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Hikma Pharmaceuticals

LSE:HIK
Snowflake Description

Flawless balance sheet average dividend payer.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
HIK
LSE
£4B
Market Cap
  1. Home
  2. GB
  3. Pharmaceuticals & Biotech
Company description

Hikma Pharmaceuticals PLC develops, manufactures, and markets a range of generic, branded, and in-licensed pharmaceutical products. The last earnings update was 69 days ago. More info.


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HIK Share Price and Events
7 Day Returns
2.8%
LSE:HIK
1.2%
GB Pharmaceuticals
0.3%
GB Market
1 Year Returns
18.3%
LSE:HIK
9.5%
GB Pharmaceuticals
-3.8%
GB Market
HIK Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Hikma Pharmaceuticals (HIK) 2.8% -3.6% -0.9% 18.3% -25.5% 1.2%
GB Pharmaceuticals 1.2% 3% 0.8% 9.5% 25.2% 21.5%
GB Market 0.3% 1.8% 2.4% -3.8% 18.5% 4.5%
1 Year Return vs Industry and Market
  • HIK outperformed the Pharmaceuticals industry which returned 9.5% over the past year.
  • HIK outperformed the Market in United Kingdom of Great Britain and Northern Ireland which returned -3.8% over the past year.
Price Volatility
HIK
Industry
5yr Volatility vs Market

Value

 Is Hikma Pharmaceuticals undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Hikma Pharmaceuticals to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Hikma Pharmaceuticals.

LSE:HIK Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 10 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 6.6%
Perpetual Growth Rate 10-Year GB Government Bond Rate 1.2%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for LSE:HIK
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year GB Govt Bond Rate 1.2%
Equity Risk Premium S&P Global 6.7%
Pharmaceuticals Unlevered Beta Simply Wall St/ S&P Global 0.64
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.643 (1 + (1- 19%) (12.25%))
0.803
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
0.8
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 1.23% + (0.803 * 6.65%)
6.57%

Discounted Cash Flow Calculation for LSE:HIK using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Hikma Pharmaceuticals is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

LSE:HIK DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (USD, Millions) Source Present Value
Discounted (@ 6.57%)
2019 310.35 Analyst x4 291.22
2020 338.18 Analyst x4 297.77
2021 364.80 Analyst x2 301.41
2022 385.50 Est @ 5.67% 298.88
2023 402.23 Est @ 4.34% 292.63
2024 415.93 Est @ 3.41% 283.95
2025 427.38 Est @ 2.75% 273.78
2026 437.18 Est @ 2.29% 262.80
2027 445.82 Est @ 1.97% 251.47
2028 453.62 Est @ 1.75% 240.09
Present value of next 10 years cash flows $2,793.99
LSE:HIK DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2028 × (1 + g) ÷ (Discount Rate – g)
= $453.62 × (1 + 1.23%) ÷ (6.57% – 1.23%)
$8,595.73
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= $8,595.73 ÷ (1 + 6.57%)10
$4,549.60
LSE:HIK Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= $2,793.99 + $4,549.60
$7,343.59
Equity Value per Share
(USD)
= Total value / Shares Outstanding
= $7,343.59 / 242.20
$30.32
LSE:HIK Discount to Share Price
Calculation Result
Exchange Rate USD/GBP
(Reporting currency to currency of LSE:HIK)
0.788
Value per Share
(GBP)
= Value per Share in USD x Exchange Rate (USD/GBP)
= $30.32 x 0.788
£23.88
Value per share (GBP) From above. £23.88
Current discount Discount to share price of £16.91
= -1 x (£16.91 - £23.88) / £23.88
29.2%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

