NZSE:FCG

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Market Cap

NZ$5.1b

Last Updated

2021/06/24 07:00 UTC

Data Sources

Company Financials

Executive Summary

Fonterra Co-operative Group Limited, together with its subsidiaries, collects, manufactures, and sells milk and milk-derived products. More Details


Snowflake Analysis

Undervalued with proven track record.


Similar Companies

Share Price & News

How has Fonterra Co-operative Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FCG is more volatile than 90% of NZ stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: FCG's weekly volatility (8%) has been stable over the past year, but is still higher than 75% of NZ stocks.


Market Performance


7 Day Return

12.1%

FCG

6.0%

NZ Food

0.4%

NZ Market


1 Year Return

-15.3%

FCG

-46.2%

NZ Food

12.2%

NZ Market

Return vs Industry: FCG exceeded the NZ Food industry which returned -46.2% over the past year.

Return vs Market: FCG underperformed the NZ Market which returned 12.2% over the past year.


Shareholder returns

FCGIndustryMarket
7 Day12.1%6.0%0.4%
30 Day-7.6%2.9%1.1%
90 Day-36.0%-25.0%-0.3%
1 Year-13.4%-15.3%-45.7%-46.2%15.3%12.2%
3 Year-39.8%-41.2%-40.5%-42.4%37.2%20.6%
5 Year-34.6%-42.1%14.8%1.2%79.8%38.2%

Long-Term Price Volatility Vs. Market

How volatile is Fonterra Co-operative Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Fonterra Co-operative Group undervalued compared to its fair value and its price relative to the market?

27.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: FCG (NZ$3.16) is trading below our estimate of fair value (NZ$4.36)

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


Price To Earnings Ratio

PE vs Industry: FCG is good value based on its PE Ratio (9.8x) compared to the NZ Food industry average (18.1x).

PE vs Market: FCG is good value based on its PE Ratio (9.8x) compared to the NZ market (22.5x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: FCG is good value based on its PB Ratio (0.7x) compared to the NZ Food industry average (1x).


Future Growth

How is Fonterra Co-operative Group forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

26.6%

Forecasted Food, Beverage & Tobacco 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 Fonterra Co-operative Group 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.


Past Performance

How has Fonterra Co-operative Group performed over the past 5 years?

-17.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FCG has high quality earnings.

Growing Profit Margin: FCG's current net profit margins (2.6%) are higher than last year (2.3%).


Past Earnings Growth Analysis

Earnings Trend: FCG's earnings have declined by 17.3% per year over the past 5 years.

Accelerating Growth: FCG's earnings growth over the past year (12%) exceeds its 5-year average (-17.3% per year).

Earnings vs Industry: FCG earnings growth over the past year (12%) exceeded the Food industry 1.2%.


Return on Equity

High ROE: FCG's Return on Equity (7.4%) is considered low.


Financial Health

How is Fonterra Co-operative Group's financial position?


Financial Position Analysis

Short Term Liabilities: FCG's short term assets (NZ$10.3B) exceed its short term liabilities (NZ$7.1B).

Long Term Liabilities: FCG's short term assets (NZ$10.3B) exceed its long term liabilities (NZ$5.7B).


Debt to Equity History and Analysis

Debt Level: FCG's debt to equity ratio (78.3%) is considered high.

Reducing Debt: FCG's debt to equity ratio has reduced from 109.1% to 78.3% over the past 5 years.

Debt Coverage: FCG's debt is not well covered by operating cash flow (19.1%).

Interest Coverage: FCG's interest payments on its debt are well covered by EBIT (3.5x coverage).


Balance Sheet


Dividend

What is Fonterra Co-operative Group current dividend yield, its reliability and sustainability?

3.16%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: FCG's dividend (3.16%) is higher than the bottom 25% of dividend payers in the NZ market (2.33%).

High Dividend: FCG's dividend (3.16%) is low compared to the top 25% of dividend payers in the NZ market (4.62%).


Stability and Growth of Payments

Stable Dividend: FCG has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: FCG has only been paying a dividend for 8 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (30.9%), FCG'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

How experienced are the management team and are they aligned to shareholders interests?

3.4yrs

Average management tenure


CEO

Miles Hurrell

2.83yrs

Tenure

NZ$2,008,500

Compensation

Mr. Miles Hurrell serves as Chief Executive Officer of Fonterra Co-Operative Group Ltd since March 2019. He served as Interim Chief Executive Officer at Fonterra Co-Operative Group Ltd. from August 15, 201...


CEO Compensation Analysis

Compensation vs Market: Miles's total compensation ($USD1.42M) is about average for companies of similar size in the NZ market ($USD1.43M).

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


Leadership Team

Experienced Management: FCG's management team is considered experienced (3.4 years average tenure).


Board Members

Experienced Board: FCG's board of directors are considered experienced (3.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

Fonterra Co-operative Group Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Fonterra Co-operative Group Limited
  • Ticker: FCG
  • Exchange: NZSE
  • Founded: 2001
  • Industry: Packaged Foods and Meats
  • Sector: Food, Beverage & Tobacco
  • Market Cap: NZ$5.098b
  • Shares outstanding: 1.61b
  • Website: https://www.fonterra.com

Number of Employees


Location

  • Fonterra Co-operative Group Limited
  • Fonterra Centre
  • 109 Fanshawe Street
  • Auckland
  • 1010
  • New Zealand

Listings


Biography

Fonterra Co-operative Group Limited, together with its subsidiaries, collects, manufactures, and sells milk and milk-derived products. The company offers milk powders, butter, and cheese products. It also ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/06/24 07:00
End of Day Share Price2021/06/24 00:00
Earnings2021/01/31
Annual Earnings2020/07/31


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.