LSE:HIK

Stock Analysis Report

Executive Summary

Hikma Pharmaceuticals PLC develops, manufactures, and markets a range of generic, branded, and in-licensed pharmaceutical products.


Snowflake Analysis

Flawless balance sheet, good value and pays a dividend.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-6.4%

HIK

-2.8%

GB Pharmaceuticals

-5.4%

GB Market


1 Year Return

11.0%

HIK

12.9%

GB Pharmaceuticals

2.0%

GB Market

Return vs Industry: HIK matched the UK Pharmaceuticals industry which returned 10.7% over the past year.

Return vs Market: HIK exceeded the UK Market which returned 1.4% over the past year.


Shareholder returns

HIKIndustryMarket
7 Day-6.4%-2.8%-5.4%
30 Day-5.9%-4.5%-4.2%
90 Day-5.7%-4.0%-2.6%
1 Year12.9%11.0%17.3%12.9%7.6%2.0%
3 Year-11.5%-16.0%35.3%20.2%11.4%-2.7%
5 Year-20.0%-25.6%60.5%28.9%29.0%-0.6%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

21.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HIK (£18.26) is trading below our estimate of fair value (£23.19)

Significantly Below Fair Value: HIK is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: HIK is good value based on its PE Ratio (15.9x) compared to the Pharmaceuticals industry average (20.4x).

PE vs Market: HIK is good value based on its PE Ratio (15.9x) compared to the UK market (17.7x).


Price to Earnings Growth Ratio

PEG Ratio: HIK is poor value based on its PEG Ratio (3.6x)


Price to Book Ratio

PB vs Industry: HIK is overvalued based on its PB Ratio (3.1x) compared to the GB Pharmaceuticals industry average (3x).


Next Steps

Future Growth

How is Hikma Pharmaceuticals forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

4.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HIK's forecast earnings growth (4.4% per year) is above the savings rate (0.5%).

Earnings vs Market: HIK's earnings (4.4% per year) are forecast to grow slower than the UK market (13% per year).

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

Revenue vs Market: HIK's revenue (4.8% per year) is forecast to grow faster than the UK market (3.8% per year).

High Growth Revenue: HIK's revenue (4.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HIK's Return on Equity is forecast to be low in 3 years time (16.2%).


Next Steps

Past Performance

How has Hikma Pharmaceuticals performed over the past 5 years?

-32.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HIK has high quality earnings.

Growing Profit Margin: HIK became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: HIK's earnings have declined by -32.2% per year over the past 5 years.

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

Earnings vs Industry: HIK has become profitable in the last year, making it difficult to compare its past year earnings growth to the Pharmaceuticals industry (2.2%).


Return on Equity

High ROE: HIK's Return on Equity (19.6%) is considered low.


Next Steps

Financial Health

How is Hikma Pharmaceuticals's financial position?


Financial Position Analysis

Short Term Liabilities: HIK's short term assets ($1.7B) exceed its short term liabilities ($1.3B).

Long Term Liabilities: HIK's short term assets ($1.7B) exceed its long term liabilities ($438.0M).


Debt to Equity History and Analysis

Debt Level: HIK's debt to equity ratio (34.1%) is considered satisfactory.

Reducing Debt: HIK's debt to equity ratio has reduced from 37.9% to 34.1% over the past 5 years.

Debt Coverage: HIK's debt is well covered by operating cash flow (68.8%).

Interest Coverage: HIK's interest payments on its debt are well covered by EBIT (12.9x coverage).


Balance Sheet

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

Debt Coverage by Assets: HIK's debt is covered by short term assets (assets are 2.7x debt).


Next Steps

Dividend

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

1.60%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: HIK's dividend (1.6%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.9%).

High Dividend: HIK's dividend (1.6%) is low compared to the top 25% of dividend payers in the UK market (5.34%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (26.8%), HIK's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HIK's dividends in 3 years are forecast to be well covered by earnings (27% payout ratio).


Next Steps

Management

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

2.1yrs

Average management tenure


CEO

Siggi Olafsson (50yo)

2yrs

Tenure

US$5,418,510

Compensation

Mr. Sigurdur Oli Olafsson, Ph.D., also known as Siggi, has been Chief Executive Officer of Hikma Pharmaceuticals PLC since February 20, 2018 and serves its Executive Director since March 2018. Mr. Olafsson ...