Current Discount
Amount off the current price Hikma Pharmaceuticals is available for.
Intrinsic value
29%
Share price is £16.91 vs Future cash flow value of £23.88
Current Discount Checks
For Hikma Pharmaceuticals to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
  • Hikma Pharmaceuticals's share price is below the future cash flow value, and at a moderate discount (> 20%).
  • Hikma Pharmaceuticals's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Hikma Pharmaceuticals's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Hikma Pharmaceuticals's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
LSE:HIK PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2018-12-31) in USD $1.17
LSE:HIK Share Price ** LSE (2019-06-21) in GBP £16.91
LSE:HIK Share Price converted to USD reporting currency Exchange rate (GBP/ USD) 1.27 $21.47
United Kingdom of Great Britain and Northern Ireland Pharmaceuticals Industry PE Ratio Median Figure of 9 Publicly-Listed Pharmaceuticals Companies 19.88x
United Kingdom of Great Britain and Northern Ireland Market PE Ratio Median Figure of 787 Publicly-Listed Companies 16.39x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Hikma Pharmaceuticals.

LSE:HIK PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= LSE:HIK Share Price ÷ EPS (both in USD)

= 21.47 ÷ 1.17

18.35x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Hikma Pharmaceuticals is good value based on earnings compared to the GB Pharmaceuticals industry average.
  • Hikma Pharmaceuticals is overvalued based on earnings compared to the United Kingdom of Great Britain and Northern Ireland market.
Price based on expected Growth
Does Hikma Pharmaceuticals's expected growth come at a high price?
Raw Data
LSE:HIK PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 18.35x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 10 Analysts
8.6%per year
United Kingdom of Great Britain and Northern Ireland Pharmaceuticals Industry PEG Ratio Median Figure of 6 Publicly-Listed Pharmaceuticals Companies 1.7x
United Kingdom of Great Britain and Northern Ireland Market PEG Ratio Median Figure of 573 Publicly-Listed Companies 1.48x

*Line of best fit is calculated by linear regression .

LSE:HIK PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 18.35x ÷ 8.6%

2.13x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Hikma Pharmaceuticals is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Hikma Pharmaceuticals's assets?
Raw Data
LSE:HIK PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2018-12-31) in USD $6.98
LSE:HIK Share Price * LSE (2019-06-21) in GBP £16.91
LSE:HIK Share Price converted to USD reporting currency Exchange rate (GBP/ USD) 1.27 $21.47
United Kingdom of Great Britain and Northern Ireland Pharmaceuticals Industry PB Ratio Median Figure of 25 Publicly-Listed Pharmaceuticals Companies 2.65x
United Kingdom of Great Britain and Northern Ireland Market PB Ratio Median Figure of 1,371 Publicly-Listed Companies 1.49x
LSE:HIK PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= LSE:HIK Share Price ÷ Book Value per Share (both in USD)

= 21.47 ÷ 6.98

3.08x

* Primary Listing of Hikma Pharmaceuticals.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Hikma Pharmaceuticals is overvalued based on assets compared to the GB Pharmaceuticals industry average.
X
Value checks
We assess Hikma Pharmaceuticals's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Pharmaceuticals industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Pharmaceuticals industry average (and greater than 0)? (1 check)
  5. Hikma Pharmaceuticals has a total score of 2/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

