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SNAM SPA (SRG.MI) Stock Fundamental Analysis

BIT:SRG - Borsa Italiana Milan - IT0003153415 - Common Stock - Currency: EUR

4.52  +0.04 (+0.94%)

Fundamental Rating

4

Taking everything into account, SRG scores 4 out of 10 in our fundamental rating. SRG was compared to 4 industry peers in the Gas Utilities industry. While SRG is still in line with the averages on profitability rating, there are concerns on its financial health. SRG has a correct valuation and a medium growth rate.


Dividend Valuation Growth Profitability Health

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6

1. Profitability

1.1 Basic Checks

SRG had positive earnings in the past year.
SRG had a positive operating cash flow in the past year.
In the past 5 years SRG has always been profitable.
SRG had a positive operating cash flow in 4 of the past 5 years.
SRG.MI Yearly Net Income VS EBIT VS OCF VS FCFSRG.MI Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 2B 4B

1.2 Ratios

SRG has a Return On Assets of 5.37%. This is in the better half of the industry: SRG outperforms 75.00% of its industry peers.
With a decent Return On Equity value of 22.74%, SRG is doing good in the industry, outperforming 75.00% of the companies in the same industry.
SRG has a Return On Invested Capital (6.38%) which is in line with its industry peers.
The Average Return On Invested Capital over the past 3 years for SRG is below the industry average of 7.24%.
The 3 year average ROIC (4.37%) for SRG is below the current ROIC(6.38%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 5.37%
ROE 22.74%
ROIC 6.38%
ROA(3y)3.65%
ROA(5y)3.96%
ROE(3y)14.87%
ROE(5y)15.81%
ROIC(3y)4.37%
ROIC(5y)4.63%
SRG.MI Yearly ROA, ROE, ROICSRG.MI Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 5 10 15 20

1.3 Margins

Looking at the Profit Margin, with a value of 29.60%, SRG belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Profit Margin of SRG has declined.
Looking at the Operating Margin, with a value of 40.86%, SRG belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
SRG's Operating Margin has declined in the last couple of years.
With a Gross Margin value of 44.04%, SRG perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
In the last couple of years the Gross Margin of SRG has declined.
Industry RankSector Rank
OM 40.86%
PM (TTM) 29.6%
GM 44.04%
OM growth 3Y-13.39%
OM growth 5Y-9.16%
PM growth 3Y-12.67%
PM growth 5Y-6.54%
GM growth 3Y-9.29%
GM growth 5Y-5.85%
SRG.MI Yearly Profit, Operating, Gross MarginsSRG.MI Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 20 40 60 80

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2

2. Health

2.1 Basic Checks

SRG has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for SRG remains at a similar level compared to 1 year ago.
The number of shares outstanding for SRG has been increased compared to 5 years ago.
Compared to 1 year ago, SRG has a worse debt to assets ratio.
SRG.MI Yearly Shares OutstandingSRG.MI Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B
SRG.MI Yearly Total Debt VS Total AssetsSRG.MI Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 10B 20B 30B

2.2 Solvency

Based on the Altman-Z score of 0.91, we must say that SRG is in the distress zone and has some risk of bankruptcy.
SRG has a Altman-Z score (0.91) which is comparable to the rest of the industry.
SRG has a Debt/Equity ratio of 2.20. This is a high value indicating a heavy dependency on external financing.
SRG has a Debt to Equity ratio of 2.20. This is comparable to the rest of the industry: SRG outperforms 50.00% of its industry peers.
Industry RankSector Rank
Debt/Equity 2.2
Debt/FCF N/A
Altman-Z 0.91
ROIC/WACC1.42
WACC4.48%
SRG.MI Yearly LT Debt VS Equity VS FCFSRG.MI Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 2B 4B 6B 8B 10B

2.3 Liquidity

A Current Ratio of 0.79 indicates that SRG may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.79, SRG is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
A Quick Ratio of 0.56 indicates that SRG may have some problems paying its short term obligations.
The Quick ratio of SRG (0.56) is better than 75.00% of its industry peers.
Industry RankSector Rank
Current Ratio 0.79
Quick Ratio 0.56
SRG.MI Yearly Current Assets VS Current LiabilitesSRG.MI Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B 8B 10B

