TSE:5201

Stock Analysis Report

Executive Summary

AGC Inc. manufactures and sells glass, electronics, chemicals, and ceramics worldwide.

Rewards

Trading at 6.6% below its fair value

Earnings are forecast to grow 15.97% per year

Risk Analysis

Has a high level of debt

Unstable dividend track record



Snowflake Analysis

Adequate balance sheet average dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 5201 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-4.0%

5201

-3.2%

JP Building

-2.2%

JP Market


1 Year Return

6.3%

5201

21.1%

JP Building

9.3%

JP Market

Return vs Industry: 5201 underperformed the JP Building industry which returned 20.3% over the past year.

Return vs Market: 5201 underperformed the JP Market which returned 13% over the past year.


Shareholder returns

5201IndustryMarket
7 Day-4.0%-3.2%-2.2%
30 Day-1.9%-2.0%-2.0%
90 Day8.7%2.1%1.9%
1 Year9.7%6.3%23.7%21.1%12.1%9.3%
3 Year0.7%-7.5%22.0%15.2%20.9%12.8%
5 Year43.7%25.3%64.1%49.0%39.7%25.1%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

6.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 5201 (¥3870) is trading below our estimate of fair value (¥4144.25)

Significantly Below Fair Value: 5201 is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: 5201 is poor value based on its PE Ratio (16x) compared to the Building industry average (13.7x).

PE vs Market: 5201 is poor value based on its PE Ratio (15.9x) compared to the JP market (15.8x).


Price to Earnings Growth Ratio

PEG Ratio: 5201 is poor value based on its PEG Ratio (1x)


Price to Book Ratio

PB vs Industry: 5201 is overvalued based on its PB Ratio (0.8x) compared to the JP Building industry average (0.8x).


Next Steps

Future Growth

How is AGC forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

16.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 5201's forecast earnings growth (16% per year) is above the savings rate (-0.09%).

Earnings vs Market: 5201's earnings (16% per year) are forecast to grow faster than the JP market (9.5% per year).

High Growth Earnings: 5201's earnings are forecast to grow, but not significantly.

Revenue vs Market: 5201's revenue (2% per year) is forecast to grow slower than the JP market (3.7% per year).

High Growth Revenue: 5201's revenue (2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 5201's Return on Equity is forecast to be low in 3 years time (6.1%).


Next Steps

Past Performance

How has AGC performed over the past 5 years?

23.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 5201 has high quality earnings.

Growing Profit Margin: 5201's current net profit margins (3.5%) are lower than last year (4.8%).


Past Earnings Growth Analysis

Earnings Trend: 5201's earnings have grown significantly by 23.6% per year over the past 5 years.

Accelerating Growth: 5201's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 5201 had negative earnings growth (-27.1%) over the past year, making it difficult to compare to the Building industry average (8.7%).


Return on Equity

High ROE: 5201's Return on Equity (5.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is AGC's financial position?


Financial Position Analysis

Short Term Liabilities: 5201's short term assets (¥736.5B) exceed its short term liabilities (¥488.6B).

Long Term Liabilities: 5201's short term assets (¥736.5B) exceed its long term liabilities (¥544.7B).


Debt to Equity History and Analysis

Debt Level: 5201's debt to equity ratio (60.7%) is considered high.

Reducing Debt: 5201's debt to equity ratio has increased from 55.1% to 60.7% over the past 5 years.

Debt Coverage: 5201's debt is well covered by operating cash flow (29.7%).

Interest Coverage: 5201 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 5201 has a high level of physical assets or inventory.

Debt Coverage by Assets: 5201's debt is not covered by short term assets (assets are 1x debt).


Next Steps

Dividend

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

3.09%

Current Dividend Yield


Dividend Yield vs Market

company3.1%marketbottom25%1.3%markettop25%3.0%industryaverage1.8%forecastin3Years3.5%

Current dividend yield vs market & industry

Notable Dividend: 5201's dividend (3.1%) is higher than the bottom 25% of dividend payers in the JP market (1.32%).

High Dividend: 5201's dividend (3.1%) is in the top 25% of dividend payers in the JP market (2.94%)


Stability and Growth of Payments

Stable Dividend: 5201's dividend payments have been volatile in the past 10 years.

Growing Dividend: 5201's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (49.6%), 5201's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

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

4.5yrs

Average management tenure


CEO

Takuya Shimamura (63yo)

5yrs

Tenure

JP¥205,000,000

Compensation

Mr. Takuya Shimamura has been the Chief Executive Officer and President of Asahi Glass Co. Ltd., since January 1, 2015. Mr. Shimamura served as Senior Executive Officer and President of Electronics Company ...


CEO Compensation Analysis

Compensation vs Market: Takuya's total compensation ($USD1.86M) is above average for companies of similar size in the JP market ($USD1.37M).

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


Management Age and Tenure

4.5yrs

Average Tenure

61yo

Average Age

Experienced Management: 5201's management team is considered experienced (4.5 years average tenure).


Board Age and Tenure

2.8yrs

Average Tenure

63yo

Average Age

Experienced Board: 5201's board of directors are not considered experienced ( 2.8 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.