Future Performance

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

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
8.6%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Hikma Pharmaceuticals expected to grow at an attractive rate?
  • Hikma Pharmaceuticals's earnings growth is expected to exceed the low risk savings rate of 1.2%.
Growth vs Market Checks
  • Hikma Pharmaceuticals's earnings growth is positive but not above the United Kingdom of Great Britain and Northern Ireland market average.
  • Hikma Pharmaceuticals's revenue growth is expected to exceed the United Kingdom of Great Britain and Northern Ireland market average.
Annual Growth Rates Comparison
Raw Data
LSE:HIK Future Growth Rates Data Sources
Data Point Source Value (per year)
LSE:HIK Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 10 Analysts 8.6%
LSE:HIK Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 10 Analysts 5.2%
United Kingdom of Great Britain and Northern Ireland Pharmaceuticals Industry Earnings Growth Rate Market Cap Weighted Average 19.8%
United Kingdom of Great Britain and Northern Ireland Pharmaceuticals Industry Revenue Growth Rate Market Cap Weighted Average 7.6%
United Kingdom of Great Britain and Northern Ireland Market Earnings Growth Rate Market Cap Weighted Average 10.9%
United Kingdom of Great Britain and Northern Ireland Market Revenue Growth Rate Market Cap Weighted Average 4.8%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
LSE:HIK Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (5 months ago) See Below
Future Estimates Average of up to 10 Analyst Estimates (S&P Global) See Below
All numbers in USD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
LSE:HIK Future Estimates Data
Date (Data in USD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2023-12-31 2,746 564 441 3
2022-12-31 2,522 560 378 3
2021-12-31 2,334 505 363 5
2020-12-31 2,231 475 319 10
2019-12-31 2,135 520 297 10
LSE:HIK Past Financials Data
Date (Data in USD Millions) Revenue Cash Flow Net Income *
2018-12-31 2,070 430 282
2018-09-30 2,050 417 -262
2018-06-30 2,030 403 -806
2018-03-31 1,983 423 -825
2017-12-31 1,936 443 -843
2017-09-30 1,950 431 -339
2017-06-30 1,963 419 166
2017-03-31 1,957 356 161
2016-12-31 1,950 293 155
2016-09-30 1,782 317 166
2016-06-30 1,613 340 176
2016-03-31 1,527 353 214

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Hikma Pharmaceuticals's earnings are expected to grow by 8.6% yearly, however this is not considered high growth (20% yearly).
  • Hikma Pharmaceuticals's revenue is expected to grow by 5.2% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
LSE:HIK Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (5 months ago) See Below
Future Estimates Average of up to 10 Analyst Estimates (S&P Global) See Below

All data from Hikma Pharmaceuticals Company Filings, last reported 5 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

LSE:HIK Future Estimates Data
Date (Data in USD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2023-12-31 1.81 2.27 1.56 3.00
2022-12-31 1.55 1.70 1.48 3.00
2021-12-31 1.49 1.63 1.35 4.00
2020-12-31 1.30 1.44 1.07 6.00
2019-12-31 1.23 1.29 1.15 7.00
LSE:HIK Past Financials Data
Date (Data in USD Millions) EPS *
2018-12-31 1.17
2018-09-30 -1.09
2018-06-30 -3.35
2018-03-31 -3.43
2017-12-31 -3.51
2017-09-30 -1.41
2017-06-30 0.69
2017-03-31 0.68
2016-12-31 0.67
2016-09-30 0.74
2016-06-30 0.83
2016-03-31 1.04

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Hikma Pharmaceuticals is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
X
Future performance checks
We assess Hikma Pharmaceuticals's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United Kingdom of Great Britain and Northern Ireland market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United Kingdom of Great Britain and Northern Ireland market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Hikma Pharmaceuticals has a total score of 2/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has Hikma Pharmaceuticals performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Hikma Pharmaceuticals's growth in the last year to its industry (Pharmaceuticals).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Hikma Pharmaceuticals's year on year earnings growth rate was negative over the past 5 years, however the most recent earnings are above average.
  • Hikma Pharmaceuticals has become profitable in the last year making the earnings growth rate difficult to compare to the 5-year average.
  • Hikma Pharmaceuticals has become profitable in the last year making it difficult to compare the GB Pharmaceuticals industry average.
Earnings and Revenue History
Hikma Pharmaceuticals's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Hikma Pharmaceuticals Company Filings, last reported 5 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

