JSE:SAP

Stock Analysis Report

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Executive Summary

Sappi Limited, a woodfibre company, manufactures and sells dissolving wood pulp, packaging and specialty papers, and printing and writing papers to direct and indirect customers in North America, Europe, Southern Africa, and internationally. More Details


Snowflake Analysis

Moderate growth potential and slightly overvalued.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: SAP is not significantly more volatile than the rest of ZA stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: SAP's weekly volatility (8%) has been stable over the past year.


Market Performance


7 Day Return

5.9%

SAP

5.4%

ZA Forestry

1.0%

ZA Market


1 Year Return

-2.3%

SAP

17.9%

ZA Forestry

-1.9%

ZA Market

Return vs Industry: SAP underperformed the ZA Forestry industry which returned 18% over the past year.

Return vs Market: SAP matched the ZA Market which returned -2.1% over the past year.


Shareholder returns

SAPIndustryMarket
7 Day5.9%5.4%1.0%
30 Day27.3%25.8%3.8%
90 Day58.2%54.5%11.8%
1 Year-2.3%-2.3%20.9%17.9%3.3%-1.9%
3 Year-51.5%-53.1%5.9%-3.8%2.9%-17.9%
5 Year-36.4%-40.9%75.2%36.3%52.2%9.2%

Long-Term Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

41.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SAP (ZAR41.87) is trading below our estimate of fair value (ZAR71.62)

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


Price To Earnings Ratio

PE vs Industry: SAP is unprofitable, so we can't compare its PE Ratio to the XX Forestry industry average.

PE vs Market: SAP is unprofitable, so we can't compare its PE Ratio to the ZA market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate SAP's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: SAP's PB Ratio (0.9x) is in line with the XX Forestry industry average.


Next Steps

Future Growth

How is Sappi forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

51.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SAP is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (9.3%).

Earnings vs Market: SAP is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: SAP's is expected to become profitable in the next 3 years.

Revenue vs Market: SAP's revenue (4.8% per year) is forecast to grow slower than the ZA market (10.5% per year).

High Growth Revenue: SAP's revenue (4.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SAP's Return on Equity is forecast to be low in 3 years time (11.6%).


Next Steps

Past Performance

How has Sappi performed over the past 5 years?

-17.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SAP is currently unprofitable.

Growing Profit Margin: SAP is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: SAP is unprofitable, and losses have increased over the past 5 years at a rate of 17% per year.

Accelerating Growth: Unable to compare SAP's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: SAP is unprofitable, making it difficult to compare its past year earnings growth to the Forestry industry (-1.8%).


Return on Equity

High ROE: SAP has a negative Return on Equity (-8.27%), as it is currently unprofitable.


Next Steps

Financial Health

How is Sappi's financial position?


Financial Position Analysis

Short Term Liabilities: SAP's short term assets ($1.6B) exceed its short term liabilities ($1.1B).

Long Term Liabilities: SAP's short term assets ($1.6B) do not cover its long term liabilities ($2.7B).


Debt to Equity History and Analysis

Debt Level: SAP's debt to equity ratio (131.1%) is considered high.

Reducing Debt: SAP's debt to equity ratio has reduced from 219.2% to 131.1% over the past 5 years.

Debt Coverage: SAP's debt is not well covered by operating cash flow (12.1%).

Interest Coverage: SAP is unprofitable, therefore interest payments are not well covered by earnings.


Balance Sheet


Next Steps

Dividend

What is Sappi current dividend yield, its reliability and sustainability?

1.29%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate SAP's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate SAP's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if SAP's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if SAP's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: SAP is not paying a notable dividend for the ZA market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of SAP's dividend in 3 years as they are not forecast to pay a notable one for the ZA market.


Next Steps

Management

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

6.2yrs

Average management tenure


CEO

Steve Binnie (53 yo)

6.5yrs

Tenure

US$1,082,678

Compensation

Mr. Stephen Robert Binnie, also known as Steve, B.Com, B Acc, CA(SA), MBA has been the Chief Executive Officer of Sappi Limited since July 1, 2014. Mr. Binnie served as the Chief Financial Officer at Sappi...