CEO Compensation Analysis

Compensation vs Market: Siggi's total compensation ($USD5.42M) is above average for companies of similar size in the UK market ($USD3.32M).

Compensation vs Earnings: Insufficient data to compare Siggi's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
Said Samih Darwazah
Executive Chairman5.8yrsUS$4.50m0.58% $25.9m
Sigurdur Olafsson
CEO & Executive Director2yrsUS$5.42m0.0083% $364.9k
Mazen Samih Darwazah
Executive Vice Chairman & President of MENA15.1yrsUS$3.01m0.64% $28.3m
Khalid Waleed Al Nabilsi
Chief Financial Officer9.1yrsno data0.10% $4.5m
Shahin Fesharaki
Chief Scientific Officer & Global Head of Research Development0.5yrsno datano data
Bassam Rushdi Kanaan
Executive Vice President of Corporate Development and M&A5.9yrsno data0.18% $7.9m
Susan Ringdal
Executive Vice President of Strategic Planning & Global Affairs2.1yrsno datano data
Majda Labadi
Executive Vice President of Organisational Development2.1yrsno data0.11% $4.8m
Riad Mishlawi
President of Injectables2.1yrsno data0.083% $3.7m
Brian Hoffmann
President of US Generics2.7yrsno datano data

2.1yrs

Average Tenure

54yo

Average Age

Experienced Management: HIK's management team is considered experienced (2.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Said Samih Darwazah
Executive Chairman5.8yrsUS$4.50m0.58% $25.9m
Sigurdur Olafsson
CEO & Executive Director2yrsUS$5.42m0.0083% $364.9k
Mazen Samih Darwazah
Executive Vice Chairman & President of MENA15.1yrsUS$3.01m0.64% $28.3m
Pamela Kirby
Independent Non-Executive Director5.2yrsUS$101.00k0.0020% $88.0k
Robert Pickering
Senior Independent Director5.8yrsUS$101.00k0.0041% $182.7k
John Castellani
Independent Non-Executive Director3.9yrsUS$107.30k0.0014% $63.7k
Mohammed Ali Khaldoun Al-Husry
Non-Executive Director14.3yrsUS$87.50k0.48% $21.2m
Nabil Rizk
Chairman of West-ward Pharmaceuticals0yrsno datano data
Patrick Butler
Independent Non-Executive Director5.8yrsUS$109.00k0.0016% $70.8k
Jochen Gann
Non-Executive Director4yrsUS$86.60kno data

5.8yrs

Average Tenure

61yo

Average Age

Experienced Board: HIK's board of directors are considered experienced (5.8 years average tenure).


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.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

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


Key Information

  • Name: Hikma Pharmaceuticals PLC
  • Ticker: HIK
  • Exchange: LSE
  • Founded: 1978
  • Industry: Pharmaceuticals
  • Sector: Pharmaceuticals & Biotech
  • Market Cap: UK£4.423b
  • Shares outstanding: 242.29m
  • Website: https://www.hikma.com

Number of Employees


Location

  • Hikma Pharmaceuticals PLC
  • 1 New Burlington Place
  • London
  • Greater London
  • W1S 2HR
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HIKLSE (London Stock Exchange)YesOrdinary SharesGBGBPNov 2005
H5PDB (Deutsche Boerse AG)YesOrdinary SharesDEEURNov 2005
HKMP.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDNov 2005
HIKLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPNov 2005
HIKDIFX (NASDAQ Dubai Limited)GDR EACH REPR 2 ORD GBP0.10AEUSDJun 2007
HKMP.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDNov 2009

Biography

Hikma Pharmaceuticals PLC develops, manufactures, and markets a range of generic, branded, and in-licensed pharmaceutical products. It operates through three segments: Injectables, Generics, and Branded. The Injectables segment manufactures, markets, and sells generic injectable products for therapeutic categories, including oncology and anti-viral products to hospitals. The Generics segment develops and sells oral and other non-injectable generic products for retail market. The Branded segment develops, manufactures, and markets branded generics and in-licensed products to retail and hospital markets. The company offers products in various therapeutic areas, including respiratory, oncology, pain management, anti-infectives, cardiovascular, diabetes, and central nervous system. It operates in the United Kingdom, the United States, the Middle East, North Africa, Europe, and internationally. The company was founded in 1978 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 Analysis2020/02/26 21:14
End of Day Share Price2020/02/26 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.