LSE:HIK Past Revenue, Cash Flow and Net Income Data
Date (Data in USD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2018-12-31 2,070.00 282.00 464.00 118.00
2018-09-30 2,050.00 -262.00 475.00 110.00
2018-06-30 2,030.00 -806.00 486.00 102.00
2018-03-31 1,983.00 -824.50 480.00 108.50
2017-12-31 1,936.00 -843.00 474.00 115.00
2017-09-30 1,949.50 -338.50 462.00 122.00
2017-06-30 1,963.00 166.00 450.00 129.00
2017-03-31 1,956.50 160.50 439.50 127.50
2016-12-31 1,950.00 155.00 429.00 126.00
2016-09-30 1,781.50 165.50 410.50 99.50
2016-06-30 1,613.00 176.00 392.00 73.00
2016-03-31 1,526.50 214.00 372.00 54.50
2015-12-31 1,440.00 252.00 352.00 36.00
2015-09-30 1,450.00 247.50 345.50 46.00
2015-06-30 1,460.00 243.00 339.00 56.00
2015-03-31 1,474.50 260.50 342.00 55.50
2014-12-31 1,489.00 278.00 345.00 55.00
2014-09-30 1,477.00 293.00 339.00 46.00
2014-06-30 1,465.00 308.00 333.00 37.00
2014-03-31 1,415.00 260.00 322.00 34.00
2013-12-31 1,365.00 212.00 311.00 31.00
2013-09-30 1,289.87 172.30 299.51 30.45
2013-06-30 1,214.74 132.60 288.02 29.90
2013-03-31 1,161.87 116.30 280.51 31.95
2012-12-31 1,109.00 100.00 273.00 34.00
2012-09-30 1,082.26 93.69 269.60 35.43
2012-06-30 1,055.53 87.38 266.21 36.86

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Hikma Pharmaceuticals has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • Hikma Pharmaceuticals used its assets more efficiently than the GB Pharmaceuticals industry average last year based on Return on Assets.
  • Hikma Pharmaceuticals's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Hikma Pharmaceuticals's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Pharmaceuticals industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Hikma Pharmaceuticals has a total score of 1/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is Hikma Pharmaceuticals's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Hikma Pharmaceuticals's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Hikma Pharmaceuticals is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Hikma Pharmaceuticals's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Hikma Pharmaceuticals's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of physical assets or inventory.
  • Debt is covered by short term assets, assets are 2.6x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Hikma Pharmaceuticals Company Filings, last reported 5 months ago.

LSE:HIK Past Debt and Equity Data
Date (Data in USD Millions) Total Equity Total Debt Cash & Short Term Investments
2018-12-31 1,697.00 637.00 297.00
2018-09-30 1,697.00 637.00 297.00
2018-06-30 1,542.00 721.00 241.00
2018-03-31 1,542.00 721.00 241.00
2017-12-31 1,528.00 777.00 249.00
2017-09-30 1,528.00 777.00 249.00
2017-06-30 2,452.00 880.00 265.00
2017-03-31 2,452.00 880.00 265.00
2016-12-31 2,411.00 860.00 175.00
2016-09-30 2,411.00 860.00 175.00
2016-06-30 2,400.00 1,072.00 268.00
2016-03-31 2,400.00 1,072.00 268.00
2015-12-31 1,352.00 728.00 573.00
2015-09-30 1,352.00 728.00 573.00
2015-06-30 1,274.00 778.00 490.00
2015-03-31 1,274.00 778.00 490.00
2014-12-31 1,216.00 562.00 280.00
2014-09-30 1,216.00 562.00 280.00
2014-06-30 1,167.00 465.00 282.00
2014-03-31 1,167.00 465.00 282.00
2013-12-31 1,034.00 443.00 168.00
2013-09-30 1,034.00 443.00 168.00
2013-06-30 897.89 481.35 119.01
2013-03-31 897.89 481.35 119.01
2012-12-31 848.00 588.00 177.00
2012-09-30 848.00 588.00 177.00
2012-06-30 787.53 594.02 114.38
  • Hikma Pharmaceuticals's level of debt (37.5%) compared to net worth is satisfactory (less than 40%).
  • The level of debt compared to net worth has been reduced over the past 5 years (42.8% vs 37.5% today).
  • Debt is well covered by operating cash flow (67.5%, greater than 20% of total debt).
  • Interest payments on debt are well covered by earnings (EBIT is 11.3x coverage).
X
Financial health checks
We assess Hikma Pharmaceuticals's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Hikma Pharmaceuticals has a total score of 6/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

