RELX PLC (REN.AS) Stock Fundamental Analysis
Europe - Euronext Amsterdam - AMS:REN - GB00B2B0DG97 - Common Stock
32.96 EUR
-0.2 (-0.6%)
Overall REN gets a fundamental rating of 6 out of 10. We evaluated REN against 36 industry peers in the Professional Services industry. While REN belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. REN is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- REN had positive earnings in the past year.
- In the past year REN had a positive cash flow from operations.
- REN had positive earnings in each of the past 5 years.
- REN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- REN has a better Return On Assets (13.44%) than 97.22% of its industry peers.
- Looking at the Return On Equity, with a value of 88.30%, REN belongs to the top of the industry, outperforming 91.67% of the companies in the same industry.
- REN has a Return On Invested Capital of 26.28%. This is amongst the best in the industry. REN outperforms 97.22% of its industry peers.
- REN had an Average Return On Invested Capital over the past 3 years of 19.85%. This is significantly above the industry average of 11.62%.
- The last Return On Invested Capital (26.28%) for REN is above the 3 year average (19.85%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.44% | ||
| ROE | 88.3% | ||
| ROIC | 26.28% |
ROA(3y)11.68%
ROA(5y)10.86%
ROE(3y)50.1%
ROE(5y)50.83%
ROIC(3y)19.85%
ROIC(5y)17.4%
1.3 Margins
- REN has a Profit Margin of 20.19%. This is amongst the best in the industry. REN outperforms 97.22% of its industry peers.
- In the last couple of years the Profit Margin of REN has remained more or less at the same level.
- Looking at the Operating Margin, with a value of 30.63%, REN belongs to the top of the industry, outperforming 97.22% of the companies in the same industry.
- REN's Operating Margin has improved in the last couple of years.
- The Gross Margin of REN (65.48%) is comparable to the rest of the industry.
- In the last couple of years the Gross Margin of REN has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.63% | ||
| PM (TTM) | 20.19% | ||
| GM | 65.48% |
OM growth 3Y5.55%
OM growth 5Y3%
PM growth 3Y0.32%
PM growth 5Y1.41%
GM growth 3Y0.2%
GM growth 5Y0%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so REN is creating value.
- REN has less shares outstanding than it did 1 year ago.
- The number of shares outstanding for REN has been reduced compared to 5 years ago.
- REN has a better debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 3.85 indicates that REN is not in any danger for bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 3.85, REN belongs to the top of the industry, outperforming 88.89% of the companies in the same industry.
- REN has a debt to FCF ratio of 3.34. This is a good value and a sign of high solvency as REN would need 3.34 years to pay back of all of its debts.
- The Debt to FCF ratio of REN (3.34) is better than 77.78% of its industry peers.
- A Debt/Equity ratio of 2.57 is on the high side and indicates that REN has dependencies on debt financing.
- The Debt to Equity ratio of REN (2.57) is worse than 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.57 | ||
| Debt/FCF | 3.34 | ||
| Altman-Z | 3.85 |
ROIC/WACC3.02
WACC8.71%
2.3 Liquidity
- REN has a Current Ratio of 0.47. This is a bad value and indicates that REN is not financially healthy enough and could expect problems in meeting its short term obligations.
- Looking at the Current ratio, with a value of 0.47, REN is doing worse than 83.33% of the companies in the same industry.
- REN has a Quick Ratio of 0.47. This is a bad value and indicates that REN is not financially healthy enough and could expect problems in meeting its short term obligations.
- REN has a worse Quick ratio (0.42) than 86.11% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.47 | ||
| Quick Ratio | 0.42 |
3. Growth
3.1 Past
- REN shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 4.00%.
- The Earnings Per Share has been growing slightly by 5.93% on average over the past years.
- REN shows a small growth in Revenue. In the last year, the Revenue has grown by 2.48%.
- The Revenue has been growing slightly by 3.68% on average over the past years.
EPS 1Y (TTM)4%
EPS 3Y10.74%
EPS 5Y5.93%
EPS Q2Q%6.72%
Revenue 1Y (TTM)2.48%
Revenue growth 3Y9.2%
Revenue growth 5Y3.68%
Sales Q2Q%2.15%
3.2 Future
- Based on estimates for the next years, REN will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.69% on average per year.
- The Revenue is expected to grow by 5.48% on average over the next years.
EPS Next Y7.19%
EPS Next 2Y8.64%
EPS Next 3Y8.79%
EPS Next 5Y8.69%
Revenue Next Year1.95%
Revenue Next 2Y4.25%
Revenue Next 3Y4.96%
Revenue Next 5Y5.48%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 27.47, REN can be considered very expensive at the moment.
- The rest of the industry has a similar Price/Earnings ratio as REN.
- Compared to an average S&P500 Price/Earnings ratio of 27.25, REN is valued at the same level.
- Based on the Price/Forward Earnings ratio of 19.58, the valuation of REN can be described as rather expensive.
- REN's Price/Forward Earnings ratio is in line with the industry average.
- REN is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.47 | ||
| Fwd PE | 19.58 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, REN is valued a bit more expensive than 61.11% of the companies in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of REN is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23 | ||
| EV/EBITDA | 19.89 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates REN does not grow enough to justify the current Price/Earnings ratio.
- The excellent profitability rating of REN may justify a higher PE ratio.
PEG (NY)3.82
PEG (5Y)4.64
EPS Next 2Y8.64%
EPS Next 3Y8.79%
5. Dividend
5.1 Amount
- REN has a Yearly Dividend Yield of 2.20%.
- Compared to an average industry Dividend Yield of 2.39, REN has a dividend in line with its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.82, REN pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.2% |
5.2 History
- The dividend of REN is nicely growing with an annual growth rate of 6.11%!
Dividend Growth(5Y)6.11%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
- 60.42% of the earnings are spent on dividend by REN. This is not a sustainable payout ratio.
- REN's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP60.42%
EPS Next 2Y8.64%
EPS Next 3Y8.79%
RELX PLC / REN.AS FAQ
Can you provide the ChartMill fundamental rating for RELX PLC?
ChartMill assigns a fundamental rating of 6 / 10 to REN.AS.
What is the valuation status of RELX PLC (REN.AS) stock?
ChartMill assigns a valuation rating of 3 / 10 to RELX PLC (REN.AS). This can be considered as Overvalued.
Can you provide the profitability details for RELX PLC?
RELX PLC (REN.AS) has a profitability rating of 9 / 10.
What is the valuation of RELX PLC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for RELX PLC (REN.AS) is 27.47 and the Price/Book (PB) ratio is 23.82.
What is the expected EPS growth for RELX PLC (REN.AS) stock?
The Earnings per Share (EPS) of RELX PLC (REN.AS) is expected to grow by 7.19% in the next year.