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UNIVERSAL MUSIC GROUP NV (UMG.AS) Stock Fundamental Analysis

AMS:UMG - Euronext Amsterdam - NL0015000IY2 - Common Stock - Currency: EUR

26.94  -0.16 (-0.59%)

Fundamental Rating

4

UMG gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 44 industry peers in the Entertainment industry. UMG has a medium profitability rating, but doesn't score so well on its financial health evaluation. UMG is quite expensive at the moment. It does show a decent growth rate.


Dividend Valuation Growth Profitability Health

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6

1. Profitability

1.1 Basic Checks

In the past year UMG was profitable.
In the past year UMG had a positive cash flow from operations.
In the past 5 years UMG has always been profitable.
In the past 5 years UMG always reported a positive cash flow from operatings.
UMG.AS Yearly Net Income VS EBIT VS OCF VS FCFUMG.AS Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2018 2019 2020 2021 2022 2023 500M 1B 1.5B

1.2 Ratios

UMG has a better Return On Assets (8.30%) than 90.00% of its industry peers.
Looking at the Return On Equity, with a value of 36.72%, UMG belongs to the top of the industry, outperforming 95.00% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 14.25%, UMG belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
Industry RankSector Rank
ROA 8.3%
ROE 36.72%
ROIC 14.25%
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
UMG.AS Yearly ROA, ROE, ROICUMG.AS Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2018 2019 2020 2021 2022 2023 20 40 60 80

1.3 Margins

Looking at the Profit Margin, with a value of 11.33%, UMG is in the better half of the industry, outperforming 77.50% of the companies in the same industry.
In the last couple of years the Profit Margin of UMG has declined.
UMG's Operating Margin of 12.77% is fine compared to the rest of the industry. UMG outperforms 80.00% of its industry peers.
UMG's Operating Margin has declined in the last couple of years.
UMG's Gross Margin of 44.11% is on the low side compared to the rest of the industry. UMG is outperformed by 65.00% of its industry peers.
UMG's Gross Margin has declined in the last couple of years.
Industry RankSector Rank
OM 12.77%
PM (TTM) 11.33%
GM 44.11%
OM growth 3Y-8.78%
OM growth 5Y-2.01%
PM growth 3Y-14.88%
PM growth 5Y-5.31%
GM growth 3Y-2.3%
GM growth 5Y-1.82%
UMG.AS Yearly Profit, Operating, Gross MarginsUMG.AS Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2018 2019 2020 2021 2022 2023 10 20 30 40

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3

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), UMG is creating value.
UMG has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
UMG.AS Yearly Shares OutstandingUMG.AS Yearly Shares OutstandingYearly Shares Outstanding 2018 2019 2020 2021 2022 500M 1B 1.5B
UMG.AS Yearly Total Debt VS Total AssetsUMG.AS Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2018 2019 2020 2021 2022 2B 4B 6B 8B 10B

2.2 Solvency

UMG has an Altman-Z score of 0.58. This is a bad value and indicates that UMG is not financially healthy and even has some risk of bankruptcy.
UMG has a Altman-Z score (0.58) which is in line with its industry peers.
The Debt to FCF ratio of UMG is 2.29, which is a good value as it means it would take UMG, 2.29 years of fcf income to pay off all of its debts.
UMG has a Debt to FCF ratio of 2.29. This is in the better half of the industry: UMG outperforms 77.50% of its industry peers.
UMG has a Debt/Equity ratio of 0.68. This is a neutral value indicating UMG is somewhat dependend on debt financing.
UMG's Debt to Equity ratio of 0.68 is in line compared to the rest of the industry. UMG outperforms 50.00% of 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 RankSector Rank
Debt/Equity 0.68
Debt/FCF 2.29
Altman-Z 0.58
ROIC/WACC2.06
WACC6.92%
UMG.AS Yearly LT Debt VS Equity VS FCFUMG.AS Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2018 2019 2020 2021 2022 2023 1B 2B 3B