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

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
1.77%
Current annual income from Hikma Pharmaceuticals dividends. Estimated to be 1.95% next year.
If you bought £2,000 of Hikma Pharmaceuticals shares you are expected to receive £35 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Hikma Pharmaceuticals's pays a lower dividend yield than the bottom 25% of dividend payers in United Kingdom of Great Britain and Northern Ireland (1.96%).
  • Hikma Pharmaceuticals's dividend is below the markets top 25% of dividend payers in United Kingdom of Great Britain and Northern Ireland (5.4%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
LSE:HIK Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 10 Analyst Estimates (S&P Global) See Below
United Kingdom of Great Britain and Northern Ireland Pharmaceuticals Industry Average Dividend Yield Market Cap Weighted Average of 6 Stocks 4.1%
United Kingdom of Great Britain and Northern Ireland Market Average Dividend Yield Market Cap Weighted Average of 706 Stocks 4.3%
United Kingdom of Great Britain and Northern Ireland Minimum Threshold Dividend Yield 10th Percentile 1%
United Kingdom of Great Britain and Northern Ireland Bottom 25% Dividend Yield 25th Percentile 2%
United Kingdom of Great Britain and Northern Ireland Top 25% Dividend Yield 75th Percentile 5.4%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

LSE:HIK Future Dividends Estimate Data
Date (Data in $) Dividend per Share (annual) Avg. No. Analysts
2023-12-31 0.57 2.00
2022-12-31 0.45 3.00
2021-12-31 0.43 7.00
2020-12-31 0.41 11.00
2019-12-31 0.39 11.00
LSE:HIK Past Annualized Dividends Data
Date (Data in $) Dividend per share (annual) Avg. Yield (%)
2019-05-17 0.380 1.795
2018-05-18 0.340 1.558
2017-04-07 0.330 2.032
2017-03-15 0.330 1.308
2016-05-12 0.320 1.217
2015-08-19 0.320 1.034
2015-05-14 0.320 0.981
2014-08-20 0.240 0.763
2014-05-15 0.200 0.693
2013-10-04 0.170 0.789
2013-03-13 0.160 1.023
2012-03-14 0.130 1.138
2012-03-13 0.130 1.071
2011-03-16 0.130 1.188
2011-03-15 0.130 1.159
2010-03-17 0.130 1.145
2010-03-01 0.130 1.479
2009-08-27 0.085 1.058

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Dividends per share have been stable in the past 10 years.
  • Dividends per share have increased over the past 10 years.
Current Payout to shareholders
What portion of Hikma Pharmaceuticals's earnings are paid to the shareholders as a dividend.
  • Dividends paid are well covered by earnings (3.1x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be well covered by earnings (3.8x coverage).
X
Income/ dividend checks
We assess Hikma Pharmaceuticals's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 1%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Hikma Pharmaceuticals afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Hikma Pharmaceuticals has a total score of 4/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

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

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Siggi Olafsson
COMPENSATION $5,418,510
AGE 49
TENURE AS CEO 1.3 years
CEO Bio

