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ARI

African Rainbow MineralsJSE:ARI Stock Report

Last Price

R241.82

Market Cap

R47.4b

7D

1.8%

1Y

-16.2%

Updated

23 Jan, 2022

Data

Company Financials +
ARI fundamental analysis
Snowflake Score
Valuation4/6
Future Growth0/6
Past Performance5/6
Financial Health6/6
Dividends5/6

ARI Stock Overview

African Rainbow Minerals Limited, through its subsidiaries, operates as a diversified mining and minerals company in South Africa and Malaysia.

African Rainbow Minerals Competitors

Rio Tinto Group

LSE:RIO

UK£89.5b

Vale

BOVESPA:VALE3

R$415.4b

Glencore

LSE:GLEN

UK£53.7b

Freeport-McMoRan

NYSE:FCX

US$60.2b

Price History & Performance

Summary of all time highs, changes and price drops for African Rainbow Minerals
Historical stock prices
Current Share PriceR241.82
52 Week HighR306.41
52 Week LowR178.95
Beta1.01
1 Month Change6.48%
3 Month Change11.70%
1 Year Change-16.15%
3 Year Change69.16%
5 Year Change102.94%
Change since IPO210.03%

Recent News & Updates

Dec 27
African Rainbow Minerals (JSE:ARI) Seems To Use Debt Rather Sparingly

African Rainbow Minerals (JSE:ARI) Seems To Use Debt Rather Sparingly

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...

Nov 29
We Take A Look At Why African Rainbow Minerals Limited's (JSE:ARI) CEO Has Earned Their Pay Packet

We Take A Look At Why African Rainbow Minerals Limited's (JSE:ARI) CEO Has Earned Their Pay Packet

It would be hard to discount the role that CEO Mike Schmidt has played in delivering the impressive results at African...

Nov 14
If You Like EPS Growth Then Check Out African Rainbow Minerals (JSE:ARI) Before It's Too Late

If You Like EPS Growth Then Check Out African Rainbow Minerals (JSE:ARI) Before It's Too Late

It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks...

Oct 17
Why We Like The Returns At African Rainbow Minerals (JSE:ARI)

Why We Like The Returns At African Rainbow Minerals (JSE:ARI)

There are a few key trends to look for if we want to identify the next multi-bagger. Ideally, a business will show two...

Shareholder Returns

ARIZA Metals and MiningZA Market
7D1.8%2.6%-0.3%
1Y-16.2%3.4%13.9%

Return vs Industry: ARI underperformed the ZA Metals and Mining industry which returned 3.4% over the past year.

Return vs Market: ARI underperformed the ZA Market which returned 13.9% over the past year.

Price Volatility

Is ARI's price volatile compared to industry and market?
ARI volatility
ARI Average Weekly Movement5.5%
Metals and Mining Industry Average Movement7.0%
Market Average Movement5.7%
10% most volatile stocks in ZA Market12.1%
10% least volatile stocks in ZA Market3.3%

Stable Share Price: ARI is not significantly more volatile than the rest of ZA stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: ARI's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
193312,335Mike Schmidthttps://arm.co.za

African Rainbow Minerals Limited, through its subsidiaries, operates as a diversified mining and minerals company in South Africa and Malaysia. It explores for platinum group metals, nickel, copper, coal, iron ore, manganese ore, chrome ore, and ferro manganese, as well as gold. The company was founded in 1933 and is based in Sandton, South Africa.

African Rainbow Minerals Fundamentals Summary

How do African Rainbow Minerals's earnings and revenue compare to its market cap?
ARI fundamental statistics
Market CapR47.36b
Earnings (TTM)R12.63b
Revenue (TTM)R19.66b

3.8x

P/E Ratio

2.4x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
ARI income statement (TTM)
RevenueR19.66b
Cost of RevenueR7.90b
Gross ProfitR11.76b
Expenses-R869.00m
EarningsR12.63b

Last Reported Earnings

Jun 30, 2021

Next Earnings Date

n/a

Earnings per share (EPS)64.47
Gross Margin59.81%
Net Profit Margin64.23%
Debt/Equity Ratio2.8%

How did ARI perform over the long term?