2.3 Liquidity

UMG has a Current Ratio of 0.58. This is a bad value and indicates that UMG is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.58, UMG is doing worse than 70.00% of the companies in the same industry.
UMG has a Quick Ratio of 0.58. 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 0.55, UMG is not doing good in the industry: 67.50% of the companies in the same industry are doing better.
Industry RankSector Rank
Current Ratio 0.58
Quick Ratio 0.55
UMG.AS Yearly Current Assets VS Current LiabilitesUMG.AS Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2018 2019 2020 2021 2022 2B 4B 6B

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5

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 58.95% over the past year.
UMG shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.88% yearly.
Looking at the last year, UMG shows a small growth in Revenue. The Revenue has grown by 7.43% in the last year.
The Revenue has been growing by 13.02% on average over the past years. This is quite good.
EPS 1Y (TTM)58.95%
EPS 3Y-3.05%
EPS 5Y6.88%
EPS Q2Q%7.32%
Revenue 1Y (TTM)7.43%
Revenue growth 3Y14.33%
Revenue growth 5Y13.02%
Sales Q2Q%7.34%

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 10.66% on average per year.
UMG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.24% yearly.
EPS Next Y8.69%
EPS Next 2Y10.75%
EPS Next 3Y11.54%
EPS Next 5Y10.66%
Revenue Next Year6.82%
Revenue Next 2Y7.19%
Revenue Next 3Y7.31%
Revenue Next 5Y7.24%

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.
UMG.AS Yearly Revenue VS EstimatesUMG.AS Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 5B 10B 15B
UMG.AS Yearly EPS VS EstimatesUMG.AS Yearly EPS VS EstimatesYearly EPS VS Estimates 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 0.5 1 1.5

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3

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 39.62, UMG can be considered very expensive at the moment.
UMG's Price/Earnings ratio is a bit cheaper when compared to the industry. UMG is cheaper than 65.00% of the companies in the same industry.
UMG is valuated rather expensively when we compare the Price/Earnings ratio to 28.47, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 25.93, which means the current valuation is very expensive for UMG.
The rest of the industry has a similar Price/Forward Earnings ratio as UMG.
UMG is valuated cheaply when we compare the Price/Forward Earnings ratio to 92.74, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 39.62
Fwd PE 25.93
UMG.AS Price Earnings VS Forward Price EarningsUMG.AS Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60 80

4.2 Price Multiples

65.00% of the companies in the same industry are cheaper than UMG, based on the Enterprise Value to EBITDA ratio.
The rest of the industry has a similar Price/Free Cash Flow ratio as UMG.
Industry RankSector Rank
P/FCF 31.31
EV/EBITDA 29.26
UMG.AS Per share dataUMG.AS EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 2 4 6

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates UMG does not grow enough to justify the current Price/Earnings ratio.
UMG has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)4.56
PEG (5Y)5.76
EPS Next 2Y10.75%
EPS Next 3Y11.54%

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3

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 1.89%, UMG has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.26, UMG pays a better dividend. On top of this UMG pays more dividend than 92.50% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.28, UMG has a dividend comparable with the average S&P500 company.
Industry RankSector Rank
Dividend Yield 1.89%

5.2 History

Dividend Growth(5Y)N/A
Div Incr Years2
Div Non Decr Years3
UMG.AS Yearly Dividends per shareUMG.AS Yearly Dividends per shareYearly Dividends per share 2021 2022 2023 2024 0.1 0.2 0.3 0.4 0.5

5.3 Sustainability

73.95% of the earnings are spent on dividend by UMG. This is not a sustainable payout ratio.
DP73.95%
EPS Next 2Y10.75%
EPS Next 3Y11.54%
UMG.AS Yearly Income VS Free CF VS DividendUMG.AS Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2018 2019 2020 2021 2022 2023 500M 1B 1.5B
UMG.AS Dividend Payout.UMG.AS Dividend Payout, showing the Payout Ratio.UMG.AS Dividend Payout.PayoutRetained Earnings

