OM:SKF B

Stock Analysis Report

Executive Summary

AB SKF (publ) offers bearings, seals, condition monitoring, lubrication systems, and services.

Rewards

Trading at 18.9% below its fair value

Earnings are forecast to grow 8.23% per year

Pays a high and reliable dividend of 3.34%

Risk Analysis

No risks detected for SKF B from our risk checks.


Snowflake Analysis

Flawless balance sheet established dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-1.8%

SKF B

-1.0%

SE Machinery

1.4%

SE Market


1 Year Return

17.0%

SKF B

29.2%

SE Machinery

24.1%

SE Market

Return vs Industry: SKF B underperformed the Swedish Machinery industry which returned 29.2% over the past year.

Return vs Market: SKF B underperformed the Swedish Market which returned 24.1% over the past year.


Shareholder returns

SKF BIndustryMarket
7 Day-1.8%-1.0%1.4%
30 Day1.7%-1.0%4.0%
90 Day4.3%9.1%12.1%
1 Year21.6%17.0%33.8%29.2%29.0%24.1%
3 Year22.1%10.3%58.0%32.2%39.8%18.7%
5 Year5.1%-10.8%87.6%46.5%48.2%16.8%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

18.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SKF B (SEK187.25) is trading below our estimate of fair value (SEK230.77)

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


Price To Earnings Ratio

PE vs Industry: SKF B is good value based on its PE Ratio (15.3x) compared to the Machinery industry average (19.3x).

PE vs Market: SKF B is good value based on its PE Ratio (15.3x) compared to the Swedish market (20.2x).


Price to Earnings Growth Ratio

PEG Ratio: SKF B is poor value based on its PEG Ratio (1.9x)


Price to Book Ratio

PB vs Industry: SKF B is good value based on its PB Ratio (2.4x) compared to the SE Machinery industry average (3.5x).


Next Steps

Future Growth

How is AB SKF forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?

8.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SKF B's forecast earnings growth (8.2% per year) is above the savings rate (-0.4%).

Earnings vs Market: SKF B's earnings (8.2% per year) are forecast to grow slower than the Swedish market (8.2% per year).

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

Revenue vs Market: SKF B's revenue (1.5% per year) is forecast to grow slower than the Swedish market (4.7% per year).

High Growth Revenue: SKF B's revenue (1.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SKF B's Return on Equity is forecast to be low in 3 years time (16.1%).


Next Steps

Past Performance

How has AB SKF performed over the past 5 years?

12.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SKF B has high quality earnings.

Growing Profit Margin: SKF B's current net profit margins (6.5%) are lower than last year (8.5%).


Past Earnings Growth Analysis

Earnings Trend: SKF B's earnings have grown by 12.7% per year over the past 5 years.

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

Earnings vs Industry: SKF B had negative earnings growth (-23.7%) over the past year, making it difficult to compare to the Machinery industry average (2.8%).


Return on Equity

High ROE: SKF B's Return on Equity (15.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is AB SKF's financial position?


Financial Position Analysis

Short Term Liabilities: SKF B's short term assets (SEK47.8B) exceed its short term liabilities (SEK23.1B).

Long Term Liabilities: SKF B's short term assets (SEK47.8B) exceed its long term liabilities (SEK33.6B).


Debt to Equity History and Analysis

Debt Level: SKF B's debt to equity ratio (39.8%) is considered satisfactory.

Reducing Debt: SKF B's debt to equity ratio has reduced from 106.9% to 39.8% over the past 5 years.

Debt Coverage: SKF B's debt is well covered by operating cash flow (63.2%).

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


Balance Sheet

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

Debt Coverage by Assets: SKF B's debt is covered by short term assets (assets are 3.2x debt).


Next Steps

Dividend

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

3.34%

Current Dividend Yield


Upcoming Dividend Payment

TodayFeb 22 2020Ex Dividend DateMar 27 2020Dividend Pay DateApr 02 20206 days from Ex DividendBuy in the next 34 days to receive upcoming dividend

Dividend Yield vs Market

Notable Dividend: SKF B's dividend (3.34%) is higher than the bottom 25% of dividend payers in the Swedish market (1.59%).

High Dividend: SKF B's dividend (3.34%) is low compared to the top 25% of dividend payers in the Swedish market (4.14%).


Stability and Growth of Payments

Stable Dividend: SKF B's dividends per share have been stable in the past 10 years.

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (51.2%), SKF B's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SKF B's dividends in 3 years are forecast to be well covered by earnings (41% payout ratio).


Next Steps

Management

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

4.0yrs

Average management tenure


CEO

Alrik Danielson (57yo)

5.1yrs

Tenure

kr19,278,120

Compensation

Mr. Alrik Danielson, B.Sc. (Econ.) has been the Chief Executive Officer and President of SKF AB (now AB SKF (publ)) since January 1, 2015. He served as an Interim CFO of SKF AB from April 30, 2019 to June  ...


