NasdaqGM:PAHC

Stock Analysis Report

Executive Summary

Phibro Animal Health Corporation manufactures and supplies a range of animal health and mineral nutrition products for livestock primarily in the United States.

Rewards

Trading at 42.2% below its fair value

Earnings are forecast to grow 3.54% per year

Risk Analysis

Debt is not well covered by operating cash flow

Unstable dividend track record

Profit margins (5%) are lower than last year (7.9%)



Snowflake Analysis

Adequate balance sheet second-rate dividend payer.


Similar Companies

Parnell Pharmaceuticals Holdings

OTCPK:PARN.F

Share Price & News

How has Phibro Animal Health's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

-3.2%

PAHC

-2.3%

US Pharmaceuticals

-2.7%

US Market


1 Year Return

-20.1%

PAHC

14.1%

US Pharmaceuticals

21.2%

US Market

Return vs Industry: PAHC underperformed the US Pharmaceuticals industry which returned 12.6% over the past year.

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


Shareholder returns

PAHCIndustryMarket
7 Day-3.2%-2.3%-2.7%
30 Day0.2%0.4%0.09%
90 Day5.3%10.7%6.9%
1 Year-18.6%-20.1%17.0%14.1%23.8%21.2%
3 Year-3.0%-7.0%38.7%28.8%48.1%38.6%
5 Year-5.9%-12.2%29.2%15.6%72.5%53.4%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Phibro Animal Health undervalued compared to its fair value and its price relative to the market?

43.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PAHC ($25.29) is trading below our estimate of fair value ($43.72)

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


Price To Earnings Ratio

PE vs Industry: PAHC is poor value based on its PE Ratio (25x) compared to the Pharmaceuticals industry average (24.9x).

PE vs Market: PAHC is poor value based on its PE Ratio (25x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: PAHC is poor value based on its PEG Ratio (7.1x)


Price to Book Ratio

PB vs Industry: PAHC is overvalued based on its PB Ratio (4.9x) compared to the US Pharmaceuticals industry average (3.3x).


Next Steps

Future Growth

How is Phibro Animal Health forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

3.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PAHC's forecast earnings growth (3.5% per year) is above the savings rate (1.7%).

Earnings vs Market: PAHC's earnings (3.5% per year) are forecast to grow slower than the US market (14.3% per year).

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

Revenue vs Market: PAHC's revenue (3.1% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: PAHC's revenue (3.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PAHC's Return on Equity is forecast to be high in 3 years time (21.6%)


Next Steps

Past Performance

How has Phibro Animal Health performed over the past 5 years?

7.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PAHC has high quality earnings.

Growing Profit Margin: PAHC's current net profit margins (5%) are lower than last year (7.9%).


Past Earnings Growth Analysis

Earnings Trend: PAHC's earnings have grown by 7.1% per year over the past 5 years.

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

Earnings vs Industry: PAHC had negative earnings growth (-37.3%) over the past year, making it difficult to compare to the Pharmaceuticals industry average (36.8%).


Return on Equity

High ROE: PAHC's Return on Equity (19.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Phibro Animal Health's financial position?


Financial Position Analysis

Short Term Liabilities: PAHC's short term assets ($455.5M) exceed its short term liabilities ($142.0M).

Long Term Liabilities: PAHC's short term assets ($455.5M) exceed its long term liabilities ($446.6M).


Debt to Equity History and Analysis

Debt Level: PAHC's debt to equity ratio (191.2%) is considered high.

Reducing Debt: PAHC's debt to equity ratio has reduced from 1332.8% to 191.2% over the past 5 years.

Debt Coverage: PAHC's debt is not well covered by operating cash flow (10.7%).

Interest Coverage: PAHC's interest payments on its debt are well covered by EBIT (6.2x coverage).


Balance Sheet

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

Debt Coverage by Assets: PAHC's debt is covered by short term assets (assets are 1.2x debt).


Next Steps

Dividend

What is Phibro Animal Health's current dividend yield, its reliability and sustainability?

1.93%

Current Dividend Yield


Dividend Yield vs Market

company1.9%marketbottom25%1.4%markettop25%3.7%industryaverage2.7%forecastin3Years2.2%

Current dividend yield vs market & industry

Notable Dividend: PAHC's dividend (1.9%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: PAHC's dividend (1.9%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

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

Growing Dividend: PAHC's dividend payments have increased, but the company has only paid a dividend for 5 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (47.4%), PAHC's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: PAHC's dividends in 3 years are forecast to be well covered by earnings (39.1% payout ratio).


Next Steps

Management

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

4.7yrs

Average management tenure


CEO

Jack Bendheim (72yo)

5.8yrs

Tenure

US$2,721,229

Compensation

Mr. Jack Clifford Bendheim has been the President and Chief Executive Officer of Phibro Animal Health Corporation since 1988 and March 2014, respectively and serves as its Chairman. Mr. Bendheim served as  ...


CEO Compensation Analysis

Compensation vs Market: Jack's total compensation ($USD2.72M) is about average for companies of similar size in the US market ($USD2.53M).

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


Management Age and Tenure

4.7yrs

Average Tenure

56yo

Average Age

Experienced Management: PAHC's management team is considered experienced (4.7 years average tenure).


