OTCPK:STGP.F

Stock Analysis Report

Executive Summary

Scentre Group (ASX Code: SCG) is the owner and operator of Westfield in Australia and New Zealand with interests in 41 centres, encompassing approximately 11,500 outlets and total assets under management of $54.6 billion.

Rewards

Trading at 31.1% below its fair value

Risk Analysis

Earnings are forecast to decline by an average of -0.6% per year for the next 3 years

Unstable dividend track record

Large one-off items impacting financial results

Profit margins (58.9%) are lower than last year



Snowflake Analysis

Undervalued average dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

0%

STGP.F

-0.06%

US REITs

1.1%

US Market


1 Year Return

-15.6%

STGP.F

13.2%

US REITs

17.8%

US Market

Return vs Industry: STGP.F underperformed the US REITs industry which returned 13.2% over the past year.

Return vs Market: STGP.F underperformed the US Market which returned 17.8% over the past year.


Shareholder returns

STGP.FIndustryMarket
7 Day0%-0.06%1.1%
30 Dayn/a0.9%1.4%
90 Dayn/a-0.2%3.9%
1 Year-15.6%-15.6%17.9%13.2%20.3%17.8%
3 Year-18.6%-18.6%34.4%17.7%44.8%35.4%
5 Year-9.7%-9.7%56.5%24.2%71.3%52.4%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

31.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: STGP.F ($2.58) is trading below our estimate of fair value ($3.74)

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


Price To Earnings Ratio

PE vs Industry: STGP.F is good value based on its PE Ratio (13.1x) compared to the REITs industry average (38.6x).

PE vs Market: STGP.F is good value based on its PE Ratio (13.1x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: STGP.F's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: STGP.F is good value based on its PB Ratio (0.9x) compared to the US REITs industry average (2x).


Next Steps

Future Growth

How is Scentre Group forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

-0.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: STGP.F's earnings are forecast to decline over the next 3 years (-0.6% per year).

Earnings vs Market: STGP.F's earnings are forecast to decline over the next 3 years (-0.6% per year).

High Growth Earnings: STGP.F's earnings are forecast to decline over the next 3 years.

Revenue vs Market: STGP.F's revenue (4% per year) is forecast to grow slower than the US market (7.4% per year).

High Growth Revenue: STGP.F's revenue (4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: STGP.F's Return on Equity is forecast to be low in 3 years time (10.4%).


Next Steps

Past Performance

How has Scentre Group performed over the past 5 years?

13.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: STGP.F has a large one-off gain of A$381.9M impacting its June 30 2019 financial results.

Growing Profit Margin: STGP.F's current net profit margins (58.9%) are lower than last year .


Past Earnings Growth Analysis

Earnings Trend: STGP.F's earnings have grown by 13.1% per year over the past 5 years.

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

Earnings vs Industry: STGP.F had negative earnings growth (-63.3%) over the past year, making it difficult to compare to the REITs industry average (8.3%).


Return on Equity

High ROE: STGP.F's Return on Equity (6.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Scentre Group's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

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

Debt Coverage by Assets: STGP.F's debt is not covered by short term assets (assets are 0.1x debt).


Financial Institutions Analysis

Asset Level: STGP.F's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if STGP.F has a sufficient allowance for bad loans.

Low Risk Liabilities: STGP.F reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if STGP.F has an acceptable proportion of non-loan assets held.

Low Risk Deposits: STGP.F has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if STGP.F has an appropriate level of bad loans.


Next Steps

Dividend

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

5.73%

Current Dividend Yield


Dividend Yield vs Market

company5.7%marketbottom25%1.4%markettop25%3.7%industryaverage3.7%forecastin3Years6.0%

Current dividend yield vs market & industry

Notable Dividend: STGP.F's dividend (5.73%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: STGP.F's dividend (5.73%) is in the top 25% of dividend payers in the US market (3.67%)


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (86.5%), STGP.F's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: STGP.F's dividends in 3 years are forecast to be thoroughly covered by earnings (0.02% payout ratio).