See historical performance and comparison

Dividends

16.5%

Current Dividend Yield

46%

Payout Ratio

Valuation

Is African Rainbow Minerals undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ARI (ZAR241.82) is trading below our estimate of fair value (ZAR658.99)

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


Price To Earnings Ratio

PE vs Industry: ARI is good value based on its PE Ratio (3.8x) compared to the ZA Metals and Mining industry average (6x).

PE vs Market: ARI is good value based on its PE Ratio (3.8x) compared to the ZA market (10.9x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: ARI's PB Ratio (1.2x) is in line with the ZA Metals and Mining industry average.


Future Growth

How is African Rainbow Minerals forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

-29.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ARI's earnings are forecast to decline over the next 3 years (-29.3% per year).

Earnings vs Market: ARI's earnings are forecast to decline over the next 3 years (-29.3% per year).

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

Revenue vs Market: ARI's revenue (0.8% per year) is forecast to grow slower than the ZA market (6.3% per year).

High Growth Revenue: ARI's revenue (0.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ARI's Return on Equity is forecast to be low in 3 years time (13.3%).


Past Performance

How has African Rainbow Minerals performed over the past 5 years?

32.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ARI has high quality earnings.

Growing Profit Margin: ARI's current net profit margins (64.2%) are higher than last year (34%).


Past Earnings Growth Analysis

Earnings Trend: ARI's earnings have grown significantly by 32.5% per year over the past 5 years.

Accelerating Growth: ARI's earnings growth over the past year (218.4%) exceeds its 5-year average (32.5% per year).

Earnings vs Industry: ARI earnings growth over the past year (218.4%) underperformed the Metals and Mining industry 218.4%.


Return on Equity

High ROE: ARI's Return on Equity (35.3%) is considered high.


Financial Health

How is African Rainbow Minerals's financial position?


Financial Position Analysis

Short Term Liabilities: ARI's short term assets (ZAR18.6B) exceed its short term liabilities (ZAR3.4B).

Long Term Liabilities: ARI's short term assets (ZAR18.6B) exceed its long term liabilities (ZAR6.0B).


Debt to Equity History and Analysis

Debt Level: ARI has more cash than its total debt.

Reducing Debt: ARI's debt to equity ratio has reduced from 22.1% to 2.8% over the past 5 years.

Debt Coverage: ARI's debt is well covered by operating cash flow (696.6%).

Interest Coverage: ARI earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet


Dividend

What is African Rainbow Minerals's current dividend yield, its reliability and sustainability?

16.54%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: ARI's dividend (16.54%) is higher than the bottom 25% of dividend payers in the ZA market (2.87%).

High Dividend: ARI's dividend (16.54%) is in the top 25% of dividend payers in the ZA market (7.34%)


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (46.4%), ARI's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ARI's dividends in 3 years are forecast to be covered by earnings (54.6% payout ratio).


Next Steps

Management

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

4.8yrs

Average management tenure


CEO

Mike Schmidt (63 yo)

9.83yrs

Tenure

R18,642,000

Compensation

Mr. Mike P. Schmidt, also known as Mike, has served as Chief Executive Officer of African Rainbow Minerals Limited (“ARM”) since March 2012. Mr. Schmidt joined ARM as Executive, Platinum Operations in July...


CEO Compensation Analysis

Compensation vs Market: Mike's total compensation ($USD1.24M) is about average for companies of similar size in the ZA market ($USD1.19M).

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


Leadership Team

Experienced Management: ARI's management team is considered experienced (4.8 years average tenure).


Board Members

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


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

African Rainbow Minerals Limited's employee growth, exchange listings and data sources


Key Information

  • Name: African Rainbow Minerals Limited
  • Ticker: ARI
  • Exchange: JSE
  • Founded: 1933
  • Industry: Diversified Metals and Mining
  • Sector: Materials
  • Implied Market Cap: R47.359b
  • Shares outstanding: 195.84m
  • Website: https://arm.co.za

Number of Employees


Location

  • African Rainbow Minerals Limited
  • ARM House
  • 29 Impala Road
  • Sandton
  • Gauteng
  • 2196
  • South Africa

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/01/23 17:00
End of Day Share Price2022/01/21 00:00
Earnings2021/06/30
Annual Earnings2021/06/30


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.