LSE:CNA

Stock Analysis Report

Executive Summary

Centrica plc operates as an integrated energy company in the United Kingdom, the Republic of Ireland, Germany, Norway, rest of Europe, the United States, Canada, and internationally.

Rewards

Trading at 82.5% below its fair value

Earnings are forecast to grow 31.49% per year

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 14.78% is not well covered by earnings



Snowflake Analysis

Reasonable growth potential second-rate dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

2.8%

CNA

1.8%

GB Integrated Utilities

0.5%

GB Market


1 Year Return

-40.9%

CNA

11.4%

GB Integrated Utilities

7.0%

GB Market

Return vs Industry: CNA underperformed the UK Integrated Utilities industry which returned 11.4% over the past year.

Return vs Market: CNA underperformed the UK Market which returned 7% over the past year.


Shareholder returns

CNAIndustryMarket
7 Day2.8%1.8%0.5%
30 Day10.5%2.7%-0.3%
90 Day8.6%5.2%0.4%
1 Year-34.3%-40.9%17.1%11.4%12.6%7.0%
3 Year-52.5%-62.9%40.2%18.3%18.7%3.6%
5 Year-56.6%-69.5%16.8%-10.1%41.8%9.3%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CNA (£0.81) is trading below our estimate of fair value (£4.65)

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


Price To Earnings Ratio

PE vs Industry: CNA is unprofitable, so we can't compare its PE Ratio to the Integrated Utilities industry average.

PE vs Market: CNA is unprofitable, so we can't compare its PE Ratio to the UK market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate CNA's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: CNA is overvalued based on its PB Ratio (2.2x) compared to the XE Integrated Utilities industry average (1.9x).


Next Steps

Future Growth

How is Centrica forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

31.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CNA is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (0.5%).

Earnings vs Market: CNA is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: CNA's is expected to become profitable in the next 3 years.

Revenue vs Market: CNA's revenue (0.2% per year) is forecast to grow slower than the UK market (3.6% per year).

High Growth Revenue: CNA's revenue (0.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CNA's Return on Equity is forecast to be high in 3 years time (20.7%)


Next Steps

Past Performance

How has Centrica performed over the past 5 years?

22.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CNA is currently unprofitable.

Growing Profit Margin: CNA is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: CNA is unprofitable, but has reduced losses over the past 5 years at a rate of 22.6% per year.

Accelerating Growth: Unable to compare CNA's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: CNA is unprofitable, making it difficult to compare its past year earnings growth to the Integrated Utilities industry (-4%).


Return on Equity

High ROE: CNA has a negative Return on Equity (-18.17%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Centrica's financial position?


Financial Position Analysis

Short Term Liabilities: CNA's short term assets (£7.0B) do not cover its short term liabilities (£7.8B).

Long Term Liabilities: CNA's short term assets (£7.0B) do not cover its long term liabilities (£8.3B).


Debt to Equity History and Analysis

Debt Level: CNA's debt to equity ratio (162.9%) is considered high.

Reducing Debt: CNA's debt to equity ratio has increased from 123.1% to 162.9% over the past 5 years.

Debt Coverage: CNA's debt is well covered by operating cash flow (26.7%).

Interest Coverage: CNA is unprofitable, therefore interest payments are not well covered by earnings.


Balance Sheet

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

Debt Coverage by Assets: CNA's debt is covered by short term assets (assets are 1.5x debt).


Next Steps

Dividend

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

14.78%

Current Dividend Yield


Dividend Yield vs Market

company14.8%marketbottom25%1.9%markettop25%5.2%industryaverage4.6%forecastin3Years6.4%

Current dividend yield vs market & industry

Notable Dividend: CNA's dividend (14.78%) is higher than the bottom 25% of dividend payers in the UK market (1.95%).

High Dividend: CNA's dividend (14.78%) is in the top 25% of dividend payers in the UK market (5.2%)


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: CNA is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: CNA's dividends in 3 years are forecast to be covered by earnings (51.8% payout ratio).


Next Steps

Management

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

3.1yrs

Average management tenure


CEO

Iain Conn (56yo)

4.9yrs

Tenure

UK£2,416,000

Compensation

Mr. Iain C. Conn has been the Group Chief Executive of Centrica plc since January 1, 2015. Mr. Conn serves as the Chief executive of Refining & Marketing at BP Zambia plc. He served as Chief executive Offi ...