Board Age and Tenure

10.6yrs

Average Tenure

69yo

Average Age

Experienced Board: PAHC's board of directors are seasoned and experienced ( 10.6 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

BuyUS$106,05005 Sep 19
E. Corcoran
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares5,000
Max PriceUS$21.21

Ownership Breakdown

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


Management Team

  • Jack Bendheim (72yo)

    Chairman

    • Tenure: 5.8yrs
    • Compensation: US$2.72m
  • Richard Johnson (70yo)

    Chief Financial Officer

    • Tenure: 17.3yrs
    • Compensation: US$653.98k
  • Daniel Bendheim (47yo)

    Executive VP of Corporate Strategy & Director

    • Tenure: 6.2yrs
  • Larry Miller (55yo)

    Chief Operating Officer

    • Tenure: 3.5yrs
    • Compensation: US$670.56k
  • George Moffett

    Managing Director of Ferro Metal & Chemical Corporation Ltd

    • Thomas Dagger (61yo)

      Senior VP

      • Tenure: 13.2yrs
      • Compensation: US$564.07k
    • Dean Warras (50yo)

      Senior Vice President of Strategic Alliances

      • Tenure: 3.5yrs
      • Compensation: US$832.24k
    • Jonathan Bendheim (43yo)

      President of MACIE Region

      • Tenure: 1.4yrs
    • Lisa Escudero (57yo)

      Senior Vice President of Human Resources

      • Tenure: 2.8yrs
    • Ramon Fuenmayor

      President South America Region

      • Tenure: 2.6yrs

    Board Members

    • Jack Bendheim (72yo)

      Chairman

      • Tenure: 5.8yrs
      • Compensation: US$2.72m
    • Sam Gejdenson (71yo)

      Independent Non-Executive Director

      • Tenure: 16yrs
      • Compensation: US$60.00k
    • Mary Malanoski (62yo)

      Non Executive Director

      • Tenure: 15.7yrs
      • Compensation: US$40.00k
    • Carol Wrenn (58yo)

      Independent Director

      • Tenure: 9.5yrs
      • Compensation: US$60.00k
    • Tom Corcoran (72yo)

      Independent Non-Executive Director

      • Tenure: 11.7yrs
      • Compensation: US$50.00k
    • Jerry Carlson (76yo)

      Independent Director

      • Tenure: 12yrs
      • Compensation: US$40.00k
    • George Gunn (69yo)

      Independent Director

      • Tenure: 4.7yrs
      • Compensation: US$50.00k
    • Daniel Bendheim (47yo)

      Executive VP of Corporate Strategy & Director

      • Tenure: 6.2yrs
    • Jonathan Bendheim (43yo)

      President of MACIE Region

      • Tenure: 1.4yrs

    Company Information

    Phibro Animal Health Corporation's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Phibro Animal Health Corporation
    • Ticker: PAHC
    • Exchange: NasdaqGM
    • Founded:
    • Industry: Pharmaceuticals
    • Sector: Pharmaceuticals & Biotech
    • Market Cap: US$1.005b
    • Shares outstanding: 40.45m
    • Website: https://www.pahc.com

    Number of Employees


    Location

    • Phibro Animal Health Corporation
    • Glenpointe Centre East
    • 3rd Floor
    • Teaneck
    • New Jersey
    • 7666
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    PAHCNasdaqGM (Nasdaq Global Market)YesClass A Common StockUSUSDApr 2014
    PB8DB (Deutsche Boerse AG)YesClass A Common StockDEEURApr 2014

    Biography

    Phibro Animal Health Corporation manufactures and supplies a range of animal health and mineral nutrition products for livestock primarily in the United States. It operates through three segments: Animal Health, Mineral Nutrition, and Performance Products. The company develops, manufactures, and markets products for a range of food animals, including poultry, swine, beef and dairy cattle, and aquaculture. Its animal health products also comprise antibacterials that are biological or chemical products used in the animal health industry to treat or to prevent bacterial diseases; anticoccidials primarily used to prevent and control the disease coccidiosis in poultry and cattle; anthelmintics to treat infestations of parasitic intestinal worms; and anti-bloat treatment products for cattle to control bloat in animals grazing on legume or wheat-pasture. In addition, the company offers nutritional specialty products, which enhance nutrition to help improve health and performance; and vaccines to prevent diseases primarily for the poultry and swine markets. Further, it manufactures and markets formulations and concentrations of trace minerals, such as zinc, manganese, copper, iron, and other compounds; and various specialty ingredients for use in the personal care, industrial chemical, and chemical catalyst industries. The company sells its animal health and mineral nutrition products through local sales offices to integrated poultry, swine, and cattle integrators, as well as through commercial animal feed manufacturers, wholesalers, and distributors. It also operates in Latin America, Canada, Europe, the Middle East, Africa, and the Asia Pacific. The company was formerly known as Philipp Brothers Chemicals, Inc. and changed its name to Phibro Animal Health Corporation in July 2003. The company is headquartered in Teaneck, New Jersey. Phibro Animal Health Corporation is a subsidiary of BFI Co., LLC. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/28 01:31
    End of Day Share Price2020/01/27 00:00
    Earnings2019/09/30
    Annual Earnings2019/06/30


    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.