OTCPK:BAES.Y

Stock Analysis Report

Executive Summary

BAE Systems plc provides defense, aerospace, and security solutions worldwide.


Snowflake Analysis

Outstanding track record established dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

2.4%

BAES.Y

-3.2%

US Aerospace & Defense

-4.2%

US Market


1 Year Return

33.3%

BAES.Y

21.3%

US Aerospace & Defense

14.0%

US Market

Return vs Industry: BAES.Y exceeded the US Aerospace & Defense industry which returned 21.3% over the past year.

Return vs Market: BAES.Y exceeded the US Market which returned 14% over the past year.


Shareholder returns

BAES.YIndustryMarket
7 Day2.4%-3.2%-4.2%
30 Day0.8%-2.6%-1.8%
90 Day13.4%2.6%2.6%
1 Year35.5%33.3%23.4%21.3%16.3%14.0%
3 Year17.3%7.9%47.5%39.9%43.2%34.0%
5 Year22.7%4.1%87.7%70.1%65.9%47.6%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

41.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: BAES.Y ($33.89) is trading below our estimate of fair value ($57.74)

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


Price To Earnings Ratio

PE vs Industry: BAES.Y is good value based on its PE Ratio (14.4x) compared to the Aerospace & Defense industry average (20.2x).

PE vs Market: BAES.Y is good value based on its PE Ratio (14.4x) compared to the US market (17.7x).


Price to Earnings Growth Ratio

PEG Ratio: BAES.Y is poor value based on its PEG Ratio (4.3x)


Price to Book Ratio

PB vs Industry: BAES.Y is overvalued based on its PB Ratio (3.9x) compared to the US Aerospace & Defense industry average (2.8x).


Next Steps

Future Growth

How is BAE Systems forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

3.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BAES.Y's forecast earnings growth (3.3% per year) is above the savings rate (1.7%).

Earnings vs Market: BAES.Y's earnings (3.3% per year) are forecast to grow slower than the US market (13.1% per year).

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

Revenue vs Market: BAES.Y's revenue (7% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: BAES.Y's revenue (7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: BAES.Y's Return on Equity is forecast to be high in 3 years time (24.5%)


Next Steps

Past Performance

How has BAE Systems performed over the past 5 years?

10.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BAES.Y has high quality earnings.

Growing Profit Margin: BAES.Y's current net profit margins (8.1%) are higher than last year (5.9%).


Past Earnings Growth Analysis

Earnings Trend: BAES.Y's earnings have grown by 10.6% per year over the past 5 years.

Accelerating Growth: BAES.Y's earnings growth over the past year (47.6%) exceeds its 5-year average (10.6% per year).

Earnings vs Industry: BAES.Y earnings growth over the past year (47.6%) exceeded the Aerospace & Defense industry 8.1%.


Return on Equity

High ROE: BAES.Y's Return on Equity (27.8%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is BAE Systems's financial position?


Financial Position Analysis

Short Term Liabilities: BAES.Y's short term assets (£9.2B) exceed its short term liabilities (£9.1B).

Long Term Liabilities: BAES.Y's short term assets (£9.2B) do not cover its long term liabilities (£11.0B).


Debt to Equity History and Analysis

Debt Level: BAES.Y's debt to equity ratio (61.6%) is considered high.

Reducing Debt: BAES.Y's debt to equity ratio has reduced from 178.7% to 61.6% over the past 5 years.

Debt Coverage: BAES.Y's debt is well covered by operating cash flow (47%).

Interest Coverage: BAES.Y's interest payments on its debt are well covered by EBIT (8x coverage).


Balance Sheet

Inventory Level: BAES.Y has a low level of unsold assets or inventory.

Debt Coverage by Assets: BAES.Y's debt is covered by short term assets (assets are 2.7x debt).


Next Steps

Dividend

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

3.47%

Current Dividend Yield


Dividend Yield vs Market

company3.5%marketbottom25%1.5%markettop25%3.8%industryaverage1.7%forecastin3Years3.8%

Current dividend yield vs market & industry

Notable Dividend: BAES.Y's dividend (3.47%) is higher than the bottom 25% of dividend payers in the US market (1.48%).

High Dividend: BAES.Y's dividend (3.47%) is low compared to the top 25% of dividend payers in the US market (3.77%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (50%), BAES.Y's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: BAES.Y's dividends in 3 years are forecast to be well covered by earnings (48.2% payout ratio).


Next Steps

Management

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

2.6yrs

Average management tenure


CEO

Charles Woodburn (47yo)

2.6yrs

Tenure

UK£2,416,000

Compensation

Dr. Charles Woodburn has been the Group Chief Executive of BAE Systems plc since July 1, 2017 and as its Executive Director since May 9, 2016. Dr. Woodburn served as the Chief Operating Officer of BAE Syst ...


