LSE:SGE

Stock Analysis Report

Executive Summary

The Sage Group plc, together with its subsidiaries, provides technology solutions and services.

Snowflake

Fundamentals

Solid track record established dividend payer.


Similar Companies

Share Price & News

How has Sage Group's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

0.1%

SGE

-0.5%

GB Software

0.08%

GB Market


1 Year Return

32.1%

SGE

9.6%

GB Software

3.5%

GB Market

Return vs Industry: SGE exceeded the UK Software industry which returned 9.6% over the past year.

Return vs Market: SGE exceeded the UK Market which returned 3.5% over the past year.


Shareholder returns

SGEIndustryMarket
7 Day0.1%-0.5%0.08%
30 Day3.1%1.2%-1.3%
90 Day-5.1%-10.2%-2.2%
1 Year35.4%32.1%16.0%9.6%9.0%3.5%
3 Year4.4%-2.6%2.8%-13.8%18.1%3.1%
5 Year110.6%87.2%66.7%34.0%36.2%5.3%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Sage Group undervalued compared to its fair value and its price relative to the market?

23.99x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SGE (£6.94) is trading above our estimate of fair value (£3.43)

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


Price To Earnings Ratio

PE vs Industry: SGE is good value based on its PE Ratio (24x) compared to the Software industry average (27.5x).

PE vs Market: SGE is poor value based on its PE Ratio (24x) compared to the UK market (16.7x).


Price to Earnings Growth Ratio

PEG Ratio: SGE is poor value based on its PEG Ratio (3.4x)


Price to Book Ratio

PB vs Industry: SGE is overvalued based on its PB Ratio (5.5x) compared to the GB Software industry average (3.3x).


Next Steps

Future Growth

How is Sage Group forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

7.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SGE's forecast earnings growth (7% per year) is above the savings rate (1.2%).

Earnings vs Market: SGE's earnings (7% per year) are forecast to grow slower than the UK market (12.4% per year).

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

Revenue vs Market: SGE's revenue (6.1% per year) is forecast to grow faster than the UK market (4% per year).

High Growth Revenue: SGE's revenue (6.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SGE's Return on Equity is forecast to be high in 3 years time (21.3%)


Next Steps

Past Performance

How has Sage Group performed over the past 5 years?

9.7%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: SGE's earnings have grown by 9.7% per year over the past 5 years.

Accelerating Growth: SGE's earnings growth over the past year (22.7%) exceeds its 5-year average (9.7% per year).

Earnings vs Industry: SGE earnings growth over the past year (22.7%) exceeded the Software industry 7%.


Return on Equity

High ROE: SGE's Return on Equity (22.7%) is considered high.


Return on Assets

ROA vs Industry: SGE has a higher Return on Assets than the Software industry average last year.


Return on Capital Employed

ROCE Improving: SGE's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Sage Group's financial position?


Financial Position Analysis

Short Term Liabilities: SGE's short term assets (£757.0M) do not cover its short term liabilities (£1.0B)

Long Term Liabilities: SGE's short term assets (757.0M) do not cover its long term liabilities (842.0M)


Debt to Equity History and Analysis

Debt Level: SGE's debt to equity ratio (55.9%) is considered high

Reducing Debt: SGE's debt to equity ratio has increased from 55.3% to 55.9% over the past 5 years.

Debt Coverage: SGE's debt is well covered by operating cash flow (64.4%).

Interest Coverage: SGE's interest payments on its debt are well covered by EBIT (18.7x coverage).


Balance Sheet

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

Debt Coverage by Assets: SGE's debt is not covered by short term assets (assets are 1x debt).


Next Steps

Dividend

What is Sage Group's current dividend yield, its reliability and sustainability?

2.38%

Current Dividend Yield


Dividend Yield vs Market

company2.4%marketbottom25%2.0%markettop25%5.4%industryaverage2.7%forecastin3Years2.6%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: SGE's dividend (2.38%) is higher than the bottom 25% of dividend payers in the UK market (1.98%).

High Dividend: SGE's dividend (2.38%) is low compared to the top 25% of dividend payers in the UK market (5.37%).

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (57.5%), SGE's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SGE's dividends in 3 years are forecast to be covered by earnings (54.5% payout ratio).


Next Steps

Management

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

1.5yrs

Average management tenure


CEO

Steve Hare (58yo)

0.9yrs

Tenure

UK£1,176,000

Compensation

Mr. Stephen Hare, also known as Steve, BA, ACA, is Chief Executive Officer of The Sage Group plc since November 2, 2018. He has been Executive Director of The Sage Group plc since January 3, 2014 and has s ...


CEO Compensation Analysis

Compensation vs. Market: Steve has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the UK market.

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


Management Age and Tenure

1.5yrs

Average Tenure

54yo

Average Age

Experienced Management: SGE's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.


Board Age and Tenure

2.5yrs

Average Tenure

57yo

Average Age

Experienced Board: SGE's board of directors are not considered experienced ( 2.5 years average tenure), which suggests a new board.


