NZSE:OCA

Stock Analysis Report

Executive Summary

Oceania Healthcare Limited owns and operates various age care centers and retirement villages in New Zealand.

Rewards

Trading at 39.4% below its fair value

Earnings are forecast to grow 18.85% per year

Risk Analysis

Has a high level of debt

Unstable dividend track record

Large one-off items impacting financial results

Profit margins (24%) are lower than last year (41.9%)



Snowflake Analysis

Very undervalued with moderate growth potential.

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

0%

OCA

1.2%

NZ Healthcare

0.2%

NZ Market


1 Year Return

-0.9%

OCA

26.1%

NZ Healthcare

21.5%

NZ Market

Return vs Industry: OCA underperformed the NZ Healthcare industry which returned 26.1% over the past year.

Return vs Market: OCA underperformed the NZ Market which returned 21.5% over the past year.


Shareholder returns

OCAIndustryMarket
7 Day0%1.2%0.2%
30 Day3.8%6.3%2.4%
90 Day6.9%13.8%3.3%
1 Year3.7%-0.9%29.6%26.1%26.5%21.5%
3 Yearn/a74.5%61.1%62.7%41.2%
5 Yearn/a121.5%96.1%95.2%51.7%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

39.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: OCA (NZ$1.09) is trading below our estimate of fair value (NZ$1.8)

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


Price To Earnings Ratio

PE vs Industry: OCA is good value based on its PE Ratio (14.5x) compared to the Healthcare industry average (18x).

PE vs Market: OCA is good value based on its PE Ratio (14.5x) compared to the NZ market (20.1x).


Price to Earnings Growth Ratio

PEG Ratio: OCA is good value based on its PEG Ratio (0.8x)


Price to Book Ratio

PB vs Industry: OCA is good value based on its PB Ratio (1.1x) compared to the NZ Healthcare industry average (1.1x).


Next Steps

Future Growth

How is Oceania Healthcare forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

18.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: OCA's forecast earnings growth (18.9% per year) is above the savings rate (1.3%).

Earnings vs Market: OCA's earnings (18.9% per year) are forecast to grow faster than the NZ market (7.9% per year).

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

Revenue vs Market: OCA's revenue (5% per year) is forecast to grow faster than the NZ market (5% per year).

High Growth Revenue: OCA's revenue (5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: OCA's Return on Equity is forecast to be low in 3 years time (7.8%).


Next Steps

Past Performance

How has Oceania Healthcare performed over the past 5 years?

26.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: OCA has a large one-off gain of NZ$31.4M impacting its May 31 2019 financial results.

Growing Profit Margin: OCA's current net profit margins (24%) are lower than last year (41.9%).


Past Earnings Growth Analysis

Earnings Trend: OCA has become profitable over the past 5 years, growing earnings by 26.3% per year.

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

Earnings vs Industry: OCA had negative earnings growth (-41.1%) over the past year, making it difficult to compare to the Healthcare industry average (-14.4%).


Return on Equity

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


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Oceania Healthcare's financial position?


Financial Position Analysis

Short Term Liabilities: OCA's short term assets (NZ$66.3M) do not cover its short term liabilities (NZ$80.9M).

Long Term Liabilities: OCA's short term assets (NZ$66.3M) do not cover its long term liabilities (NZ$708.6M).


Debt to Equity History and Analysis

Debt Level: OCA's debt to equity ratio (43.8%) is considered high.

Reducing Debt: OCA's debt to equity ratio has reduced from 439.5% to 43.8% over the past 5 years.

Debt Coverage: OCA's debt is well covered by operating cash flow (33.4%).

Interest Coverage: OCA's interest payments on its debt are well covered by EBIT (10.1x coverage).


Balance Sheet

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

Debt Coverage by Assets: OCA's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

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

4.31%

Current Dividend Yield


Dividend Yield vs Market

company4.3%marketbottom25%3.0%markettop25%5.5%industryaverage2.1%forecastin3Years4.7%

Current dividend yield vs market & industry

Notable Dividend: OCA's dividend (4.31%) is higher than the bottom 25% of dividend payers in the NZ market (2.95%).

High Dividend: OCA's dividend (4.31%) is low compared to the top 25% of dividend payers in the NZ market (5.54%).