CEO Compensation Analysis

Compensation vs Market: Steve's total compensation ($USD1.08M) is about average for companies of similar size in the ZA market ($USD877.76K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Stephen Binnie
CEO & Executive Director6.5yrsUS$1.08m0.065%
$ 15.1m
Glen Pearce
CFO & Executive Director6.5yrsUS$581.38k0.028%
$ 6.5m
Gary Bowles
Group Head Technology2.25yrsUS$536.76k0.016%
$ 3.7m
Maarten van Hoven
Group Head of Strategy & Legal9.08yrsUS$415.36k0.034%
$ 7.7m
Fergus Conan Marupen
Group Head of Human Resources5.83yrsUS$403.75k0.010%
$ 2.4m
Mohamed Mansoor
Executive Vice President of Sappi Dissolving Pulp3yrsUS$592.71k0.0090%
$ 2.1m
Alexander van Coller Thiel
Chief Executive Officer of Sappi Southern Africa10.08yrsUS$639.67k0.094%
$ 21.6m
Berend Wiersum
Chief Executive Officer of Sappi Europe14yrsUS$1.29m0.094%
$ 21.6m
Michael Haws
President & CEO of Sappi North America1.25yrsUS$541.56k0.0049%
$ 1.1m
Marjorie Boles
Group Chief Information Officer2.58yrsno datano data
Graeme Wild
Group Head of Investor Relations & Sustainabilityno datano datano data
Andre S. Oberholzer
Group Head of Corporate Affairsno datano datano data

6.2yrs

Average Tenure

54.5yo

Average Age

Experienced Management: SAP's management team is seasoned and experienced (6.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Stephen Binnie
CEO & Executive Director6.5yrsUS$1.08m0.065%
$ 15.1m
Glen Pearce
CFO & Executive Director6.5yrsUS$581.38k0.028%
$ 6.5m
Anthony Rudd
Independent Chairman4.83yrsUS$408.98k0.045%
$ 10.5m
James Lopez
Independent Non-Executive Director1.83yrsUS$105.04kno data
Robertus Johannes Antonius Renders
Independent Non Executive Director5.25yrsUS$142.82kno data
Nkateko Mageza
Independent Non-Executive Director11yrsUS$64.01kno data
Mohammed Moosa
Lead Independent Director1yrUS$70.39k0.10%
$ 24.1m
Janice Stipp
Independent Director1.58yrsUS$114.97kno data
Brian Beamish
Independent Non Executive Director1.83yrsUS$118.43kno data
Michael Fallon
Independent Non-Executive Director9.33yrsUS$130.21k0.00091%
$ 209.8k
Bonakele Mehlomakulu
Independent Non-Executive Director3.83yrsUS$46.34kno data
Zola Malinga
Independent Non-Executive Director2.25yrsUS$41.15kno data

4.3yrs

Average Tenure

61.5yo

Average Age

Experienced Board: SAP's board of directors are considered experienced (4.3 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

Sappi Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Sappi Limited
  • Ticker: SAP
  • Exchange: JSE
  • Founded: 1936
  • Industry: Paper Products
  • Sector: Materials
  • Market Cap: R23.058b
  • Shares outstanding: 551.10m
  • Website: https://www.sappi.com

Number of Employees


Location

  • Sappi Limited
  • 108 Oxford Road
  • Rosebank
  • Johannesburg
  • Gauteng
  • 2196
  • South Africa

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SAPJSE (The Johannesburg Securities Exchange)YesOrdinary SharesZAZARJan 1992
SPIDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
SPPJ.YOTCPK (Pink Sheets LLC)SPON ADR NEWUSUSDNov 1998

Biography

Sappi Limited, a woodfibre company, manufactures and sells dissolving wood pulp, packaging and specialty papers, and printing and writing papers to direct and indirect customers in North America, Europe, S...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/01/18 17:37
End of Day Share Price2021/01/18 00:00
Earnings2020/09/27
Annual Earnings2020/09/27


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.