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 served as an Executive Officer of Teva Pharmaceutical Industries Limited since December 5, 2016. Mr. Olafsson served as the Chief Executive Officer and President of Global Generic Medicines Group at Teva Pharmaceutical Industries Limited from July 01, 2014 to 2017. He served as the President at Actavis Pharma Inc. from 2012 to June 30, 2014. Mr. Olafsson served as an Executive Vice President of Global Generics at Allergan plc (Actavis Plc) from September 1, 2010 to April 27, 2012 and served as its President of the Global Generics business since April 27, 2012. He served as Chief Executive Officer of Actavis Group ehf. from August 2008 to June 23, 2010 and served as its President of US Sales & marketing & Member of the Executive Board until June 23, 2010 and Deputy to Chief Executive Officer from December 1, 2006 to August 2008. He served as the Chief Executive Officer of Actavis UK Ltd until June 2010. He joined Actavis in 2003, after working for Pfizer UK from 1998 to 2003 moved to Pfizer US, held a post in Global Research and Development since 2001. From 2003 to 2008, he held positions of increasing responsibility within the Actavis Group, including Deputy CEO, Vice President of Corporate Development and CEO of Actavis Inc. U.S. From 1998 to 2003, he held positions of increasing responsibility with the Global R&D organization in the U.K. and U.S. of Pfizer Inc., a pharmaceutical company. From 1994 to 1998, he served as Head of Drug Development for Omega Farma, a pharmaceutical company, in Iceland. Prior to that, Mr. Olafsson served as Marketing Manager of Omega Farma (now Actavis) and served as its Drug Development Manager. He served as the Managing Director of Actavis Plc. in the US since 2003 and served as its Chief Executive of Corporate Development from 2003 to 2006 and the Chief Executive of Sales & Marketing International since 2005. He also led the acquisition and integration of Pharma Avalanche, Biovena, Lotus Laboratories, Amide Pharmaceuticals and Alpharma Generics. He serves as Chairman and Director of Elucida Oncology, Inc. He has been a Director of Actavis Limited since October 2, 2013. He serves as Director of Oculis. He has been Director at Pfenex Inc. since May 05, 2017. He serves as a Director of Actavis Group ehf. He served as a Director of Allergan plc from October 2, 2013 to June 30, 2014. He holds a Degree in Pharmacy from the University of Iceland. He is a published author. Mr. Olafsson has an M.S. in Pharmacy (Cand Pharm) from the University of Iceland, Reykjavik.

CEO Compensation
  • Insufficient data for Siggi to compare compensation growth.
  • Siggi's remuneration is higher than average for companies of similar size in United Kingdom of Great Britain and Northern Ireland.
Management Team Tenure

Average tenure and age of the Hikma Pharmaceuticals management team in years:

1.4
Average Tenure
51
Average Age
  • The average tenure for the Hikma Pharmaceuticals management team is less than 2 years, this suggests a new team.
Management Team

Said Samih Darwazah

TITLE
Executive Chairman
COMPENSATION
$5M
AGE
61

Siggi Olafsson

TITLE
CEO & Executive Director
COMPENSATION
$5M
AGE
49
TENURE
1.3 yrs

Mazen Samih Darwazah

TITLE
Executive Vice Chairman & President of MENA
COMPENSATION
$3M
AGE
60
TENURE
5.3 yrs

Khalid Walid Nabilsi

TITLE
Chief Financial Officer
AGE
46
TENURE
8.4 yrs

Surendera Tyagi

TITLE
Group Chief Scientific Officer and Global Head of Research & Development
TENURE
1.4 yrs

Bassam Rushdi Kanaan

TITLE
Executive Vice President of Corporate Development and M&A
AGE
53
TENURE
5.3 yrs

Susan Ringdal

TITLE
Executive Vice President of Strategic Planning & Global Affairs
TENURE
1.4 yrs

Majda Labadi

TITLE
Executive Vice President of Organisational Development
TENURE
1.4 yrs

Henriette Nielsen

TITLE
Executive Vice President of Business Operations
TENURE
1 yrs

Sagar Patel

TITLE
Head of European Commercial of Injectable Business
AGE
45
TENURE
0.7 yrs
Board of Directors Tenure

Average tenure and age of the Hikma Pharmaceuticals board of directors in years:

5.1
Average Tenure
60
Average Age
  • The tenure for the Hikma Pharmaceuticals board of directors is about average.
Board of Directors

