OB:GRONG-ME

Stock Analysis Report

Executive Summary

Grong Sparebank, an independent savings bank, provides a range of banking products and services in Norway.

Rewards

Trading at 58.4% below its fair value

Earnings have grown 14.5% per year over the past 5 years

Risk Analysis

Unstable dividend track record

Shareholders have been diluted in the past year

Does not have a meaningful market cap (NOK327M)



Snowflake Analysis

Undervalued with acceptable track record.


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Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

2.8%

GRONG-ME

-0.2%

NO Banks

0.6%

NO Market


1 Year Return

3.7%

GRONG-ME

8.0%

NO Banks

3.4%

NO Market

Return vs Industry: GRONG-ME underperformed the Norwegian Banks industry which returned 10.1% over the past year.

Return vs Market: GRONG-ME matched the Norwegian Market which returned 4.4% over the past year.


Shareholder returns

GRONG-MEIndustryMarket
7 Day2.8%-0.2%0.6%
30 Day3.7%1.7%2.7%
90 Day5.7%3.4%5.9%
1 Year10.9%3.7%13.3%8.0%9.1%3.4%
3 Yearn/a40.7%23.4%34.3%17.7%
5 Yearn/a97.7%56.5%66.1%27.9%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Grong Sparebank 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: GRONG-ME (NOK110) is trading below our estimate of fair value (NOK264.56)

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


Price To Earnings Ratio

PE vs Industry: GRONG-ME is good value based on its PE Ratio (6.1x) compared to the Banks industry average (8.7x).

PE vs Market: GRONG-ME is good value based on its PE Ratio (6.1x) compared to the Norwegian market (14.2x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: GRONG-ME is good value based on its PB Ratio (0.5x) compared to the NO Banks industry average (0.5x).


Next Steps

Future Growth

How is Grong Sparebank forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

1.0%

Forecasted Banks industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Grong Sparebank has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Grong Sparebank performed over the past 5 years?

14.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GRONG-ME has high quality earnings.

Growing Profit Margin: GRONG-ME's current net profit margins (31.1%) are higher than last year (28.8%).


Past Earnings Growth Analysis

Earnings Trend: GRONG-ME's earnings have grown by 14.5% per year over the past 5 years.

Accelerating Growth: GRONG-ME's earnings growth over the past year (11.4%) is below its 5-year average (14.5% per year).

Earnings vs Industry: GRONG-ME earnings growth over the past year (11.4%) underperformed the Banks industry 13%.


Return on Equity

High ROE: GRONG-ME's Return on Equity (7.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Grong Sparebank's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: GRONG-ME has a low level of unsold assets or inventory.

Debt Coverage by Assets: GRONG-ME's debt is not covered by short term assets (assets are 0.1x debt).


Financial Institutions Analysis

Asset Level: GRONG-ME's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if GRONG-ME has a sufficient allowance for bad loans.

Low Risk Liabilities: GRONG-ME's liabilities are made up of primarily low risk sources of funding.

Loan Level: GRONG-ME has an acceptable proportion of non-loan assets held.

Low Risk Deposits: GRONG-ME has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if GRONG-ME has an appropriate level of bad loans.


Next Steps

Dividend

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

6.31%

Current Dividend Yield


Dividend Yield vs Market

company6.3%marketbottom25%2.3%markettop25%5.6%industryaverage4.9%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: GRONG-ME's dividend (6.36%) is higher than the bottom 25% of dividend payers in the Norwegian market (2.4%).

High Dividend: GRONG-ME's dividend (6.36%) is in the top 25% of dividend payers in the Norwegian market (5.71%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, GRONG-ME has been paying a dividend for less than 10 years.

Growing Dividend: GRONG-ME has only been paying a dividend for 2 years, and since then payments have not increased.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (38.8%), GRONG-ME'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 Grong Sparebank's salary, the management and board of directors tenure and is there insider trading?

9.0yrs

Average management tenure


CEO

Jon Solum (53yo)

20yrs

Tenure

kr1,924,000

Compensation

Mr. Jon Håvard Solum has been General Manager at Grong Sparebank since 2000. Mr. Solum serves as Chairman of Nord-Trøndelag Elektrisitetsverk AS. He serves as a Member of Supervisory Board of Eika Forsikri ...


