NYSE:SCS

Stock Analysis Report

Executive Summary

Steelcase Inc. manufactures and sells integrated furniture settings, user-centered technologies, and interior architectural products.

Rewards

Trading at 30% below its fair value

Earnings are forecast to grow 11.04% per year

Earnings grew by 50.9% over the past year

Risk Analysis

Has a high level of debt

Unstable dividend track record



Snowflake Analysis

Solid track record, good value and pays a dividend.


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Knoll

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Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-1.8%

SCS

-0.1%

US Commercial Services

-2.7%

US Market


1 Year Return

16.1%

SCS

24.0%

US Commercial Services

21.2%

US Market

Return vs Industry: SCS underperformed the US Commercial Services industry which returned 23.7% over the past year.

Return vs Market: SCS underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

SCSIndustryMarket
7 Day-1.8%-0.1%-2.7%
30 Day-7.6%3.7%0.09%
90 Day6.6%4.2%6.9%
1 Year20.0%16.1%28.5%24.0%23.8%21.2%
3 Year25.8%13.4%65.9%55.0%48.1%38.6%
5 Year30.0%10.7%109.8%88.5%72.5%53.4%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

31.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SCS ($19.46) is trading below our estimate of fair value ($27.8)

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


Price To Earnings Ratio

PE vs Industry: SCS is good value based on its PE Ratio (14.9x) compared to the Commercial Services industry average (26.4x).

PE vs Market: SCS is good value based on its PE Ratio (14.9x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: SCS is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: SCS is overvalued based on its PB Ratio (2.4x) compared to the US Commercial Services industry average (2.1x).


Next Steps

Future Growth

How is Steelcase forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

11.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SCS's forecast earnings growth (11% per year) is above the savings rate (1.7%).

Earnings vs Market: SCS's earnings (11% per year) are forecast to grow slower than the US market (14.3% per year).

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

Revenue vs Market: SCS's revenue (2.1% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: SCS's revenue (2.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SCS's Return on Equity is forecast to be low in 3 years time (17.1%).


Next Steps

Past Performance

How has Steelcase performed over the past 5 years?

2.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SCS has high quality earnings.

Growing Profit Margin: SCS's current net profit margins (4.1%) are higher than last year (3.1%).


Past Earnings Growth Analysis

Earnings Trend: SCS's earnings have grown by 2.1% per year over the past 5 years.

Accelerating Growth: SCS's earnings growth over the past year (50.9%) exceeds its 5-year average (2.1% per year).

Earnings vs Industry: SCS earnings growth over the past year (50.9%) exceeded the Commercial Services industry -1.3%.


Return on Equity

High ROE: SCS's Return on Equity (16.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Steelcase's financial position?


Financial Position Analysis

Short Term Liabilities: SCS's short term assets ($1.1B) exceed its short term liabilities ($707.4M).

Long Term Liabilities: SCS's short term assets ($1.1B) exceed its long term liabilities ($884.7M).


Debt to Equity History and Analysis

Debt Level: SCS's debt to equity ratio (52%) is considered high.

Reducing Debt: SCS's debt to equity ratio has increased from 42.7% to 52% over the past 5 years.

Debt Coverage: SCS's debt is well covered by operating cash flow (62.8%).

Interest Coverage: SCS's interest payments on its debt are well covered by EBIT (6.1x coverage).


Balance Sheet

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

Debt Coverage by Assets: SCS's debt is covered by short term assets (assets are 2.3x debt).


Next Steps

Dividend

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

3.05%

Current Dividend Yield


Dividend Yield vs Market

company3.1%marketbottom25%1.4%markettop25%3.7%industryaverage1.5%forecastin3Years3.1%

Current dividend yield vs market & industry

Notable Dividend: SCS's dividend (2.98%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: SCS's dividend (2.98%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: SCS's dividend payments have been volatile in the past 10 years.

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (43.7%), SCS's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SCS's dividends in 3 years are forecast to be well covered by earnings (35.4% payout ratio).


Next Steps

Management

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

5.8yrs

Average management tenure


CEO

Jim Keane (60yo)

5.8yrs

Tenure

US$6,439,373

Compensation

Mr. James P. Keane, also known as Jim, has been the Chief Executive Officer of Steelcase Inc. since March 2014. Mr. Keane served as the President of Steelcase Inc. from April 22, 2013 to March 2014. He ser ...