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UNIVERSAL MUSIC GROUP NV

AMS:UMG (2/5/2025, 11:25:56 AM)

26.94

-0.16 (-0.59%)

Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)10-31 2024-10-31
Earnings (Next)02-27 2025-02-27/amc
Inst Owners30.14%
Inst Owner ChangeN/A
Ins Owners17.88%
Ins Owner ChangeN/A
Market Cap49.28B
Analysts72.31
Price Target26.82 (-0.45%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 1.89%
Yearly Dividend0.44
Dividend Growth(5Y)N/A
DP73.95%
Div Incr Years2
Div Non Decr Years3
Ex-DateN/A
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
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)N/A
Avg Revenue beat(2)N/A
Min Revenue beat(2)N/A
Max Revenue beat(2)N/A
Revenue beat(4)N/A
Avg Revenue beat(4)N/A
Min Revenue beat(4)N/A
Max Revenue beat(4)N/A
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
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)0.89%
PT rev (3m)0.89%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)0.45%
EPS NY rev (3m)-1.85%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0.08%
Revenue NY rev (3m)-0.03%
Valuation
Industry RankSector Rank
PE 39.62
Fwd PE 25.93
P/S 4.44
P/FCF 31.31
P/OCF 30.29
P/B 14.37
P/tB N/A
EV/EBITDA 29.26
EPS(TTM)0.68
EY2.52%
EPS(NY)1.04
Fwd EY3.86%
FCF(TTM)0.86
FCFY3.19%
OCF(TTM)0.89
OCFY3.3%
SpS6.07
BVpS1.87
TBVpS-1.86
PEG (NY)4.56
PEG (5Y)5.76
Profitability
Industry RankSector Rank
ROA 8.3%
ROE 36.72%
ROCE 17.8%
ROIC 14.25%
ROICexc 15.12%
ROICexgc 162.44%
OM 12.77%
PM (TTM) 11.33%
GM 44.11%
FCFM 14.17%
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3Y-8.78%
OM growth 5Y-2.01%
PM growth 3Y-14.88%
PM growth 5Y-5.31%
GM growth 3Y-2.3%
GM growth 5Y-1.82%
F-Score5
Asset Turnover0.73
Health
Industry RankSector Rank
Debt/Equity 0.68
Debt/FCF 2.29
Debt/EBITDA 1.29
Cap/Depr 13.87%
Cap/Sales 0.48%
Interest Coverage 83.41
Cash Conversion 90.39%
Profit Quality 125.02%
Current Ratio 0.58
Quick Ratio 0.55
Altman-Z 0.58
F-Score5
WACC6.92%
ROIC/WACC2.06
Cap/Depr(3y)8.58%
Cap/Depr(5y)15.03%
Cap/Sales(3y)0.3%
Cap/Sales(5y)0.47%
Profit Quality(3y)163.48%
Profit Quality(5y)123.78%
High Growth Momentum
Growth
EPS 1Y (TTM)58.95%
EPS 3Y-3.05%
EPS 5Y6.88%
EPS Q2Q%7.32%
EPS Next Y8.69%
EPS Next 2Y10.75%
EPS Next 3Y11.54%
EPS Next 5Y10.66%
Revenue 1Y (TTM)7.43%
Revenue growth 3Y14.33%
Revenue growth 5Y13.02%
Sales Q2Q%7.34%
Revenue Next Year6.82%
Revenue Next 2Y7.19%
Revenue Next 3Y7.31%
Revenue Next 5Y7.24%
EBIT growth 1Y-11.37%
EBIT growth 3Y4.29%
EBIT growth 5Y10.75%
EBIT Next Year52.71%
EBIT Next 3Y23.89%
EBIT Next 5Y17.3%
FCF growth 1Y26.63%
FCF growth 3Y27.01%
FCF growth 5Y23.61%
OCF growth 1Y28.92%
OCF growth 3Y26.74%
OCF growth 5Y20.34%