Next Steps

Management

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

4.9yrs

Average management tenure


CEO

Peter Allen (57yo)

5.9yrs

Tenure

AU$7,736,343

Compensation

Mr. Peter Kenneth Allen has been the Chief Executive Officer and Executive Director of Scentre Group since 2010 and May 25, 2011 respectively. Mr. Allen has been Chief Executive Officer and Executive Direc ...


CEO Compensation Analysis

Compensation vs Market: Peter's total compensation ($USD5.27M) is below average for companies of similar size in the US market ($USD10.90M).

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


Management Age and Tenure

4.9yrs

Average Tenure

55yo

Average Age

Experienced Management: STGP.F's management team is considered experienced (4.9 years average tenure).


Board Age and Tenure

4.2yrs

Average Tenure

58yo

Average Age

Experienced Board: STGP.F's board of directors are considered experienced (4.2 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.


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Ownership Breakdown

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


Management Team

  • Peter Allen (57yo)

    CEO & Executive Director

    • Tenure: 5.9yrs
    • Compensation: AU$7.74m
  • Maureen McGrath

    Company Secretary

    • Tenure: 0yrs
  • Elliott Rusanow (45yo)

    Chief Financial Officer

    • Tenure: 0.7yrs
  • Greg Miles (55yo)

    Chief Operating Officer

    • Tenure: 4.1yrs
    • Compensation: AU$4.66m
  • Janine Frew

    Director of Human Resources

    • Tenure: 5.5yrs
  • Paul Giugni

    General Counsel & Secretary

    • Tenure: 5.5yrs
  • Roy Gruenpeter

    General Manager of Development

    • Tenure: 0yrs
  • Andrew Clarke

    Head of Investor Relations

    • Tenure: 0yrs
  • John Yates

    Director of Security

    • Tenure: 4.3yrs

Board Members

  • Sarah Carolyn Kay (58yo)

    Independent Non-Executive Director

    • Tenure: 3.8yrs
    • Compensation: AU$250.13k
  • Andrew Harmos (59yo)

    Independent Non-Executive Director

    • Tenure: 5.5yrs
    • Compensation: AU$280.13k
  • Mike Ihlein (63yo)

    Independent Non-Executive Director

    • Tenure: 5.5yrs
    • Compensation: AU$280.13k
  • Peter Allen (57yo)

    CEO & Executive Director

    • Tenure: 5.9yrs
    • Compensation: AU$7.74m
  • Brian Schwartz (66yo)

    Independent Non-Executive Chairman

    • Tenure: 3.6yrs
    • Compensation: AU$717.50k
  • Aliza Knox (57yo)

    Independent Non-Executive Director

    • Tenure: 4.6yrs
    • Compensation: AU$240.13k
  • Margie Seale (58yo)

    Independent Non-Executive Director

    • Tenure: 3.8yrs
    • Compensation: AU$280.13k
  • Steven Leigh

    Non-Executive Director

    • Tenure: 0.7yrs

Company Information

Scentre Group's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Scentre Group
  • Ticker: STGP.F
  • Exchange: OTCPK
  • Founded: 2014
  • Industry: Retail REITs
  • Sector: Real Estate
  • Market Cap: AU$20.280b
  • Listing Market Cap: AU$13.820b
  • Shares outstanding: 5.24b
  • Website: https://www.scentregroup.com

Number of Employees


Location

  • Scentre Group
  • 85 Castlereagh Street
  • Level 30
  • Sydney
  • New South Wales
  • 2000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SCGASX (Australian Securities Exchange)YesSCG Stapled UnitsAUAUDJun 2014
SCGCHIA (Chi-X Australia)YesSCG Stapled UnitsAUAUDJun 2014
STGP.FOTCPK (Pink Sheets LLC)YesSCG Stapled UnitsUSUSDJun 2014

Biography

Scentre Group (ASX Code: SCG) is the owner and operator of Westfield in Australia and New Zealand with interests in 41 centres, encompassing approximately 11,500 outlets and total assets under management o ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/11 00:43
End of Day Share Price2019/12/03 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.