CEO Compensation Analysis

Compensation vs Market: Iain's total compensation ($USD3.18M) is about average for companies of similar size in the UK market ($USD3.56M).

Compensation vs Earnings: Iain's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

3.1yrs

Average Tenure

53yo

Average Age

Experienced Management: CNA's management team is considered experienced (3.1 years average tenure).


Board Age and Tenure

2.1yrs

Average Tenure

56.5yo

Average Age

Experienced Board: CNA's board of directors are not considered experienced ( 2.1 years average tenure), which suggests a new board.


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£123,11025 Feb 19
Iain Conn
EntityIndividual
Role
Chief Executive Officer
Group CEO & Executive Director
Shares100,000
Max PriceUK£1.23

Ownership Breakdown

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


Management Team

  • Iain Conn (56yo)

    Group CEO & Executive Director

    • Tenure: 4.9yrs
    • Compensation: UK£2.42m
  • Justine Campbell (48yo)

    Group General Counsel & Company Secretary

    • Tenure: 0.7yrs
  • Richard Hookway

    Chief Executive of Centrica Business & Director

    • Tenure: 1yrs
    • Compensation: UK£206.00k
  • Sarwjit Sambhi

    CEO of Centrica Consumer & Executive Director

    • Tenure: 0.8yrs
  • Jill Shedden (53yo)

    Group Director of Human Resources

    • Tenure: 8.4yrs
  • Mike Young

    Group Chief Information Officer

    • Tenure: 3.1yrs
  • Jeff Bell

    Financial Advisor

    • Tenure: 1.2yrs
    • Compensation: UK£1.24m
  • Charles Cameron

    Director of Technology & Engineering and Centrica Innovations

    • Tenure: 3.9yrs
  • Martyn Espley

    Head of Investor Relations

    • Tenure: 0yrs
  • Chris O’Shea

    Group CFO & Executive Director

    • Tenure: 1.1yrs
    • Compensation: UK£394.00k

Board Members

  • Charles Berry (67yo)

    Independent Chairman of the Board

    • Tenure: 0.8yrs
    • Compensation: UK£12.00k
  • Stephen A. Hester (58yo)

    Senior Independent Director

    • Tenure: 3.2yrs
    • Compensation: UK£93.00k
  • Iain Conn (56yo)

    Group CEO & Executive Director

    • Tenure: 4.9yrs
    • Compensation: UK£2.42m
  • Steve Pusey (57yo)

    Non-Executive Director

    • Tenure: 4.7yrs
    • Compensation: UK£93.00k
  • Kevin O'Byrne (54yo)

    Non-Executive Director

    • Tenure: 0.6yrs
  • Jonathan Wheway (53yo)

    Non-Executive Director

    • Tenure: 3.6yrs
    • Compensation: UK£93.00k
  • Richard Hookway

    Chief Executive of Centrica Business & Director

    • Tenure: 1yrs
    • Compensation: UK£206.00k
  • Sarwjit Sambhi

    CEO of Centrica Consumer & Executive Director

    • Tenure: 0.8yrs
  • Carlos Pascual

    Non-Executive Director

    • Tenure: 4.9yrs
    • Compensation: UK£73.00k
  • Chris O’Shea

    Group CFO & Executive Director

    • Tenure: 1.1yrs
    • Compensation: UK£394.00k

Company Information

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


Key Information

  • Name: Centrica plc
  • Ticker: CNA
  • Exchange: LSE
  • Founded: 1995
  • Industry: Multi-Utilities
  • Sector: Utilities
  • Market Cap: UK£4.720b
  • Shares outstanding: 5.81b
  • Website: https://www.centrica.com

Number of Employees


Location

  • Centrica plc
  • Millstream
  • Maidenhead Road
  • Windsor
  • Berkshire
  • SL4 5GD
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CPYY.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDFeb 1997
CNALSE (London Stock Exchange)YesOrdinary SharesGBGBPFeb 1997
CENBDB (Deutsche Boerse AG)YesOrdinary SharesDEEURFeb 1997
CNALBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPFeb 1997
CPYY.YOTCPK (Pink Sheets LLC)SPON ADR NEWUSUSDJan 1999

Biography

Centrica plc operates as an integrated energy company in the United Kingdom, the Republic of Ireland, Germany, Norway, rest of Europe, the United States, Canada, and internationally. The company operates t ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/11 20:31
End of Day Share Price2019/12/11 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.