
      • Paul Sandland (40yo)

        CFO & Executive Director

        • Tenure: 0.3yrs
      • Tony Griffin (56yo)

        MD of Dechra Veterinary Products for Europe & Executive Director

        • Tenure: 7.2yrs
        • Compensation: UK£1.14m
      • Lawson MacArtney (62yo)

        Non-Executive Director

        • Tenure: 3.1yrs
        • Compensation: UK£50.00k
      • Julian Heslop (65yo)

        Non Executive Director

        • Tenure: 7yrs
        • Compensation: UK£60.00k
      • Lisa Morrison (51yo)

        Non-Executive Director

        • Tenure: 0.9yrs
        • Compensation: UK£23.00k

      Company Information

      Dechra Pharmaceuticals PLC's company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: Dechra Pharmaceuticals PLC
      • Ticker: DPH
      • Exchange: LSE
      • Founded: 1997
      • Industry: Pharmaceuticals
      • Sector: Pharmaceuticals & Biotech
      • Market Cap: UK£2.877b
      • Shares outstanding: 102.54m
      • Website: https://www.dechra.com

      Number of Employees


      Location

      • Dechra Pharmaceuticals PLC
      • 24 Cheshire Avenue
      • Cheshire Business Park
      • Northwich
      • Cheshire
      • CW9 7UA
      • United Kingdom

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      DPHLSE (London Stock Exchange)YesOrdinary SharesGBGBPSep 2000
      DCHP.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDSep 2000
      DPHLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPSep 2000
      1PKDB (Deutsche Boerse AG)YesOrdinary SharesDEEURSep 2000
      DPH NBMV (Bolsa Mexicana de Valores)YesOrdinary SharesMXMXNSep 2000
      DPHA.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDMay 2012

      Biography

      Dechra Pharmaceuticals PLC develops, manufactures, regulates, markets, and sells veterinary pharmaceuticals and related products for veterinarians worldwide. It operates through three segments: European Pharmaceuticals, North American Pharmaceuticals, and Pharmaceuticals Research and Development. The company offers various endocrinology, dermatology, analgesia and anesthesia, cardiovascular, and critical care products for dogs and cats; water soluble antibiotics, poultry vaccines, locomotion, and pain management for poultry, pigs, and cattle; and lameness and pain management products for horses and ponies. It also provides pet nutrition products for supporting cats and dogs with various therapeutic conditions, such as allergies, obesity, heart, and kidney diseases. In addition, the company distributes veterinary pharmaceuticals and equipment; offers financial services; markets pet diets; and develops, regulates, manufactures, and markets crop protection. It markets its products through wholesaler and distributor networks. The company was incorporated in 1997 and is headquartered in Northwich, the United Kingdom. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/16 20:34
      End of Day Share Price2020/01/16 00:00
      Earnings2019/06/30
      Annual Earnings2019/06/30


      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.