LSE:NEX

Stock Analysis Report

Executive Summary

National Express Group PLC provides public transport services in the United Kingdom, Continental Europe, North Africa, North America, and the Middle East.

Rewards

PE ratio (16.8x) is below the UK market (18.5x)

Earnings are forecast to grow 4.78% per year

Earnings have grown 16.6% per year over the past 5 years

Risk Analysis

Has a high level of debt

Unstable dividend track record



Snowflake Analysis

Second-rate dividend payer with questionable track record.


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DSV Panalpina

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Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

2.7%

NEX

2.3%

GB Transportation

1.4%

GB Market


1 Year Return

22.8%

NEX

2.7%

GB Transportation

12.4%

GB Market

Return vs Industry: NEX exceeded the UK Transportation industry which returned 3.2% over the past year.

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


Shareholder returns

NEXIndustryMarket
7 Day2.7%2.3%1.4%
30 Day0.4%1.3%2.3%
90 Day2.2%0.3%8.8%
1 Year27.5%22.8%9.5%2.7%18.3%12.4%
3 Year54.0%38.2%30.1%12.0%23.8%8.0%
5 Year116.1%80.9%36.6%11.0%41.8%8.9%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

17.02x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: NEX (£4.65) is trading above our estimate of fair value (£3.36)

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


Price To Earnings Ratio

PE vs Industry: NEX is poor value based on its PE Ratio (16.8x) compared to the Transportation industry average (8.2x).

PE vs Market: NEX is good value based on its PE Ratio (16.8x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: NEX is poor value based on its PEG Ratio (3.5x)


Price to Book Ratio

PB vs Industry: NEX is overvalued based on its PB Ratio (2.2x) compared to the GB Transportation industry average (1.8x).


Next Steps

Future Growth

How is National Express Group forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

4.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NEX's forecast earnings growth (4.8% per year) is above the savings rate (0.5%).

Earnings vs Market: NEX's earnings (4.8% per year) are forecast to grow slower than the UK market (11.7% per year).

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

Revenue vs Market: NEX's revenue (5.3% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: NEX's revenue (5.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NEX's Return on Equity is forecast to be low in 3 years time (16.4%).


Next Steps

Past Performance

How has National Express Group performed over the past 5 years?

16.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NEX has high quality earnings.

Growing Profit Margin: NEX's current net profit margins (5.5%) are lower than last year (5.8%).


Past Earnings Growth Analysis

Earnings Trend: NEX's earnings have grown by 16.6% per year over the past 5 years.

Accelerating Growth: NEX's earnings growth over the past year (2.8%) is below its 5-year average (16.6% per year).

Earnings vs Industry: NEX earnings growth over the past year (2.8%) underperformed the Transportation industry 14.9%.


Return on Equity

High ROE: NEX's Return on Equity (13%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is National Express Group's financial position?


Financial Position Analysis

Short Term Liabilities: NEX's short term assets (£740.8M) do not cover its short term liabilities (£1.6B).

Long Term Liabilities: NEX's short term assets (£740.8M) do not cover its long term liabilities (£1.3B).


Debt to Equity History and Analysis

Debt Level: NEX's debt to equity ratio (120.3%) is considered high.

Reducing Debt: NEX's debt to equity ratio has increased from 78.9% to 120.3% over the past 5 years.

Debt Coverage: NEX's debt is well covered by operating cash flow (24.6%).

Interest Coverage: NEX's interest payments on its debt are well covered by EBIT (4.7x coverage).


Balance Sheet

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

Debt Coverage by Assets: NEX's debt is not covered by short term assets (assets are 0.6x debt).


Next Steps

Dividend

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

3.16%

Current Dividend Yield


Dividend Yield vs Market

company3.2%marketbottom25%1.8%markettop25%5.0%industryaverage7.0%forecastin3Years3.8%

Current dividend yield vs market & industry

Notable Dividend: NEX's dividend (3.19%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: NEX's dividend (3.19%) is low compared to the top 25% of dividend payers in the UK market (4.95%).


Stability and Growth of Payments

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

Growing Dividend: NEX's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (55.5%), NEX's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NEX's dividends in 3 years are forecast to be well covered by earnings (47.5% payout ratio).


Next Steps

Management

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

3.0yrs

Average management tenure


CEO

Dean Finch (52yo)

9.9yrs

Tenure

UK£4,203,000

Compensation

Mr. Dean Finch, B.Sc, MBA, ACA has been the Group Chief Executive Officer and Executive Director at National Express Group plc since February 15, 2010. Mr. Finch served as the Chief Executive Officer of Tu ...


CEO Compensation Analysis

Compensation vs Market: Dean's total compensation ($USD5.47M) is above average for companies of similar size in the UK market ($USD2.25M).