Insider Trading

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


Recent Insider Transactions

BuyUK£68,04023 Sep 19
Jonathan Bewes
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares10,000
Max PriceUK£6.80
SellUK£464,98415 Aug 19
Aaron Harris
EntityIndividual
Role
Chief Technology Officer
Chief Technology Officer
Shares66,543
Max PriceUK£6.99
BuyUK£6,62226 Jun 19
Robert Reid
EntityIndividual
Shares829
Max PriceUK£7.99
BuyUK£18,31726 Jun 19
Stephen Hare
EntityIndividual
Role
Chief Executive Officer
CEO, Interim COO & Executive Director
Shares2,293
Max PriceUK£7.99
BuyUK£9626 Jun 19
Victoria Bradin
EntityIndividual
Role
Chief Legal Officer
General Counsel & Company Secretary
Shares12
Max PriceUK£7.99
BuyUK£44726 Jun 19
Amanda Cusdin
EntityIndividual
Role
Head of Human Resources
Chief People Officer
Shares56
Max PriceUK£7.99
BuyUK£10,07620 May 19
Annette Court
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares1,350
Max PriceUK£7.46
SellUK£2,236,44505 Mar 19
D. Crump
EntityIndividual
Shares334,933
Max PriceUK£6.68
BuyUK£260,04006 Dec 18
Jonathan A. Howell
EntityIndividual
Role
Member of the Board of Directors
CFO & Director
Shares44,000
Max PriceUK£5.91
BuyUK£113,29321 Nov 18
Donald Brydon
EntityIndividual
Role
Chairman of the Board
Independent Chairman
Shares22,000
Max PriceUK£5.15

Ownership Breakdown


Management Team

  • Steve Hare (58yo)

    CEO, Interim COO & Executive Director

    • Tenure: 0.9yrs
    • Compensation: UK£1.18m
  • Jonathan A. Howell (56yo)

    CFO & Director

    • Tenure: 6.4yrs
    • Compensation: UK£77.00k
  • Derk Bleeker

    Executive Vice President of Commercial Finance & Corporate Development

    • Tenure: 0yrs
  • Klaus-Michael Vogelberg (54yo)

    Chief Architect & Technology Advisor

    • Tenure: 0.5yrs
  • Aaron Harris

    Chief Technology Officer

    • Tenure: 0.5yrs
  • Ron McMurtrie (54yo)

    Chief Marketing Officer

    • Tenure: 2.8yrs
  • Daniel Crump (58yo)

    President & Executive Director

    • Tenure: 1.8yrs
    • Compensation: UK£711.87k
  • Vicki Bradin (41yo)

    General Counsel & Company Secretary

    • Tenure: 3yrs
  • Amanda Cusdin (42yo)

    Chief People Officer

    • Tenure: 2yrs
  • Lauren Wholley

    Investor Relations Director

    • Tenure: 0yrs

Board Members

  • Donald Brydon (73yo)

    Independent Chairman

    • Tenure: 7.1yrs
    • Compensation: UK£407.00k
  • Steve Hare (58yo)

    CEO, Interim COO & Executive Director

    • Tenure: 0.9yrs
    • Compensation: UK£1.18m
  • John Bates (49yo)

    Independent Non-Executive Director

    • Tenure: 0.8yrs
  • Jonathan A. Howell (56yo)

    CFO & Director

    • Tenure: 6.4yrs
    • Compensation: UK£77.00k
  • John William Hall (70yo)

    Independent Non-Executive Director

    • Tenure: 5.8yrs
    • Compensation: UK£87.00k
  • Cath Keers (54yo)

    Independent Non-Executive Director

    • Tenure: 2.3yrs
    • Compensation: UK£60.00k
  • Annette Court (57yo)

    Independent Non-Executive Director

    • Tenure: 0.5yrs
  • Soni Jiadani (53yo)

    Independent Non-Executive Director

    • Tenure: 2.7yrs
    • Compensation: UK£60.00k
  • Jonathan Bewes

    Independent Non-Executive Director

    • Tenure: 0.5yrs
  • Daniel Crump (58yo)

    President & Executive Director

    • Tenure: 1.8yrs
    • Compensation: UK£711.87k

Company Information

The Sage Group plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Sage Group plc
  • Ticker: SGE
  • Exchange: LSE
  • Founded: 1981
  • Industry: Application Software
  • Sector: Software
  • Market Cap: UK£7.562b
  • Shares outstanding: 1.09b
  • Website: https://www.sage.com

Number of Employees


Location

  • The Sage Group plc
  • North Park
  • Newcastle upon Tyne
  • Tyne and Wear
  • NE13 9AA
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SGGE.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1990
SGELSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1990
SGK1DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1990
SGELBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1990
SGPY.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDJan 2005

Biography

The Sage Group plc, together with its subsidiaries, provides technology solutions and services. It offers Sage business cloud accounting solution; Sage business cloud financials, a solution that provides r ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/23 20:34
End of Day Share Price2019/10/23 00:00
Earnings2019/03/31
Annual Earnings2018/09/30


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.