CEO Compensation Analysis

Compensation vs Market: Charles's total compensation ($USD3.12M) is below average for companies of similar size in the US market ($USD10.82M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Charles Woodburn
Group CEO & Executive Director2.6yrsUK£2.42m0.028% £7.6m
Peter Lynas
Group Finance Director & Executive Director8.8yrsUK£1.93m0.010% £2.8m
Gerard DeMuro
Executive Director & CEO of BAE Systems6yrsUK£3.20m0.016% £4.4m
Ben Hudson
Chief Technology Officer0yrsno datano data
Martin Cooper
Investor Relations Director0yrsno datano data
Philip Bramwell
Group General Counsel8.7yrsno datano data
Mark Phillips
Group Communications Director1.1yrsno datano data
Neils Petersen
Chief of Staff and Executive Vice President of Marketing Operations0yrsno datano data
Karin Hoeing
Group Human Resources Director2yrsno datano data
Rolf Rue
Regional Managing Director of New Strategic Markets0yrsno datano data

2.6yrs

Average Tenure

62yo

Average Age

Experienced Management: BAES.Y's management team is considered experienced (2.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Charles Woodburn
Group CEO & Executive Director2.6yrsUK£2.42m0.028% £7.6m
Peter Lynas
Group Finance Director & Executive Director8.8yrsUK£1.93m0.010% £2.8m
Gerard DeMuro
Executive Director & CEO of BAE Systems6yrsUK£3.20m0.016% £4.4m
Philip Bramwell
Group General Counsel8.7yrsno datano data
Michael Rouse
Group Marketing Director and Director of BAE Systems Inc0yrsno datano data
Paula G. Reynolds
Independent Non-Executive Director8.8yrsUK£141.00k0.00079% £215.8k
Roger Carr
Chairman6yrsUK£700.00k0.0039% £1.1m
Earl Cairns
Chairman of Advisory Board on Tanzania8.7yrsno datano data
Nicholas Rose
Senior Independent Director7.1yrsUK£140.00k0.0017% £469.8k
Michael Chertoff
Chairman of BAE Systems0yrsno datano data

7.9yrs

Average Tenure

62.5yo

Average Age

Experienced Board: BAES.Y's board of directors are considered experienced (7.9 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

BAE Systems plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: BAE Systems plc
  • Ticker: BAES.Y
  • Exchange: OTCPK
  • Founded: 1979
  • Industry: Aerospace and Defense
  • Sector: Capital Goods
  • Market Cap: UK£21.132b
  • Listing Market Cap: UK£27.316b
  • Shares outstanding: 3.20b
  • Website: https://www.baesystems.com

Number of Employees


Location

  • BAE Systems plc
  • 6 Carlton Gardens
  • London
  • Greater London
  • SW1Y 5AD
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
BAES.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
BA.LSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
BSPDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
BSPXTRA (XETRA Trading Platform)YesOrdinary SharesDEEURJan 1992
BALBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
BA1 NBMV (Bolsa Mexicana de Valores)YesOrdinary SharesMXMXNJan 1992
BAES.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDNov 1998

Biography

BAE Systems plc provides defense, aerospace, and security solutions worldwide. The company operates through five segments: Electronic Systems, Cyber & Intelligence, Platforms & Services (US), Air, and Maritime. The Electronic Systems segment offers electronic warfare systems and electro-optical sensors, military and commercial digital engine and flight controls, precision guidance and seeker solutions, military communication systems and data links, persistent surveillance systems, and hybrid electric drive systems. The Cyber & Intelligence segment provides solutions to modernize, maintain, and test cyber-harden aircraft, radars, missile systems, and mission applications that detect and deter threats to national security; systems engineering, integration, and sustainment services for C4ISR systems and enterprise IT networks; and solutions to enhance the collection, analysis, and processing of data across the US civilian and military intelligence communities. It also offers data intelligence solutions to defend against national-scale threats, protect their networks, data against attacks; security and intelligence solutions to the UK government and allied international governments; anti-fraud and regulatory compliance solutions; and security advisory and managed security services. The Platforms & Services (US) segment manufactures combat vehicles, weapons, and munitions, as well as provides ship repair services and the management of government-owned munitions facilities. The Air segment develops, manufactures, upgrades, and supports combat and jet trainer aircraft. The Maritime segment designs, manufactures, and supports surface ships, submarines, torpedoes, radars, and command and combat systems. It also supplies naval gun system; and provides ammunitions, precision munitions, artillery systems, and missile launchers. BAE Systems plc was incorporated in 1979 and is based in London, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/25 00:35
End of Day Share Price2020/02/24 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.