Said Samih Darwazah

TITLE
Executive Chairman
COMPENSATION
$5M
AGE
61
TENURE
5.1 yrs

Siggi Olafsson

TITLE
CEO & Executive Director
COMPENSATION
$5M
AGE
49
TENURE
1.3 yrs

Mazen Samih Darwazah

TITLE
Executive Vice Chairman & President of MENA
COMPENSATION
$3M
AGE
60
TENURE
14.4 yrs

Nabil Rizk

TITLE
Chairman of West-ward Pharmaceuticals

Robert Pickering

TITLE
Senior Independent Director
COMPENSATION
$101K
AGE
58
TENURE
5.1 yrs

Pat Butler

TITLE
Independent Non-Executive Director
COMPENSATION
$109K
AGE
58
TENURE
5.2 yrs

Pam Kirby

TITLE
Independent Non-Executive Director
COMPENSATION
$101K
AGE
65
TENURE
4.5 yrs

John Castellani

TITLE
Independent Non-Executive Director
COMPENSATION
$107K
AGE
67
TENURE
3.3 yrs

Khaldoun Al-Husry

TITLE
Non-Executive Director
COMPENSATION
$88K
AGE
61
TENURE
13.7 yrs

Jochen Gann

TITLE
Non-Executive Director
COMPENSATION
$87K
AGE
53
TENURE
3.3 yrs
Who owns this company?
Recent Insider Trading
  • No 3 month insider trading information.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price (£) Value (£)
15. Mar 19 Buy Mary Henderson Individual 15. Mar 19 15. Mar 19 2,000 £15.63 £31,261
13. Mar 19 Buy Mazen Samih Darwazah Individual 13. Mar 19 13. Mar 19 20,000 £15.82 £316,396
13. Mar 19 Buy Said Samih Darwazah Individual 13. Mar 19 13. Mar 19 20,000 £15.92 £318,332
22. Aug 18 Sell Bassam Rushdi Kanaan Individual 20. Aug 18 21. Aug 18 -30,000 £19.17 £-575,100
X
Management checks
We assess Hikma Pharmaceuticals's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Hikma Pharmaceuticals has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

News

Simply Wall St News

What Kind Of Shareholder Owns Most Hikma Pharmaceuticals PLC (LON:HIK) Stock?

Insider Ownership Of Hikma Pharmaceuticals The definition of company insiders can be subjective, and does vary between jurisdictions. … Shareholders would probably be interested to learn that insiders own shares in Hikma Pharmaceuticals PLC. … Private Company Ownership We can see that Private Companies own 42%, of the shares on issue.

Simply Wall St -

Is Hikma Pharmaceuticals PLC (LON:HIK) A Financially Strong Company?

On top of this, HIK has produced US$430m in operating cash flow in the last twelve months, leading to an operating cash to total debt ratio of 68%, signalling that HIK’s current level of operating cash is high enough to cover debt. … At the current liabilities level of US$893m, the company has maintained a safe level of current assets to meet its obligations, with the current ratio last standing at 1.87x. … Next Steps: HIK’s high cash coverage and appropriate debt levels indicate its ability to utilise its borrowings efficiently in order to generate ample cash flow.

Simply Wall St -

Is Hikma Pharmaceuticals PLC (LON:HIK) An Attractive Dividend Stock?

Hikma Pharmaceuticals is paying out less than half of its earnings, which we like. … It's great to see that Hikma Pharmaceuticals is paying out a low percentage of its earnings and cash flow. … Earnings growth generally bodes well for the future value of company dividend payments.

Simply Wall St -

If You Had Bought Hikma Pharmaceuticals (LON:HIK) Stock A Year Ago, You Could Pocket A 28% Gain Today

To wit, the Hikma Pharmaceuticals PLC (LON:HIK) share price is 28% higher than it was a year ago, much better than the market return of around -0.6% (not including dividends) in the same period. … By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time. … Dive deeper into the earnings by checking this interactive graph of Hikma Pharmaceuticals's earnings, revenue and cash flow.

