HERA SPA (HER.MI) Stock Fundamental Analysis
Europe - Euronext Milan - BIT:HER - IT0001250932 - Common Stock
4.078 EUR
+0.04 (+0.89%)
Overall HER gets a fundamental rating of 6 out of 10. We evaluated HER against 18 industry peers in the Multi-Utilities industry. HER has only an average score on both its financial health and profitability. HER may be a bit undervalued, certainly considering the very reasonable score on growth These ratings would make HER suitable for value investing!
1. Profitability
1.1 Basic Checks
- HER had positive earnings in the past year.
- HER had a positive operating cash flow in the past year.
- In the past 5 years HER has always been profitable.
- HER had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- The Return On Assets of HER (5.12%) is better than 94.44% of its industry peers.
- The Return On Equity of HER (18.73%) is better than 88.89% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 8.42%, HER belongs to the top of the industry, outperforming 94.44% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for HER is in line with the industry average of 5.84%.
- The 3 year average ROIC (5.37%) for HER is below the current ROIC(8.42%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.12% | ||
| ROE | 18.73% | ||
| ROIC | 8.42% |
ROA(3y)2.57%
ROA(5y)2.56%
ROE(3y)11.26%
ROE(5y)10.89%
ROIC(3y)5.37%
ROIC(5y)5.24%
1.3 Margins
- The Profit Margin of HER (3.44%) is worse than 77.78% of its industry peers.
- HER's Profit Margin has declined in the last couple of years.
- The Operating Margin of HER (5.83%) is worse than 88.89% of its industry peers.
- HER's Operating Margin has declined in the last couple of years.
- HER has a Gross Margin of 43.42%. This is in the better half of the industry: HER outperforms 61.11% of its industry peers.
- In the last couple of years the Gross Margin of HER has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.83% | ||
| PM (TTM) | 3.44% | ||
| GM | 43.42% |
OM growth 3Y3.35%
OM growth 5Y-3.88%
PM growth 3Y6.68%
PM growth 5Y-7.22%
GM growth 3Y7.1%
GM growth 5Y-1.88%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so HER is still creating some value.
- HER has about the same amout of shares outstanding than it did 1 year ago.
- The number of shares outstanding for HER has been reduced compared to 5 years ago.
- The debt/assets ratio for HER is higher compared to a year ago.
2.2 Solvency
- An Altman-Z score of 2.43 indicates that HER is not a great score, but indicates only limited risk for bankruptcy at the moment.
- The Altman-Z score of HER (2.43) is better than 100.00% of its industry peers.
- HER has a debt to FCF ratio of 27.04. This is a negative value and a sign of low solvency as HER would need 27.04 years to pay back of all of its debts.
- The Debt to FCF ratio of HER (27.04) is better than 72.22% of its industry peers.
- A Debt/Equity ratio of 1.24 is on the high side and indicates that HER has dependencies on debt financing.
- HER's Debt to Equity ratio of 1.24 is fine compared to the rest of the industry. HER outperforms 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.24 | ||
| Debt/FCF | 27.04 | ||
| Altman-Z | 2.43 |
ROIC/WACC1.55
WACC5.45%
2.3 Liquidity
- A Current Ratio of 1.19 indicates that HER should not have too much problems paying its short term obligations.
- With an excellent Current ratio value of 1.19, HER belongs to the best of the industry, outperforming 88.89% of the companies in the same industry.
- HER has a Quick Ratio of 1.12. This is a normal value and indicates that HER is financially healthy and should not expect problems in meeting its short term obligations.
- The Quick ratio of HER (1.12) is better than 94.44% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.19 | ||
| Quick Ratio | 1.12 |
3. Growth
3.1 Past
- HER shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 17.73%, which is quite good.
- The Earnings Per Share has been growing slightly by 5.51% on average over the past years.
- HER shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 16.42%.
- The Revenue has been growing by 13.27% on average over the past years. This is quite good.
EPS 1Y (TTM)17.73%
EPS 3Y13.92%
EPS 5Y5.51%
EPS Q2Q%-0.45%
Revenue 1Y (TTM)16.42%
Revenue growth 3Y6.89%
Revenue growth 5Y13.27%
Sales Q2Q%-2.69%
3.2 Future
- Based on estimates for the next years, HER will show a small growth in Earnings Per Share. The EPS will grow by 3.26% on average per year.
- Based on estimates for the next years, HER will show a decrease in Revenue. The Revenue will decrease by -1.84% on average per year.
EPS Next Y7.79%
EPS Next 2Y4.51%
EPS Next 3Y4.54%
EPS Next 5Y3.26%
Revenue Next Year-12.34%
Revenue Next 2Y-5.67%
Revenue Next 3Y-2.84%
Revenue Next 5Y-1.84%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- HER is valuated reasonably with a Price/Earnings ratio of 8.16.
- HER's Price/Earnings ratio is rather cheap when compared to the industry. HER is cheaper than 88.89% of the companies in the same industry.
- HER is valuated cheaply when we compare the Price/Earnings ratio to 28.82, which is the current average of the S&P500 Index.
- Based on the Price/Forward Earnings ratio of 12.41, the valuation of HER can be described as correct.
- 88.89% of the companies in the same industry are more expensive than HER, based on the Price/Forward Earnings ratio.
- HER is valuated cheaply when we compare the Price/Forward Earnings ratio to 25.95, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.16 | ||
| Fwd PE | 12.41 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, HER is valued cheaply inside the industry as 83.33% of the companies are valued more expensively.
- 72.22% of the companies in the same industry are more expensive than HER, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.85 | ||
| EV/EBITDA | 5.67 |
4.3 Compensation for Growth
- HER's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- HER has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.05
PEG (5Y)1.48
EPS Next 2Y4.51%
EPS Next 3Y4.54%
5. Dividend
5.1 Amount
- HER has a Yearly Dividend Yield of 3.66%.
- Compared to an average industry Dividend Yield of 4.30, HER is paying slightly less dividend.
- Compared to an average S&P500 Dividend Yield of 1.82, HER pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.66% |
5.2 History
- The dividend of HER is nicely growing with an annual growth rate of 9.46%!
Dividend Growth(5Y)9.46%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- HER pays out 36.07% of its income as dividend. This is a sustainable payout ratio.
- HER's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP36.07%
EPS Next 2Y4.51%
EPS Next 3Y4.54%
HERA SPA / HER.MI FAQ
What is the ChartMill fundamental rating of HERA SPA (HER.MI) stock?
ChartMill assigns a fundamental rating of 6 / 10 to HER.MI.
What is the valuation status for HER stock?
ChartMill assigns a valuation rating of 7 / 10 to HERA SPA (HER.MI). This can be considered as Undervalued.
How profitable is HERA SPA (HER.MI) stock?
HERA SPA (HER.MI) has a profitability rating of 6 / 10.
Can you provide the financial health for HER stock?
The financial health rating of HERA SPA (HER.MI) is 6 / 10.
Is the dividend of HERA SPA sustainable?
The dividend rating of HERA SPA (HER.MI) is 5 / 10 and the dividend payout ratio is 36.07%.