Ownership Breakdown

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


Management Team

  • Jean-François Heris

    Senior Executive Officer & President of Building & Industrial Glass Company

    • Yoshinori Hirai (60yo)

      Executive VP

      • Tenure: 5.8yrs
    • Marehisa Ishiko (61yo)

      Senior Executive Officer & Assistant to CEO

      • Tenure: 9.6yrs
    • Takuya Shimamura (63yo)

      President

      • Tenure: 5yrs
      • Compensation: JP¥205.00m
    • Yoshinori Kobayashi (62yo)

      Senior Executive Officer & President of Automotive Company

      • Shinji Miyaji (61yo)

        CFO, CCO

        • Tenure: 4.8yrs
      • Masao Nemoto

        Executive VP & President of Chemicals Company

        • Junichi Kobayashi

          General Manager of Legal Division

          • Tenure: 3yrs
        • Takashi Misu

          Senior Executive Officer & GM of Human Resources Division

          • Tenure: 4yrs
        • Kazumi Tamaki

          GM - Corporate Communications & IR Office for Corporate Planning Division


          Board Members

          • Yasuchika Hasegawa (73yo)

            Independent Director

            • Tenure: 2.8yrs
          • Akio Sakumiya (67yo)

            Audit & Supervisory Board Member

            • Hiroyuki Yanagi (65yo)

              Independent Director

              • Tenure: 0.8yrs
            • Yoshinori Hirai (60yo)

              Executive VP

              • Tenure: 5.8yrs
            • Kazuhiko Ishimura (65yo)

              Director

              • Tenure: 11.8yrs
              • Compensation: JP¥156.00m
            • Tetsuo Tatsuno (61yo)

              Chairman of Audit & Supervisory Board

              • Tenure: 2yrs
            • Takuya Shimamura (63yo)

              President

              • Tenure: 5yrs
              • Compensation: JP¥205.00m
            • Yoshi Morimoto

              Full Time Audit & Supervisory Board Member

              • Tenure: 0.8yrs
            • Shinji Miyaji (61yo)

              CFO, CCO

              • Tenure: 4.8yrs
            • Masako Egawa (63yo)

              Independent Chairman

              • Tenure: 0.8yrs

            Company Information

            AGC Inc.'s company bio, employee growth, exchange listings and data sources


            Key Information

            • Name: AGC Inc.
            • Ticker: 5201
            • Exchange: TSE
            • Founded: 1907
            • Industry: Building Products
            • Sector: Capital Goods
            • Market Cap: JP¥847.485b
            • Shares outstanding: 221.56m
            • Website: https://www.agc.com

            Number of Employees


            Location

            • AGC Inc.
            • Shin-Marunouchi Building
            • 1-5-1, Marunouchi
            • Tokyo
            • 100-8405
            • Japan

            Listings

            TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
            ASGL.YOTCPK (Pink Sheets LLC)ADRUSUSDJan 1975
            5201TSE (The Tokyo Stock Exchange)YesCommon StockJPJPYJan 1975
            ASGL.FOTCPK (Pink Sheets LLC)YesCommon StockUSUSDJan 1975
            SHJDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1975

            Biography

            AGC Inc. manufactures and sells glass, electronics, chemicals, and ceramics worldwide. The company offers architectural glass products, including laminated, insulating, wired, solar control, toughened, decorative, sound insulation, float and patterned, and industrial glasses; structural glazing systems; and automotive glass, such as laminated, tempered, and privacy glasses, as well as integrated glass antennas, patterned glazing products, and module assembly windows. It also provides glass substrates used for thin-film-transistor liquid crystal displays and OLEDs; synthetic fused silica glass, synthetic quartz crystal, silicon carbide, CMP slurry, through glass Vias, high refractive index glass, DOE diffuser, glass ceramics substrate, optical planar device, IR cut filter, aspherical glass lens, aspherical glass molded lens, micro lens array, and aspherical glass molded lens products; and polycarbonate sheets, thin sheets, and films; and glass frits and paste, as well as glass substrate for semiconductor packaging. In addition, the company offers cover glass for smartphones and tablet devices; glass substrates for photovoltaic devices and touch panels; specialty glass for chemical strengthening; extra clear float glass; transparent conductive oxide glass for a-Si type solar module; and ultra-thin glass for electronics devices. Further, it provides chlor-alkali, urethane, fluoro chemical, and specialty chemical products; high thermal insulation ceramics wall for furnaces; and ceramic beads, sputtering targets, abrasion resistant ceramics, road pavement surface materials, alumina cement, engineering fine ceramics, and ceramics molding agent for 3D printers. Additionally, the company engages in the digital signage on glass, transparent glass screen, and plastic optical fiber businesses. The company was formerly known as Asahi Glass Co., Ltd. and changed its name to AGC Inc. in July 2018. AGC Inc. was founded in 1907 and is headquartered in Tokyo, Japan. 


            Company Analysis and Financial Data Status

            All financial data provided by Standard & Poor's Capital IQ.
            DataLast Updated (UTC time)
            Company Analysis2020/01/28 14:46
            End of Day Share Price2020/01/27 00:00
            Earnings2019/09/30
            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.