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


Management Age and Tenure

3.0yrs

Average Tenure

Experienced Management: NEX's management team is considered experienced (3 years average tenure).


Board Age and Tenure

4.7yrs

Average Tenure

57yo

Average Age

Experienced Board: NEX's board of directors are considered experienced (4.7 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyUK£20,94728 Nov 19
John Armitt
EntityIndividual
Role
Chairman of the Board
Non-Executive Chairman
Shares4,500
Max PriceUK£4.65
SellUK£22,00925 Jul 19
Matthew Ashley
EntityIndividual
Shares5,048
Max PriceUK£4.36
BuyUK£74,88020 Jun 19
Dean Finch
EntityIndividual
Role
Chief Executive Officer
Group CEO & Executive Director
Shares19,200
Max PriceUK£3.90

Ownership Breakdown

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


Management Team

  • Dean Finch (52yo)

    Group CEO & Executive Director

    • Tenure: 9.9yrs
    • Compensation: UK£4.20m
  • Louise Richardson

    Head of Investor Relations

    • Tom Stables

      Managing Director of UK & Germany

      • Tenure: 7.2yrs
    • Ian Fraser

      Managing Director of Kings Ferry

      • Chris Davies (49yo)

        Group Finance Director & Executive Director

        • Tenure: 2.7yrs
        • Compensation: UK£1.20m
      • Chris Hardy

        Managing Director of Coach

        • Tenure: 3yrs
      • Mike Goddard

        Group Human Resources Director

        • Craig Barker

          Head of Safety - UK Coach

          • Julian Drury

            Managing Director of C2C

            • Paul Thomas

              Managing Director of UK Bus

              • Tenure: 2.7yrs

            Board Members

            • Mike McKeon (62yo)

              Independent Non-Executive Director

              • Tenure: 4.5yrs
              • Compensation: UK£64.00k
            • John Armitt (73yo)

              Non-Executive Chairman

              • Tenure: 6.9yrs
              • Compensation: UK£246.00k
            • Dean Finch (52yo)

              Group CEO & Executive Director

              • Tenure: 9.9yrs
              • Compensation: UK£4.20m
            • Karen Geary (55yo)

              Independent Non-Executive Director

              • Tenure: 0.3yrs
            • Matthew Crummack (49yo)

              Independent Non-Executive Director

              • Tenure: 4.7yrs
              • Compensation: UK£53.00k
            • Ashley Steel (59yo)

              Independent Non-Executive Director

              • Tenure: 4yrs
              • Compensation: UK£53.00k
            • Jorge Cosmen (50yo)

              Non-Executive Deputy Chairman

              • Tenure: 11.3yrs
              • Compensation: UK£53.00k
            • Chris Muntwyler (67yo)

              Independent Non-Executive Director

              • Tenure: 8.7yrs
              • Compensation: UK£72.00k
            • Chris Davies (49yo)

              Group Finance Director & Executive Director

              • Tenure: 2.7yrs
              • Compensation: UK£1.20m
            • Lee Sander (63yo)

              Senior Independent Non Executive Director

              • Compensation: UK£81.00k

            Company Information

            National Express Group PLC's company bio, employee growth, exchange listings and data sources


            Key Information

            • Name: National Express Group PLC
            • Ticker: NEX
            • Exchange: LSE
            • Founded: 1991
            • Industry: Trucking
            • Sector: Transportation
            • Market Cap: UK£2.396b
            • Shares outstanding: 509.75m
            • Website: https://www.nationalexpressgroup.com

            Number of Employees


            Location

            • National Express Group PLC
            • National Express House
            • Birmingham Coach Station
            • Birmingham
            • West Midlands
            • B5 6DD
            • United Kingdom

            Listings

            TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
            NEXLSE (London Stock Exchange)YesOrdinary SharesGBGBPDec 1992
            NXPG.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDDec 1992
            3NADB (Deutsche Boerse AG)YesOrdinary SharesDEEURDec 1992
            NEXLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPDec 1992

            Biography

            National Express Group PLC provides public transport services in the United Kingdom, Continental Europe, North Africa, North America, and the Middle East. The company operates through UK, German Rail, ALSA, and North America segments. It owns and leases buses, coaches, and trains to deliver local, regional, national, and international transportation services. The company also operates urban bus and transit operations; scheduled coach services linking approximately 900 destinations across the United Kingdom; and offers private hire and commuter coach travel services in London and the south of England. In addition, the company operates service areas and other transport-related businesses, such as fuel distribution; and offers student transportation services. National Express Group PLC was incorporated in 1991 and is based in Birmingham, the United Kingdom. 


            Company Analysis and Financial Data Status

            All financial data provided by Standard & Poor's Capital IQ.
            DataLast Updated (UTC time)
            Company Analysis2020/01/17 20:38
            End of Day Share Price2020/01/17 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.