CEO Compensation Analysis

Compensation vs Market: Alrik's total compensation ($USD1.98M) is about average for companies of similar size in the Swedish market ($USD1.77M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Alrik Danielson
President5.1yrskr19.28m0.013% SEK11.2m
Niclas Rosenlew
Senior VP & CFO0.7yrsno datano data
Carina van den Berg
Director of Group Controlling & Accounting0yrsno datano data
Victoria Van Camp
CTO and President of Innovation & Business Development0yrsno data0.0039% SEK3.3m
Patrik Stenberg
Head of Investor Relations0yrsno datano data
Carina Bergfelt
General Counsel24.1yrsno data0.0012% SEK1.0m
Kent Viitanen
President of Bearing Operations0yrsno data0.0039% SEK3.3m
Theo Kjellberg
Head of Media Relations & Director of Corporate Communication0yrsno datano data
Luc Graux
Executive Officer4yrsno datano data
Thomas Fröst
President of Industrial Technologies1.1yrsno datano data

4.0yrs

Average Tenure

56yo

Average Age

Experienced Management: SKF B's management team is considered experienced (4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Alrik Danielson
President5.1yrskr19.28m0.013% SEK11.2m
Lars Wedenborn
Director12.1yrskr1.06m0.0025% SEK2.2m
Barbara Samardzich
Independent Director2.9yrskr710.00kno data
Kennet Carlsson
Employee Representative Deputy Director5.1yrsno data0.000020% SEK17.1k
Hock Goh
Independent Director5.9yrskr710.00kno data
Geert Follens
Director0.8yrsno datano data
Colleen Repplier
Independent Director1.9yrskr710.00kno data
Jonny Hilbert
Employee Representative Director5.1yrsno datano data
Zarko Djurovic
Employee Representative Director4.2yrsno datano data
Hans Stråberg
Chairman1.9yrskr2.38m0.0033% SEK2.8m

4.5yrs

Average Tenure

59.5yo

Average Age

Experienced Board: SKF B's board of directors are considered experienced (4.5 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.


Ownership Breakdown

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


Top Shareholders

Company Information

AB SKF (publ)'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: AB SKF (publ)
  • Ticker: SKF B
  • Exchange: OM
  • Founded: 1907
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Market Cap: kr85.308b
  • Shares outstanding: 455.35m
  • Website: https://www.skf.com

Number of Employees


Location

  • AB SKF (publ)
  • Hornsgatan 1
  • Gothenburg
  • Västra Götaland County
  • 415 50
  • Sweden

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SKFR.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDOct 1985
SKUF.FOTCPK (Pink Sheets LLC)YesClass B SharesUSUSDJan 1992
0NWXLSE (London Stock Exchange)YesClass B SharesGBSEKJan 1992
SKF AOM (OMX Nordic Exchange Stockholm)Class A SharesSESEKJan 1992
SKF BOM (OMX Nordic Exchange Stockholm)YesClass B SharesSESEKJan 1992
SKFADB (Deutsche Boerse AG)Class A SharesDEEURJan 1992
SKFBDB (Deutsche Boerse AG)YesClass B SharesDEEURJan 1992
0NWWLSE (London Stock Exchange)Class A SharesGBSEKJan 1992
SKFBSBATS-CHIXE (BATS 'Chi-X Europe')YesClass B SharesGBSEKJan 1992
SKFASBATS-CHIXE (BATS 'Chi-X Europe')Class A SharesGBSEKJan 1992

Biography

AB SKF (publ) offers bearings, seals, condition monitoring, lubrication systems, and services. It operates in two segments, Industrial and Automotive. The company’s products include bearings, units, and housings; seals; lubrication solutions; lubricants; actuation systems, ball and roller screws, linear guides and tables, and engineering tools; magnetic bearings/permanent magnetic electric motors; mechatronic solutions; maintenance products; condition monitoring systems; power transmission products and solutions; coupling systems; test and measurement equipment; and vehicle aftermarket products, such as wheel end, powertrain, driveline, and suspension products. Its services comprise asset management, customer training, engineering consultancy, logistics, mechanical maintenance, and remanufacturing and maintenance services. The company offers its solutions for various industries, including aerospace, agriculture, automation, cars and light trucks, compressors, construction, electric motors, food and beverage, home appliances, industrial fans and pumps, industrial transmissions, machine tools, marine, material handling, medical and health care, metals, mining, mineral processing, ocean energy, oil and gas, portable power tools, power generation, pulp and paper, racing, railways, skates, trucks, trailers and buses, two and three wheelers, and wind energy. AB SKF (publ) markets its products directly, as well as through a network of distributors in North America, Latin America, Europe, the Middle East, Africa, and the Asia Pacific. The company was founded in 1907 and is headquartered in Gothenburg, Sweden. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/21 21:28
End of Day Share Price2020/02/21 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.