UNIVERSAL MUSIC GROUP NV (UMG.AS) Stock Fundamental Analysis
Europe - Euronext Amsterdam - AMS:UMG - NL0015000IY2 - Common Stock
20.83 EUR
0 (0%)
Overall UMG gets a fundamental rating of 5 out of 10. We evaluated UMG against 46 industry peers in the Entertainment industry. While UMG belongs to the best of the industry regarding profitability, there are concerns on its financial health. UMG has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
- UMG had positive earnings in the past year.
- In the past year UMG had a positive cash flow from operations.
- Each year in the past 5 years UMG has been profitable.
- In the past 5 years UMG always reported a positive cash flow from operatings.
1.2 Ratios
- UMG has a Return On Assets of 11.40%. This is amongst the best in the industry. UMG outperforms 95.65% of its industry peers.
- UMG has a better Return On Equity (42.77%) than 95.65% of its industry peers.
- UMG has a Return On Invested Capital of 11.64%. This is amongst the best in the industry. UMG outperforms 86.96% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for UMG is significantly above the industry average of 9.28%.
- The last Return On Invested Capital (11.64%) for UMG is well below the 3 year average (17.13%), which needs to be investigated, but indicates that UMG had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.4% | ||
| ROE | 42.77% | ||
| ROIC | 11.64% |
ROA(3y)9.46%
ROA(5y)9.51%
ROE(3y)40.62%
ROE(5y)49.82%
ROIC(3y)17.13%
ROIC(5y)16.12%
1.3 Margins
- Looking at the Profit Margin, with a value of 17.63%, UMG belongs to the top of the industry, outperforming 91.30% of the companies in the same industry.
- In the last couple of years the Profit Margin of UMG has grown nicely.
- With an excellent Operating Margin value of 15.00%, UMG belongs to the best of the industry, outperforming 89.13% of the companies in the same industry.
- UMG's Operating Margin has been stable in the last couple of years.
- The Gross Margin of UMG (42.99%) is worse than 60.87% of its industry peers.
- UMG's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15% | ||
| PM (TTM) | 17.63% | ||
| GM | 42.99% |
OM growth 3Y-2.92%
OM growth 5Y0.16%
PM growth 3Y19.16%
PM growth 5Y5.36%
GM growth 3Y-2.09%
GM growth 5Y-1.63%
2. Health
2.1 Basic Checks
- UMG has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
- The number of shares outstanding for UMG has been increased compared to 1 year ago.
- The number of shares outstanding for UMG has been increased compared to 5 years ago.
- UMG has a better debt/assets ratio than last year.
2.2 Solvency
- UMG has an Altman-Z score of 0.32. This is a bad value and indicates that UMG is not financially healthy and even has some risk of bankruptcy.
- The Altman-Z score of UMG (0.32) is worse than 69.57% of its industry peers.
- UMG has a debt to FCF ratio of 2.22. This is a good value and a sign of high solvency as UMG would need 2.22 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 2.22, UMG is in the better half of the industry, outperforming 76.09% of the companies in the same industry.
- A Debt/Equity ratio of 0.54 indicates that UMG is somewhat dependend on debt financing.
- UMG has a Debt to Equity ratio (0.54) which is in line with its industry peers.
- Even though the debt/equity ratio score it not favorable for UMG, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.54 | ||
| Debt/FCF | 2.22 | ||
| Altman-Z | 0.32 |
ROIC/WACC1.67
WACC6.96%
2.3 Liquidity
- A Current Ratio of 0.63 indicates that UMG may have some problems paying its short term obligations.
- UMG has a worse Current ratio (0.63) than 63.04% of its industry peers.
- UMG has a Quick Ratio of 0.63. This is a bad value and indicates that UMG is not financially healthy enough and could expect problems in meeting its short term obligations.
- With a Quick ratio value of 0.60, UMG is not doing good in the industry: 63.04% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.63 | ||
| Quick Ratio | 0.6 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 66.18% over the past year.
- The Earnings Per Share has been growing by 15.91% on average over the past years. This is quite good.
- Looking at the last year, UMG shows a small growth in Revenue. The Revenue has grown by 6.54% in the last year.
- UMG shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.57% yearly.
EPS 1Y (TTM)66.18%
EPS 3Y32.12%
EPS 5Y15.91%
EPS Q2Q%N/A
Revenue 1Y (TTM)6.54%
Revenue growth 3Y11.64%
Revenue growth 5Y10.57%
Sales Q2Q%N/A
3.2 Future
- Based on estimates for the next years, UMG will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.57% on average per year.
- The Revenue is expected to grow by 5.97% on average over the next years.
EPS Next Y11.55%
EPS Next 2Y9.92%
EPS Next 3Y9.96%
EPS Next 5Y10.57%
Revenue Next Year5.59%
Revenue Next 2Y6.38%
Revenue Next 3Y6.65%
Revenue Next 5Y5.97%
3.3 Evolution
- The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past 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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- UMG is valuated rather expensively with a Price/Earnings ratio of 18.43.
- 86.96% of the companies in the same industry are more expensive than UMG, based on the Price/Earnings ratio.
- The average S&P500 Price/Earnings ratio is at 28.60. UMG is valued slightly cheaper when compared to this.
- UMG is valuated rather expensively with a Price/Forward Earnings ratio of 18.82.
- Based on the Price/Forward Earnings ratio, UMG is valued a bit cheaper than 78.26% of the companies in the same industry.
- UMG is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.83, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.43 | ||
| Fwd PE | 18.82 |
4.2 Price Multiples
- UMG's Enterprise Value to EBITDA ratio is in line with the industry average.
- UMG's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. UMG is cheaper than 63.04% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.69 | ||
| EV/EBITDA | 18.94 |
4.3 Compensation for Growth
- UMG's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- UMG has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.6
PEG (5Y)1.16
EPS Next 2Y9.92%
EPS Next 3Y9.96%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.50%, UMG has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 0.83, UMG pays a better dividend. On top of this UMG pays more dividend than 91.30% of the companies listed in the same industry.
- UMG's Dividend Yield is a higher than the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.5% |
5.2 History
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years3
5.3 Sustainability
- UMG pays out 44.87% of its income as dividend. This is a bit on the high side, but may be sustainable.
DP44.87%
EPS Next 2Y9.92%
EPS Next 3Y9.96%
UNIVERSAL MUSIC GROUP NV / UMG.AS FAQ
Can you provide the ChartMill fundamental rating for UNIVERSAL MUSIC GROUP NV?
ChartMill assigns a fundamental rating of 5 / 10 to UMG.AS.
What is the valuation status of UNIVERSAL MUSIC GROUP NV (UMG.AS) stock?
ChartMill assigns a valuation rating of 5 / 10 to UNIVERSAL MUSIC GROUP NV (UMG.AS). This can be considered as Fairly Valued.
How profitable is UNIVERSAL MUSIC GROUP NV (UMG.AS) stock?
UNIVERSAL MUSIC GROUP NV (UMG.AS) has a profitability rating of 8 / 10.
Can you provide the PE and PB ratios for UMG stock?
The Price/Earnings (PE) ratio for UNIVERSAL MUSIC GROUP NV (UMG.AS) is 18.43 and the Price/Book (PB) ratio is 7.83.
Is the dividend of UNIVERSAL MUSIC GROUP NV sustainable?
The dividend rating of UNIVERSAL MUSIC GROUP NV (UMG.AS) is 4 / 10 and the dividend payout ratio is 44.87%.