LSE:RSW

Stock Analysis Report

Executive Summary

Renishaw plc, an engineering and scientific technology company, designs, manufactures, distributes, sells, and services metrology and healthcare products worldwide.

Snowflake

Fundamentals

Excellent balance sheet second-rate dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events


Market Performance


7 Day Return

-9.2%

RSW

-2.5%

GB Electronic

-0.3%

GB Market


1 Year Return

-13.8%

RSW

8.4%

GB Electronic

3.0%

GB Market

Return vs Industry: RSW underperformed the UK Electronic industry which returned 8.4% over the past year.

Return vs Market: RSW underperformed the UK Market which returned 3% over the past year.


Shareholder returns

RSWIndustryMarket
7 Day-9.2%-2.5%-0.3%
30 Day-14.1%-5.9%-0.9%
90 Day-12.6%-5.9%-2.0%
1 Year-12.4%-13.8%10.2%8.4%8.0%3.0%
3 Year25.3%20.3%47.4%40.7%18.0%3.6%
5 Year121.8%104.0%122.8%103.5%35.8%6.4%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: RSW (£32.44) is trading below our estimate of fair value (£98.46)

Significantly Undervalued: RSW is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: RSW is poor value based on its PE Ratio (25.6x) compared to the Electronic industry average (19.6x).

PE vs Market: RSW is poor value based on its PE Ratio (25.6x) compared to the UK market (16.7x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: RSW is overvalued based on its PB Ratio (4x) compared to the GB Electronic industry average (2.1x).


Next Steps

Future Growth

How is Renishaw forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

7.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RSW's forecast earnings growth (7.6% per year) is above the savings rate (1.2%).

Earnings vs Market: RSW's earnings (7.6% per year) are forecast to grow slower than the UK market (12.6% per year).

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

Revenue vs Market: RSW's revenue (4.9% per year) is forecast to grow faster than the UK market (3.9% per year).

High Growth Revenue: RSW's revenue (4.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

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


Next Steps

Past Performance

How has Renishaw performed over the past 5 years?

5.0%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

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

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

Earnings vs Industry: RSW had negative earnings growth (-30.3%) over the past year, making it difficult to compare to the Electronic industry average (-7.7%).


Return on Equity

High ROE: RSW's Return on Equity (15.8%) is considered low.


Return on Assets

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


Return on Capital Employed

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


Next Steps

Financial Health

How is Renishaw's financial position?


Financial Position Analysis

Short Term Liabilities: RSW's short term assets (£408.3M) exceeds its short term liabilities (£95.6M)

Long Term Liabilities: RSW's short term assets (408.3M) exceeds its long term liabilities (97.0M)


Debt to Equity History and Analysis

Debt Level: RSW's debt to equity ratio (1.8%) is considered satisfactory

Reducing Debt: Insufficient data to determine if RSW's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: RSW's debt is well covered by operating cash flow (1024%).

Interest Coverage: RSW earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

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

Debt Coverage by Assets: RSW's debt is covered by short term assets (assets are 39.261560x debt).


Next Steps

Dividend

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

1.85%

Current Dividend Yield


Dividend Yield vs Market

company1.8%marketbottom25%2.0%markettop25%5.4%industryaverage1.7%forecastin3Years2.1%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: RSW's dividend (1.85%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (2.01%).

High Dividend: RSW's dividend (1.85%) is low compared to the top 25% of dividend payers in the UK market (5.36%).

Stable Dividend: RSW's dividend payments have been volatile in the past 10 years.

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (47.3%), RSW's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: RSW's dividends in 3 years are forecast to be well covered by earnings (46.6% payout ratio).


Next Steps

Management

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

1.8yrs

Average management tenure


CEO

Will Lee 0

1.7yrs

Tenure

UK£653,000

Compensation

Mr. William Lee, also known as Will, has been the Chief Executive of Renishaw plc since February 2018 and has been its Member of the Executive Board since December 2015. Mr. Lee is responsible for the prod ...


CEO Compensation Analysis

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

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


Management Age and Tenure

1.8yrs

Average Tenure

67.5yo

Average Age

Experienced Management: RSW's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Age and Tenure

6.5yrs

Average Tenure

69.5yo

Average Age

Experienced Board: RSW's board of directors are considered experienced (6.5 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

BuyUK£29,81623 Oct 18
William Lee
EntityIndividual
Role
Chief Executive Officer
Chief Executive
Shares800
Max PriceUK£37.27

Ownership Breakdown


Management Team

  • David Deer (81yo)

    Co-Founder

    • Tenure: 0yrs
    • Compensation: UK£458.00k
  • David McMurtry (79yo)

    Co-Founder

    • Tenure: 0yrs
    • Compensation: UK£703.00k
  • Allen C. Roberts (70yo)

    Group Finance Director

    • Tenure: 39yrs
    • Compensation: UK£491.00k
  • Dave Wallace (48yo)

    GM of CMM Products Dvision

    • Tenure: 11.8yrs
  • Leo Somerville (61yo)

    Member of Executive Board

    • Tenure: 15.8yrs
  • Jean-Marc Meffre (65yo)

    Member of Executive Board

    • Tenure: 0yrs
  • Mark Moloney

    Member of the Executive Board

    • Tenure: 1.7yrs
  • Will Lee

    Chief Executive

    • Tenure: 1.7yrs
    • Compensation: UK£653.00k
  • Mark Noble

    General Counsel & Company Secretary

    • Tenure: 1.8yrs
  • Gareth Hankins

    Director of Group Manufacturing Services Division & Member of the Executive Board

    • Tenure: 1.7yrs

Board Members

  • David Deer (81yo)

    Co-Founder

    • Tenure: 0yrs
    • Compensation: UK£458.00k
  • Carol Chesney (56yo)

    Non-Executive Director

    • Tenure: 7yrs
    • Compensation: UK£55.00k
  • David McMurtry (79yo)

    Co-Founder

    • Tenure: 0yrs
    • Compensation: UK£703.00k
  • Allen C. Roberts (70yo)

    Group Finance Director

    • Tenure: 39yrs
    • Compensation: UK£491.00k
  • John Jeans (69yo)

    Non-Executive Director

    • Tenure: 6.5yrs
    • Compensation: UK£56.00k
  • Catherine Glickman (61yo)

    Non-Executive Director

    • Tenure: 1.2yrs
  • David Grant (71yo)

    Senior Independent Director

    • Tenure: 0yrs
    • Compensation: UK£55.00k
  • Sean Hymas (53yo)

    President & Representative Director of Renishaw KK

    • Tenure: 0yrs
  • Will Lee

    Chief Executive

    • Tenure: 1.7yrs
    • Compensation: UK£653.00k

Company Information

Renishaw plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Renishaw plc
  • Ticker: RSW
  • Exchange: LSE
  • Founded: 1973
  • Industry: Electronic Equipment and Instruments
  • Sector: Tech
  • Market Cap: UK£2.364b
  • Shares outstanding: 72.78m
  • Website: https://www.renishaw.com

Number of Employees


Location

  • Renishaw plc
  • New Mills
  • Wotton-under-Edge
  • Gloucestershire
  • GL12 8JR
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RSWLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
REWDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
RNSH.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
RSWLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
RNSH.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDAug 2013

Biography

Renishaw plc, an engineering and scientific technology company, designs, manufactures, distributes, sells, and services metrology and healthcare products worldwide. The company offers metrology products, i ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/18 20:32
End of Day Share Price2019/10/18 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.