Simply Wall St -

What Do Analysts Think About Hikma Pharmaceuticals PLC's (LON:HIK) Earnings Outlook?

The most recent earnings announcement Hikma Pharmaceuticals PLC's (LON:HIK) released in December 2018 … negative earnings

Simply Wall St -

Read This Before Considering Hikma Pharmaceuticals PLC (LON:HIK) For Its Upcoming US$0.26 Dividend

Important news for shareholders and potential investors in Hikma Pharmaceuticals PLC (LON:HIK): The dividend payment of US$0.26 per share will be distributed to shareholders on 22 May 2019, and the stock will begin trading ex-dividend at an earlier date, 04 April 2019. … Below, I'm going to look at the latest data and analyze the stock and its dividend property in further detail. … When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:?

Simply Wall St -

Is Hikma Pharmaceuticals PLC (LON:HIK) A High Quality Stock To Own?

Hikma Pharmaceuticals has a ROE of 17%, based on the last twelve months. … That means that for every £1 worth of shareholders' equity, it generated £0.17 in profit. … Return on Equity = Net Profit ÷ Shareholders' Equity

Simply Wall St -

Hikma Pharmaceuticals PLC (LON:HIK): Time For A Financial Health Check

Small and large cap stocks are widely popular for a variety of reasons, however, mid-cap companies such as Hikma Pharmaceuticals PLC (LON:HIK), with a market cap of UK£4.0b, often get neglected by retail investors. … Don’t forget that this is a general and concentrated examination of Hikma Pharmaceuticals’s financial health, so you should conduct further analysis. … See our latest analysis for Hikma Pharmaceuticals

Simply Wall St -

Have Insiders Been Selling Hikma Pharmaceuticals PLC (LON:HIK) Shares This Year?

The Last 12 Months Of Insider Transactions At Hikma Pharmaceuticals. … In the last twelve months, the biggest single sale by an insider was when Executive Vice President of Corporate Development and M&A Bassam Rushdi Kanaan sold UK£575k worth of shares at a price of UK£19.17 per share … Bassam Rushdi Kanaan was the only individual insider to sell shares in the last twelve months.

Simply Wall St -

A Look At The Intrinsic Value Of Hikma Pharmaceuticals PLC (LON:HIK)

Today I will be providing a simple run through of a valuation method used to estimate the attractiveness of Hikma Pharmaceuticals PLC (LON:HIK) as an investment opportunity. … by estimating the company's future cash flows and discounting them to their present value. … discounted cash flows (DCF).

Simply Wall St -

Company Info

Description

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.

Details
Name: Hikma Pharmaceuticals PLC
HIK
Exchange: LSE
Founded: 1978
£4,095,613,228
242,200,664
Website: http://www.hikma.com
Address: Hikma Pharmaceuticals PLC
1 New Burlington Place,
London,
Greater London, W1S 2HR,
United Kingdom
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
LSE HIK Ordinary Shares London Stock Exchange GB GBP 02. Nov 2005
OTCPK HKMP.F Ordinary Shares Pink Sheets LLC US USD 02. Nov 2005
DB H5P Ordinary Shares Deutsche Boerse AG DE EUR 02. Nov 2005
BATS-CHIXE HIKL Ordinary Shares BATS 'Chi-X Europe' GB GBP 02. Nov 2005
OTCPK HKMP.Y SPONSORED ADR Pink Sheets LLC US USD 12. Nov 2009
DIFX HIK GDR EACH REPR 2 ORD GBP0.10 NASDAQ Dubai Limited AE USD 15. Jun 2007
Number of employees
Current staff
Staff numbers
8,400
Hikma Pharmaceuticals employees.
Industry
Pharmaceuticals
Pharmaceuticals & Biotech
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/06/23 22:36
End of day share price update: 2019/06/21 00:00
Last estimates confirmation: 2019/05/20
Last earnings filing: 2019/04/15
Last earnings reported: 2018/12/31
Last annual earnings reported: 2018/12/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

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.