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4

3. Growth

3.1 Past

SRG shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.80%.
The Earnings Per Share has been growing slightly by 3.35% on average over the past years.
SRG shows a decrease in Revenue. In the last year, the revenue decreased by -3.66%.
SRG shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.64% yearly.
EPS 1Y (TTM)3.8%
EPS 3Y0.83%
EPS 5Y3.35%
EPS Q2Q%1.11%
Revenue 1Y (TTM)-3.66%
Revenue growth 3Y15.68%
Revenue growth 5Y10.64%
Sales Q2Q%1.24%

3.2 Future

SRG is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.97% yearly.
SRG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.64% yearly.
EPS Next Y9.5%
EPS Next 2Y6.7%
EPS Next 3Y5.29%
EPS Next 5Y4.97%
Revenue Next Year-0.4%
Revenue Next 2Y2.14%
Revenue Next 3Y3.41%
Revenue Next 5Y4.64%

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 accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
SRG.MI Yearly Revenue VS EstimatesSRG.MI Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 1B 2B 3B 4B 5B
SRG.MI Yearly EPS VS EstimatesSRG.MI Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 0.1 0.2 0.3 0.4

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4

4. Valuation

4.1 Price/Earnings Ratio

SRG is valuated correctly with a Price/Earnings ratio of 12.56.
Compared to the rest of the industry, the Price/Earnings ratio of SRG indicates a slightly more expensive valuation: SRG is more expensive than 75.00% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of SRG to the average of the S&P500 Index (28.47), we can say SRG is valued rather cheaply.
A Price/Forward Earnings ratio of 11.61 indicates a reasonable valuation of SRG.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SRG is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 92.74, SRG is valued rather cheaply.
Industry RankSector Rank
PE 12.56
Fwd PE 11.61
SRG.MI Price Earnings VS Forward Price EarningsSRG.MI Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60 80

4.2 Price Multiples

SRG's Enterprise Value to EBITDA ratio is in line with the industry average.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 8.38
SRG.MI Per share dataSRG.MI EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 0.5 1 1.5 2

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
SRG has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.32
PEG (5Y)3.74
EPS Next 2Y6.7%
EPS Next 3Y5.29%

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6

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 6.50%, SRG is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 6.37, SRG pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.28, SRG pays a better dividend.
Industry RankSector Rank
Dividend Yield 6.5%

5.2 History

The dividend of SRG has a limited annual growth rate of 5.03%.
Dividend Growth(5Y)5.03%
Div Incr Years0
Div Non Decr Years0

5.3 Sustainability

54.15% of the earnings are spent on dividend by SRG. This is a bit on the high side, but may be sustainable.
The dividend of SRG is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP54.15%
EPS Next 2Y6.7%
EPS Next 3Y5.29%
SRG.MI Yearly Income VS Free CF VS DividendSRG.MI Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 1B -1B 2B
SRG.MI Dividend Payout.SRG.MI Dividend Payout, showing the Payout Ratio.SRG.MI Dividend Payout.PayoutRetained Earnings

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SNAM SPA

BIT:SRG (2/5/2025, 5:35:30 PM)

4.52

+0.04 (+0.94%)

Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryGas Utilities
Earnings (Last)11-07 2024-11-07/bmo
Earnings (Next)N/A N/A
Inst Owners27.14%
Inst Owner ChangeN/A
Ins Owners7.46%
Ins Owner ChangeN/A
Market Cap15.19B
Analysts70.83
Price Target5.23 (15.71%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 6.5%
Yearly Dividend0.28
Dividend Growth(5Y)5.03%
DP54.15%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)5.83%
Min EPS beat(2)-0.35%
Max EPS beat(2)12.02%
EPS beat(4)2
Avg EPS beat(4)2.08%
Min EPS beat(4)-8.61%
Max EPS beat(4)12.02%
EPS beat(8)4
Avg EPS beat(8)-1.1%
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)0
Avg Revenue beat(2)-12.99%
Min Revenue beat(2)-16.53%
Max Revenue beat(2)-9.46%
Revenue beat(4)2
Avg Revenue beat(4)11.89%
Min Revenue beat(4)-16.53%
Max Revenue beat(4)61.75%
Revenue beat(8)5
Avg Revenue beat(8)23.33%
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0.88%
PT rev (3m)1.73%
EPS NQ rev (1m)1.62%
EPS NQ rev (3m)1.62%
EPS NY rev (1m)-0.33%
EPS NY rev (3m)1.08%
Revenue NQ rev (1m)-6.38%
Revenue NQ rev (3m)-6.38%
Revenue NY rev (1m)-4.34%
Revenue NY rev (3m)-4.11%
Valuation
Industry RankSector Rank
PE 12.56
Fwd PE 11.61
P/S 2.56
P/FCF N/A
P/OCF 9.27
P/B 1.97
P/tB 2.43
EV/EBITDA 8.38
EPS(TTM)0.36
EY7.96%
EPS(NY)0.39
Fwd EY8.61%
FCF(TTM)-0.16
FCFYN/A
OCF(TTM)0.49
OCFY10.78%
SpS1.77
BVpS2.3
TBVpS1.86
PEG (NY)1.32
PEG (5Y)3.74
Profitability
Industry RankSector Rank
ROA 5.37%
ROE 22.74%
ROCE 10.35%
ROIC 6.38%
ROICexc 6.88%
ROICexgc 7.33%
OM 40.86%
PM (TTM) 29.6%
GM 44.04%
FCFM N/A
ROA(3y)3.65%
ROA(5y)3.96%
ROE(3y)14.87%
ROE(5y)15.81%
ROIC(3y)4.37%
ROIC(5y)4.63%
ROICexc(3y)4.68%
ROICexc(5y)5.15%
ROICexgc(3y)4.99%
ROICexgc(5y)5.49%
ROCE(3y)6.96%
ROCE(5y)7.43%
ROICexcg growth 3Y-8.25%
ROICexcg growth 5Y-4.7%
ROICexc growth 3Y-8.23%
ROICexc growth 5Y-4.93%
OM growth 3Y-13.39%
OM growth 5Y-9.16%
PM growth 3Y-12.67%
PM growth 5Y-6.54%
GM growth 3Y-9.29%
GM growth 5Y-5.85%
F-Score5
Asset Turnover0.18
Health
Industry RankSector Rank
Debt/Equity 2.2
Debt/FCF N/A
Debt/EBITDA 5.02
Cap/Depr 224.05%
Cap/Sales 36.55%
Interest Coverage 8.31
Cash Conversion 48.23%
Profit Quality N/A
Current Ratio 0.79
Quick Ratio 0.56
Altman-Z 0.91
F-Score5
WACC4.48%
ROIC/WACC1.42
Cap/Depr(3y)164.8%
Cap/Depr(5y)155.48%
Cap/Sales(3y)39.08%
Cap/Sales(5y)39.02%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)3.8%
EPS 3Y0.83%
EPS 5Y3.35%
EPS Q2Q%1.11%
EPS Next Y9.5%
EPS Next 2Y6.7%
EPS Next 3Y5.29%
EPS Next 5Y4.97%
Revenue 1Y (TTM)-3.66%
Revenue growth 3Y15.68%
Revenue growth 5Y10.64%
Sales Q2Q%1.24%
Revenue Next Year-0.4%
Revenue Next 2Y2.14%
Revenue Next 3Y3.41%
Revenue Next 5Y4.64%
EBIT growth 1Y13.84%
EBIT growth 3Y0.19%
EBIT growth 5Y0.51%
EBIT Next Year86.25%
EBIT Next 3Y26.99%
EBIT Next 5Y17.92%
FCF growth 1Y-128.28%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-46.99%
OCF growth 3YN/A
OCF growth 5YN/A