CEO Compensation Analysis

Compensation vs Market: Jim's total compensation ($USD6.44M) is above average for companies of similar size in the US market ($USD3.86M).

Compensation vs Earnings: Jim's compensation has increased by more than 20% in the past year.


Management Age and Tenure

5.8yrs

Average Tenure

57yo

Average Age

Experienced Management: SCS's management team is seasoned and experienced (5.8 years average tenure).


Board Age and Tenure

8.6yrs

Average Tenure

61yo

Average Age

Experienced Board: SCS's board of directors are considered experienced (8.6 years average tenure).


Insider Trading

Insider Buying: SCS insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$847,91221 Jan 20
Robert Pew
EntityIndividual
Role
Chairman of the Board
Chair of the Board
Shares43,305
Max PriceUS$19.58
SellUS$959,50013 Jan 20
Robert Pew
EntityIndividual
Role
Chairman of the Board
Chair of the Board
Shares50,000
Max PriceUS$19.19
SellUS$1,572,61210 Jan 20
Robert Pew
EntityIndividual
Role
Chairman of the Board
Chair of the Board
Shares78,671
Max PriceUS$20.11
SellUS$1,000,00008 Jan 20
Robert Pew
EntityIndividual
Role
Chairman of the Board
Chair of the Board
Shares50,000
Max PriceUS$20.00
SellUS$463,67427 Dec 19
James Keane
EntityIndividual
Role
Chief Executive Officer
President
Shares21,667
Max PriceUS$21.40
SellUS$98,90220 Dec 19
Sara Armbruster
EntityIndividual
Role
Head of Research
Vice President of Strategy of Research & Digital Transformation
Shares4,514
Max PriceUS$21.91
SellUS$136,75422 Oct 19
David Sylvester
EntityIndividual
Role
Chief Financial Officer
CFO & Senior VP
Shares7,500
Max PriceUS$18.23
SellUS$32,67402 Oct 19
Peter Wege
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,769
Max PriceUS$18.47
SellUS$95,24901 Oct 19
Peter Wege
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,200
Max PriceUS$18.36
SellUS$96,16727 Sep 19
Peter Wege
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,200
Max PriceUS$18.64
SellUS$473,75325 Sep 19
Eddy Schmitt
EntityIndividual
Shares25,000
Max PriceUS$18.95
SellUS$96,50125 Sep 19
Sara Armbruster
EntityIndividual
Role
Head of Research
Vice President of Strategy of Research & Digital Transformation
Shares5,000
Max PriceUS$19.30
SellUS$10,70225 Sep 19
James Ludwig
EntityIndividual
Shares560
Max PriceUS$19.11
SellUS$366,41915 Jul 19
David Sylvester
EntityIndividual
Role
Chief Financial Officer
CFO & Senior VP
Shares21,017
Max PriceUS$17.43
SellUS$1,744,50015 Jul 19
James Keane
EntityIndividual
Role
Chief Executive Officer
President
Shares100,000
Max PriceUS$17.45
SellUS$86,50111 Jul 19
Sara Armbruster
EntityIndividual
Role
Head of Research
Vice President of Strategy of Research & Digital Transformation
Shares5,000
Max PriceUS$17.30
SellUS$342,16610 Jul 19
Lizbeth O'Shaughnessy
EntityIndividual
Role
Chief Administrative Officer
Chief Administrative Officer
Shares20,000
Max PriceUS$17.11
SellUS$17,48903 Jul 19
Jennifer Niemann
EntityIndividual
Role
Member of the Board of Directors
Director
Shares1,020
Max PriceUS$17.15
SellUS$138,00003 May 19
James Ludwig
EntityIndividual
Shares8,000
Max PriceUS$17.25
SellUS$209,84501 May 19
Allan Smith
EntityIndividual
Role
Head of Marketing
Vice President of Global Marketing
Shares12,233
Max PriceUS$17.15
SellUS$26,91129 Mar 19
Jennifer Niemann
EntityIndividual
Role
Member of the Board of Directors
Director
Shares1,832
Max PriceUS$14.69
SellUS$112,50027 Mar 19
Sara Armbruster
EntityIndividual
Role
Head of Research
Vice President of Strategy of Research & Digital Transformation
Shares7,500
Max PriceUS$15.00

Ownership Breakdown

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


Management Team

  • Jim Keane (60yo)

    President

    • Tenure: 5.8yrs
    • Compensation: US$6.44m
  • Sara Armbruster (48yo)

