BAE Systems plc (BA) is a leading aerospace & defense business based in the UK. BAE Systems is listed on the London Stock Exchange (LSE) and employs 88,400 staff. All prices are listed in pence sterling.
Since the stock market crash in March caused by coronavirus, BAE Systems's share price has had significant negative movement.
Its last market close was 498.7p, which is 25.46% down on its pre-crash value of 669p and 16.36% up on the lowest point reached during the March crash when the shares fell as low as 428.6p.
If you had bought £1,000 worth of BAE Systems shares at the start of February 2020, those shares would have been worth £683.63 at the bottom of the March crash, and if you held on to them, then as of the last market close they'd be worth £776.78.
|52-week range||428.6p - 672.8p|
|50-day moving average||518.9222p|
|200-day moving average||511.5676p|
|Wall St. target price||652.67p|
|Dividend yield||0.19p (3.54%)|
|Earnings per share (TTM)||37.8p|
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Valuing BAE Systems stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of BAE Systems's overall performance. However, analysts commonly use some key metrics to help gauge the value of a stock.
BAE Systems's current share price divided by its per-share earnings (EPS) over a 12-month period gives a "trailing price/earnings ratio" of roughly 13x. In other words, BAE Systems shares trade at around 13x recent earnings.
That's relatively low compared to, say, the trailing 12-month P/E ratio for the FTSE 250 at the end of September 2019 (19.71). The low P/E ratio could mean that investors are pessimistic about the outlook for the shares or simply that they're under-valued.
However, BAE Systems's P/E ratio is best considered in relation to those of others within the aerospace & defense industry or those of similar companies.
BAE Systems's "price/earnings-to-growth ratio" can be calculated by dividing its P/E ratio by its growth – to give 5.4283. 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 BAE Systems'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 BAE Systems's PEG ratio in relation to those of similar companies.
BAE Systems's EBITDA (earnings before interest, taxes, depreciation and amortisation) is a whopping £1.9 billion.
The EBITDA is a measure of a BAE Systems's overall financial performance and is widely used to measure a its profitability.
To put BAE Systems's EBITDA into context you can compare it against that of similar companies.
|Revenue TTM||£18.8 billion|
|Operating margin TTM||8.68%|
|Gross profit TTM||£11.8 billion|
|Return on assets TTM||3.87%|
|Return on equity TTM||24.95%|
|Market capitalisation||£16.9 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 BAE Systems.
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: 33.34
Socially conscious investors use ESG scores to screen how an investment aligns with their worldview, and BAE Systems's overall score of 33.34 (as at 08/01/2020) is pretty weak – landing it in it in the 72nd percentile of companies rated in the same sector.
ESG scores are increasingly used to estimate the level of risk a company like BAE Systems 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 BAE Systems's total ESG risk score against those of similar companies.
Environmental score: 8.25/100
BAE Systems's environmental score of 8.25 puts it squarely in the 1st percentile of companies rated in the same sector. This could suggest that BAE Systems is a leader in its sector terms of its environmental impact, and exposed to a lower level of risk.
Social score: 16.55/100
BAE Systems's social score of 16.55 puts it squarely in the 1st percentile of companies rated in the same sector. This could suggest that BAE Systems is a leader in its sector when it comes to taking good care of its workforce and the communities it impacts.
Governance score: 6.03/100
BAE Systems's governance score puts it squarely in the 1st percentile of companies rated in the same sector. That could suggest that BAE Systems is a leader in its sector when it comes to responsible management and strategy, and exposed to a lower level of risk.
Controversy score: 3/5
ESG scores also evaluate any incidences of controversy that a company has been involved in. A high-profile company, BAE Systems scored a 3 out of 5 for controversy – a middle-of-the-table result reflecting that BAE Systems hasn't always managed to keep its nose clean.
Wondering how that compares? Below are the controversy scores of similar companies.
|Total ESG score||33.34|
|Total ESG percentile||71.96|
|Environmental score percentile||1|
|Social score percentile||1|
|Governance score percentile||1|
|Level of controversy||3|
Dividend payout ratio: 24.87% of net profits
Recently BAE Systems has paid out, on average, around 24.87% of net profits as dividends. That has enabled analysts to estimate a "forward annual dividend yield" of 3.54% of the current stock value. This means that over a year, based on recent payouts (which are sadly no guarantee of future payouts), BAE Systems shareholders could enjoy a 3.54% return on their shares, in the form of dividend payments. In BAE Systems's case, that would currently equate to about 0.19p per share.
While BAE Systems's payout ratio might seem low, this can signify that BAE Systems is investing more in its future growth.
The latest dividend was paid out to all shareholders who bought their shares by 22 October 2020 (the "ex-dividend date").
BAE Systems's dividend payout ratio is perhaps best considered in relation to those of similar companies.
BAE Systems's shares were split on a 4:1 basis on 5 May 1998. So if you had owned 1 share the day before before the split, the next day you'd have owned 4 shares. This wouldn't directly have changed the overall worth of your BAE Systems shares – just the quantity. However, indirectly, the new 75% lower share price could have impacted the market appetite for BAE Systems shares which in turn could have impacted BAE Systems's share price.
Over the last 12 months, BAE Systems's shares have ranged in value from as little as 428.6p up to 672.8p. 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 BAE Systems's is 0.4422. This would suggest that BAE Systems's shares are less volatile than average (for this exchange).
To put BAE Systems's beta into context you can compare it against those of similar companies.
BAE Systems plc provides defense, aerospace, and security solutions worldwide. The company operates through five segments: Electronic Systems, Cyber & Intelligence, Platforms & Services (US), Air, and Maritime. The Electronic Systems segment offers electronic warfare systems, electro-optical sensors, military and commercial digital engine and flight controls, precision guidance and seeker solutions, military communication systems and data links, persistent surveillance systems, and hybrid electric drive systems. The Cyber & Intelligence segment provides solutions to modernize, maintain, and test cyber-harden aircraft, radars, missile systems, and mission applications that detect and deter threats to national security; systems engineering, integration, and sustainment services for C4ISR systems and enterprise IT networks; and solutions and services to enhance the collection, analysis, and processing of data across the US civilian and military intelligence communities. It also offers data intelligence solutions to defend against national-scale threats, protect their networks, and data against attacks; security and intelligence solutions to the United Kingdom government and allied international governments; anti-fraud and regulatory compliance solutions; and enterprise-level data and digital services. The Platforms & Services (US) segment manufactures combat vehicles, weapons, and munitions, as well as provides ship repair services and the management of government-owned munitions facilities. The Air segment develops, manufactures, upgrades, and supports combat and jet trainer aircraft. The Maritime segment designs, manufactures, and supports surface ships, submarines, torpedoes, radars, and command and combat systems; and supplies naval gun systems. It also supplies naval weapon systems, missile launchers, and precision munitions. The company was incorporated in 1979 and is based in London, the United Kingdom.
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