Stability and Growth of Payments

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

Growing Dividend: OCA's dividend payments have increased, but the company has only paid a dividend for 2 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (62.6%), OCA's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: OCA's dividends in 3 years are forecast to be covered by earnings (55% payout ratio).


Next Steps

Management

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

3.0yrs

Average board tenure


CEO

Earl Gasparich 0

5.9yrs

Tenure

NZ$781,147

Compensation

Mr. Earl Gasparich, BCom, LLB (Hons), FCA (Chartered Accountants New Zealand & Australia), has been the Chief Executive Officer at Oceania Healthcare Limited since 2014. Mr. Gasparich served as Chief Finan ...


CEO Compensation Analysis

Compensation vs Market: Earl's total compensation ($USD514.76K) is about average for companies of similar size in the NZ market ($USD643.16K).

Compensation vs Earnings: Earl's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Board Age and Tenure

3.0yrs

Average Tenure

Experienced Board: OCA's board of directors are considered experienced (3 years average tenure).


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

BuyNZ$20,40011 Sep 19
Alan Isaac
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares20,000
Max PriceNZ$1.02
BuyNZ$553,54518 Aug 19
Tomlinson Group Investments Limited
EntityCompany
Shares542,692
Max PriceNZ$1.02
BuyNZ$819,99911 Aug 19
Tomlinson Group Investments Limited
EntityCompany
Shares800,000
Max PriceNZ$1.02
BuyNZ$51,10015 Apr 19
Elizabeth Coutts
EntityIndividual
Role
Chairman of the Board
Independent Chairperson
Shares50,000
Max PriceNZ$1.02
BuyNZ$41,60013 Mar 19
Alan Isaac
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares40,000
Max PriceNZ$1.04
BuyNZ$22,00010 Mar 19
Sally Evans
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares20,000
Max PriceNZ$1.10

Ownership Breakdown

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


Management Team

  • Matthew Ward

    Chief Financial Officer

    • Tenure: 10.9yrs
  • Earl Gasparich

    Chief Executive Officer

    • Tenure: 5.9yrs
    • Compensation: NZ$781.15k
  • Jill Birch

    General Manager of Sales

    • Tenure: 0yrs
  • Anna Thorburn

    General Counsel & Company Secretary

    • Tenure: 0yrs

Board Members

  • Liz Coutts (60yo)

    Independent Chairperson

    • Tenure: 5.1yrs
    • Compensation: NZ$180.00k
  • Patrick McCawe

    Non-Executive Director

    • Tenure: 2.8yrs
    • Compensation: NZ$90.00k
  • Alan Isaac

    Independent Director

    • Tenure: 4.2yrs
    • Compensation: NZ$110.00k
  • Dame Kerry Prendergast

    Independent Director

    • Tenure: 3yrs
    • Compensation: NZ$105.00k
  • Greg Tomlinson

    Non-Executive Director

    • Tenure: 1.8yrs
    • Compensation: NZ$90.00k
  • Hugh FitzSimons

    Non-Executive Director

    • Tenure: 7.2yrs
    • Compensation: NZ$90.00k
  • Sally Evans (61yo)

    Independent Non-Executive Director

    • Tenure: 1.8yrs
    • Compensation: NZ$97.50k

Company Information

Oceania Healthcare Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Oceania Healthcare Limited
  • Ticker: OCA
  • Exchange: NZSE
  • Founded: 2005
  • Industry: Health Care Facilities
  • Sector: Healthcare
  • Market Cap: NZ$665.301m
  • Shares outstanding: 610.37m
  • Website: https://www.oceaniahealthcare.co.nz

Number of Employees


Location

  • Oceania Healthcare Limited
  • Affinity House
  • 2 Hargreaves Street
  • Auckland
  • 1011
  • New Zealand

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
OCAASX (Australian Securities Exchange)YesOrdinary SharesAUAUDMay 2017
OCANZSE (New Zealand Stock Exchange)YesOrdinary SharesNZNZDMay 2017
OCACHIA (Chi-X Australia)YesOrdinary SharesAUAUDMay 2017

Biography

Oceania Healthcare Limited owns and operates various age care centers and retirement villages in New Zealand. The company operates through Care Operations, Village Operations, and Other segments. It provid ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/13 10:44
End of Day Share Price2019/12/12 00:00
Earnings2019/05/31
Annual Earnings2019/05/31


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.