    Vice President of Strategy of Research & Digital Transformation

    • Tenure: 6yrs
    • Compensation: US$1.40m
  • Dave Sylvester (54yo)

    CFO & Senior VP

    • Tenure: 8.8yrs
    • Compensation: US$2.37m
  • Lizbeth O'Shaughnessy (57yo)

    Chief Administrative Officer

    • Tenure: 5.6yrs
    • Compensation: US$1.57m
  • Mark Mossing (61yo)

    Corporate Controller & Chief Accounting Officer

    • Tenure: 11.8yrs
  • Guillaume Alvarez (59yo)

    Senior Vice President of EMEA

    • Tenure: 5.8yrs
  • Allan Smith (51yo)

    Vice President of Global Marketing

    • Tenure: 6.3yrs
    • Compensation: US$1.30m
  • Gale Moutrey (60yo)

    Vice President of Communications

    • Tenure: 5.8yrs
  • Bob Krestakos (57yo)

    Vice President of Global Operations

    • Tenure: 4.9yrs
    • Compensation: US$1.15m
  • Mike O'Meara

    Director of Investor Relations & Financial Planning and Analysis


    Board Members

    • Larry Blanford (65yo)

      Independent Director

      • Tenure: 7.3yrs
      • Compensation: US$220.00k
    • Jim Keane (60yo)

      President

      • Tenure: 5.8yrs
      • Compensation: US$6.44m
    • Rob Pew (68yo)

      Chair of the Board

      • Tenure: 16.6yrs
      • Compensation: US$300.00k
    • Peter Wege (70yo)

      Independent Director

      • Tenure: 41yrs
      • Compensation: US$200.00k
    • Kate Wolters (61yo)

      Independent Director

      • Tenure: 19yrs
      • Compensation: US$200.00k
    • Tim Brown (56yo)

      Independent Director

      • Tenure: 3.1yrs
      • Compensation: US$210.00k
    • Connie Duckworth (64yo)

      Independent Director

      • Tenure: 9.8yrs
      • Compensation: US$210.00k
    • Cathy Ross (61yo)

      Independent Director

      • Tenure: 13.8yrs
      • Compensation: US$220.00k
    • Jenny Niemann (50yo)

      Director

      • Tenure: 2.5yrs
      • Compensation: US$200.00k
    • Todd Kelsey (54yo)

      Independent Director

      • Tenure: 2.8yrs
      • Compensation: US$205.00k

    Company Information

    Steelcase Inc.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Steelcase Inc.
    • Ticker: SCS
    • Exchange: NYSE
    • Founded: 1912
    • Industry: Office Services and Supplies
    • Sector: Commercial Services
    • Market Cap: US$2.227b
    • Shares outstanding: 117.20m
    • Website: https://www.steelcase.com

    Number of Employees


    Location

    • Steelcase Inc.
    • 901 44th Street SE
    • Grand Rapids
    • Michigan
    • 49508
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    SCSNYSE (New York Stock Exchange)YesClass A Common StockUSUSDFeb 1998
    GJBDB (Deutsche Boerse AG)YesClass A Common StockDEEURFeb 1998

    Biography

    Steelcase Inc. manufactures and sells integrated furniture settings, user-centered technologies, and interior architectural products. It operates through Americas, EMEA, and Other Category segments. The company’s furniture portfolio includes panel, fence and beam-based furniture systems, storage products, fixed and height-adjustable desks, benches, and tables, as well as complementary products, including worktools. Its seating products comprise ergonomic task chairs; seating for collaborative or casual settings; and specialty seating for specific vertical markets, such as healthcare and education. The company’s interior architectural products include full and partial height walls and architectural pods. It also provides textiles, wall coverings, and surface imaging solutions for architects and designers; and ceramic steel surfaces for use in various applications, including static whiteboards and chalkboards through third party fabricators and distributors, as well as workplace strategy consulting, data-driven space measurement, lease origination, furniture and asset management, and hosted event services. The company markets and sells its products to corporate, government, healthcare, education, and retail customers under the Steelcase, Coalesse, Turnstone, Smith System, AMQ, Orangebox, Designtex, and PolyVision brands. It distributes its products and services through a network of independent and company-owned dealers, as well as directly to end-use customers. The company was founded in 1912 and is headquartered in Grand Rapids, Michigan. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/27 23:44
    End of Day Share Price2020/01/27 00:00
    Earnings2019/11/22
    Annual Earnings2019/02/22


    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.