CEO Compensation Analysis

Compensation vs Market: Jon's total compensation ($USD216.74K) is below average for companies of similar size in the Norwegian market ($USD423.16K).

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


Management Age and Tenure

9.0yrs

Average Tenure

Experienced Management: GRONG-ME's management team is seasoned and experienced (9 years average tenure).


Board Age and Tenure

1.8yrs

Average Tenure

Experienced Board: GRONG-ME's board of directors are not considered experienced ( 1.8 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 been diluted in the past year, with total shares outstanding growing by 17.2%.


Management Team

  • Jon Solum (53yo)

    General Manager

    • Tenure: 20yrs
    • Compensation: kr1.92m
  • Johan Trapnes

    Finance Manager

    • Tenure: 3yrs
  • Kårhild Berg

    Bank Manager of Private Market

    • Compensation: kr993.00k
  • Odd Myrvold

    Bank Chief of Corporate Market

    • Tenure: 15yrs
    • Compensation: kr1.29m
  • Ann Klinkenberg

    Head of Department Customer Service & Digital

    • Fredrik Hagen

      Head of Department Mosjøen

      • Torgeir Hanssen

        Head of Division Namsos

        • Endre Skjervø

          Manager of Bank Operations & Deputy Chairman

          • Tenure: 1.7yrs

        Board Members

        • Jo Aunet

          Employee Representative Director

          • Tenure: 1.8yrs
        • Jonny Melting

          Vice Chairman

          • Compensation: kr115.00k
        • Audun Veium

          Chairman of the Board

          • Tenure: 13yrs
        • Jarle Rasmussen

          Director

          • Compensation: kr137.00k
        • Heidi Wang

          Director

          • Compensation: kr71.00k
        • May Båtstrand

          Employee Representative Director

          • Compensation: kr66.00k
        • Arnt Goatbakk

          Deputy Director

          • Compensation: kr46.00k
        • Renathe Nilsen

          Director

          • Tenure: 1.8yrs
        • Christoffer Petersen

          Board Member

          Company Information

          Grong Sparebank's company bio, employee growth, exchange listings and data sources


          Key Information

          • Name: Grong Sparebank
          • Ticker: GRONG-ME
          • Exchange: OB
          • Founded: 1862
          • Industry: Regional Banks
          • Sector: Banks
          • Market Cap: kr329.945m
          • Shares outstanding: 2.97m
          • Website: https://www.grong-sparebank.no

          Location

          • Grong Sparebank
          • Sundspetvegen 2
          • Grong
          • Nord-Trøndelag
          • 7870
          • Norway

          Listings

          TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
          GRONG-MEOB (Oslo Bors)YesShare CapitalNONOKJun 2017

          Biography

          Grong Sparebank, an independent savings bank, provides a range of banking products and services in Norway. It offers payment and card services, credits, VIPPS, and mobile and online banking services; children, auto, death fall, health, building, holiday home, property, income, critical illness, disability, UNG, and other insurance, as well as health policies; car loans, mortgages, loans to other vehicles, and loans and refinancing; and savings and pensions, including share savings accounts, bank and fund savings, BSU, IPS, retirement savings and pensions, and investor services to private customers. The company also provides payment solutions and bank cards, net and mobile banking, billing solutions, and payment terminals; financing solutions, such as bank guarantees, construction loans, overdrafts, leasing, and corporate loans; liability, customer's, cyber, farmhouse agriculture, operating equipment and crop, property, health, landlord, craft, commercial, personal, travel, big car, goods during transport, and occupational injuries insurance, as well as home insurance agriculture solutions; other accounts; and savings and pensions, such as deposit and retirement pensions to small business customers in construction, property, trade and services, and agriculture industries. Grong Sparebank was founded in 1862 and is headquartered in Grong, Norway with branches in Snåsa, Lierne, Mosjøen, Namsos, Steinkjer, and Rørvik. 


          Company Analysis and Financial Data Status

          All financial data provided by Standard & Poor's Capital IQ.
          DataLast Updated (UTC time)
          Company Analysis2020/01/20 22:36
          End of Day Share Price2020/01/20 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.