Associated British Foods plc (ABF) is a leading packaged foods business based in the UK. Associated British Foods is listed on the London Stock Exchange (LSE) and employs 133,000 staff. All prices are listed in pence sterling.
|52-week range||1554p - 2730p|
|50-day moving average||2263.5588p|
|200-day moving average||2003.588p|
|Wall St. target price||2786.87p|
|Dividend yield||0.46p (2.33%)|
|Earnings per share (TTM)||57.6p|
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Valuing Associated British Foods stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of Associated British Foods's overall performance. However, analysts commonly use some key metrics to help gauge the value of a stock.
Associated British Foods's current share price divided by its per-share earnings (EPS) over a 12-month period gives a "trailing price/earnings ratio" of roughly 39x. In other words, Associated British Foods shares trade at around 39x recent earnings.
That's relatively high compared to, say, the trailing 12-month P/E ratio for the FTSE 250 at the end of September 2019 (19.71). The high P/E ratio could mean that investors are optimistic about the outlook for the shares or simply that they're over-valued.
However, Associated British Foods's P/E ratio is best considered in relation to those of others within the packaged foods industry or those of similar companies.
Associated British Foods's "price/earnings-to-growth ratio" can be calculated by dividing its P/E ratio by its growth – to give 3.1787. A low ratio can be interpreted as meaning the shares offer better value, while a higher ratio can be interpreted as meaning the shares offer worse value.
The PEG ratio provides a broader view than just the P/E ratio, as it gives more insight into Associated British Foods's future profitability. By accounting for growth, it could also help you if you're comparing the share prices of multiple high-growth companies.
However, it's sensible to consider Associated British Foods's PEG ratio in relation to those of similar companies.
Associated British Foods's EBITDA (earnings before interest, taxes, depreciation and amortisation) is a whopping £1.5 billion.
The EBITDA is a measure of a Associated British Foods's overall financial performance and is widely used to measure a its profitability.
To put Associated British Foods's EBITDA into context you can compare it against that of similar companies.
|Revenue TTM||£13.9 billion|
|Operating margin TTM||6.41%|
|Gross profit TTM||£3.1 billion|
|Return on assets TTM||3.67%|
|Return on equity TTM||4.9%|
|Market capitalisation||£17.8 billion|
TTM: trailing 12 months
Environmental, social and governance (known as ESG) criteria are a set of three factors used to measure the sustainability and social impact of companies like Associated British Foods.
When it comes to ESG scores, lower is better, and lower scores are generally associated with lower risk for would-be investors.
Total ESG risk: 33.12
Socially conscious investors use ESG scores to screen how an investment aligns with their worldview, and Associated British Foods's overall score of 33.12 (as at 01/01/2019) is nothing to write home about – landing it in it in the 60th percentile of companies rated in the same sector.
ESG scores are increasingly used to estimate the level of risk a company like Associated British Foods is exposed to within the areas of "environmental" (carbon footprint, resource use etc.), "social" (health and safety, human rights etc.), and "governance" (anti-corruption, tax transparency etc.).
To gain some more context, you can compare Associated British Foods's total ESG risk score against those of similar companies.
Environmental score: 9.78/100
Associated British Foods's environmental score of 9.78 puts it squarely in the 4th percentile of companies rated in the same sector. This could suggest that Associated British Foods is a leader in its sector terms of its environmental impact, and exposed to a lower level of risk.
Social score: 17.4/100
Associated British Foods's social score of 17.4 puts it squarely in the 4th percentile of companies rated in the same sector. This could suggest that Associated British Foods is a leader in its sector when it comes to taking good care of its workforce and the communities it impacts.
Governance score: 6.94/100
Associated British Foods's governance score puts it squarely in the 4th percentile of companies rated in the same sector. That could suggest that Associated British Foods is a leader in its sector when it comes to responsible management and strategy, and exposed to a lower level of risk.
Controversy score: 2/5
ESG scores also evaluate any incidences of controversy that a company has been involved in. A high-profile company, Associated British Foods scored a 2 out of 5 for controversy – the second-highest score possible, reflecting that Associated British Foods has, for the most part, managed to keep its nose clean.
Wondering how that compares? Below are the controversy scores of similar companies.
|Total ESG score||33.12|
|Total ESG percentile||59.94|
|Environmental score percentile||4|
|Social score percentile||4|
|Governance score percentile||4|
|Level of controversy||2|
Dividend payout ratio: 59.55% of net profits
Recently Associated British Foods has paid out, on average, around 59.55% of net profits as dividends. That has enabled analysts to estimate a "forward annual dividend yield" of 2.33% of the current stock value. This means that over a year, based on recent payouts (which are sadly no guarantee of future payouts), Associated British Foods shareholders could enjoy a 2.33% return on their shares, in the form of dividend payments. In Associated British Foods's case, that would currently equate to about 0.46p per share.
Associated British Foods's payout ratio would broadly be considered high, and as such this stock could appeal to those looking to generate an income. Bear in mind however that companies should normally also look to re-invest a decent amount of net profits to ensure future growth.
The latest dividend was paid out to all shareholders who bought their shares by 12 December 2019 (the "ex-dividend date").
Associated British Foods's dividend payout ratio is perhaps best considered in relation to those of similar companies.
Associated British Foods's shares were split on a 88:100 basis on 10 May 1999. So if you had owned 100 shares the day before before the split, the next day you'd have owned 88 shares. This wouldn't directly have changed the overall worth of your Associated British Foods shares – just the quantity. However, indirectly, the new 13.6% higher share price could have impacted the market appetite for Associated British Foods shares which in turn could have impacted Associated British Foods's share price.
Over the last 12 months, Associated British Foods's shares have ranged in value from as little as 1554p up to 2730p. A popular way to gauge a stock's volatility is its "beta".
Beta is a measure of a share's volatility in relation to the market. The market (LSE average) beta is 1, while Associated British Foods's is 1.0312. This would suggest that Associated British Foods's shares are a little bit more volatile than the average for this exchange and represent, relatively-speaking, a slightly higher risk (but potentially also market-beating returns).
To put Associated British Foods's beta into context you can compare it against those of similar companies.
Associated British Foods plc operates as a diversified food, ingredients, and retail company worldwide. It operates through five segments: Grocery, Sugar, Agriculture, Ingredients, and Retail. The Grocery segment manufactures and sells grocery products, including hot beverages, sugar and sweeteners, vegetable oils, balsamic vinegars, bread and baked goods, cereals, ethnic foods, and meat products to retail, wholesale, and foodservice businesses. The Sugar segment is involved in growing, processing, and sale of sugar beet and sugar cane to industrial users. The Agriculture segment manufactures and sells animal feeds; and provides other products and services for the agriculture sector. The Ingredients segment manufactures bakers' yeast, bakery ingredients, enzymes, lipids, yeast extracts, and cereal specialties. The Retail segment is involved in buying and merchandising clothing and accessories through the Primark and Penneys retail chains, which offer womenswear, menswear, children's wear, footwear, accessories, homeware, and skincare products. The company was founded in 1935 and is headquartered in London, the United Kingdom. Associated British Foods plc is a subsidiary of Wittington Investments Limited.
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