| Weir Group PLC (GB0009465807) | |||
25,24 GBXStand (close): 03.07.25 |
 |
||
Nachrichten |
||
| Datum / Uhrzeit | Titel | Bewertung |
| 11.04.25 05:59:34 | The total return for Weir Group (LON:WEIR) investors has risen faster than earnings growth over the last five years |  |
| The Weir Group PLC (LON:WEIR) shareholders have seen the share price descend 11% over the month. But that doesn't change the fact that the returns over the last five years have been very strong. Indeed, the share price is up an impressive 159% in that time. We think it's more important to dwell on the long term returns than the short term returns. Ultimately business performance will determine whether the stock price continues the positive long term trend. While the stock has fallen 5.0% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS). During five years of share price growth, Weir Group achieved compound earnings per share (EPS) growth of 17% per year. This EPS growth is reasonably close to the 21% average annual increase in the share price. This indicates that investor sentiment towards the company has not changed a great deal. Rather, the share price has approximately tracked EPS growth. The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).LSE:WEIR Earnings Per Share Growth April 11th 2025 We know that Weir Group has improved its bottom line lately, but is it going to grow revenue? If you're interested, you could check this freereport showing consensus revenue forecasts . What About Dividends? As well as measuring the share price return, investors should also consider the total shareholder return (TSR). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Weir Group the TSR over the last 5 years was 176%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence! A Different Perspective It's good to see that Weir Group has rewarded shareholders with a total shareholder return of 4.7% in the last twelve months. That's including the dividend. However, the TSR over five years, coming in at 23% per year, is even more impressive. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling. Story Continues For those who like to find winning investments this freelist of undervalued companies with recent insider purchasing, could be just the ticket. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on British exchanges. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
||
| 25.03.25 12:47:03 | Weir Group's (LON:WEIR) Upcoming Dividend Will Be Larger Than Last Year's |  |
| The Weir Group PLC (LON:WEIR) will increase its dividend from last year's comparable payment on the 30th of May to £0.221. Despite this raise, the dividend yield of 1.7% is only a modest boost to shareholder returns. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. Weir Group's Projected Earnings Seem Likely To Cover Future Distributions It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. Before making this announcement, Weir Group was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business. Over the next year, EPS is forecast to expand by 31.1%. If the dividend continues along recent trends, we estimate the payout ratio will be 23%, which is in the range that makes us comfortable with the sustainability of the dividend.LSE:WEIR Historic Dividend March 25th 2025 Check out our latest analysis for Weir Group Dividend Volatility The company's dividend history has been marked by instability, with at least one cut in the last 10 years. Since 2015, the annual payment back then was £0.44, compared to the most recent full-year payment of £0.40. The dividend has shrunk at a rate of less than 1% a year over this period. A company that decreases its dividend over time generally isn't what we are looking for. The Dividend Looks Likely To Grow Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. We are encouraged to see that Weir Group has grown earnings per share at 17% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time. We Really Like Weir Group's Dividend In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All of these factors considered, we think this has solid potential as a dividend stock. Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 17 analysts we track are forecasting for Weir Group for free with public analyst estimates for the company. Is Weir Group not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
||
| 19.03.25 13:05:10 | Is The Weir Group PLC's (LON:WEIR) Latest Stock Performance Being Led By Its Strong Fundamentals? | |
| Weir Group's (LON:WEIR) stock is up by 6.9% over the past three months. Given its impressive performance, we decided to study the company's key financial indicators as a company's long-term fundamentals usually dictate market outcomes. In this article, we decided to focus on Weir Group's ROE. Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. Put another way, it reveals the company's success at turning shareholder investments into profits. View our latest analysis for Weir Group How To Calculate Return On Equity? The formula for ROE is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Weir Group is: 17% = UK£315m ÷ UK£1.9b (Based on the trailing twelve months to December 2024). The 'return' is the yearly profit. That means that for every £1 worth of shareholders' equity, the company generated £0.17 in profit. What Is The Relationship Between ROE And Earnings Growth? So far, we've learned that ROE is a measure of a company's profitability. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics. Weir Group's Earnings Growth And 17% ROE To begin with, Weir Group seems to have a respectable ROE. Further, the company's ROE is similar to the industry average of 15%. This probably goes some way in explaining Weir Group's moderate 17% growth over the past five years amongst other factors. As a next step, we compared Weir Group's net income growth with the industry, and pleasingly, we found that the growth seen by the company is higher than the average industry growth of 9.3%.LSE:WEIR Past Earnings Growth March 19th 2025 The basis for attaching value to a company is, to a great extent, tied to its earnings growth. It’s important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. Is WEIR fairly valued? This infographic on the company's intrinsic value has everything you need to know. Is Weir Group Efficiently Re-investing Its Profits? Weir Group has a healthy combination of a moderate three-year median payout ratio of 40% (or a retention ratio of 60%) and a respectable amount of growth in earnings as we saw above, meaning that the company has been making efficient use of its profits. Story Continues Besides, Weir Group has been paying dividends for at least ten years or more. This shows that the company is committed to sharing profits with its shareholders. Our latest analyst data shows that the future payout ratio of the company over the next three years is expected to be approximately 33%. Therefore, the company's future ROE is also not expected to change by much with analysts predicting an ROE of 17%. Summary Overall, we are quite pleased with Weir Group's performance. In particular, it's great to see that the company is investing heavily into its business and along with a high rate of return, that has resulted in a sizeable growth in its earnings. With that said, the latest industry analyst forecasts reveal that the company's earnings growth is expected to slow down. Are these analysts expectations based on the broad expectations for the industry, or on the company's fundamentals? Click here to be taken to our analyst's forecasts page for the company. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
||
| 03.03.25 05:22:26 | Weir Group (LON:WEIR) Will Pay A Larger Dividend Than Last Year At £0.221 | |
| The Weir Group PLC's (LON:WEIR) periodic dividend will be increasing on the 30th of May to £0.221, with investors receiving 6.3% more than last year's £0.208. Although the dividend is now higher, the yield is only 1.6%, which is below the industry average. View our latest analysis for Weir Group Weir Group's Payment Could Potentially Have Solid Earnings Coverage It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. Before making this announcement, Weir Group was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow. The next year is set to see EPS grow by 31.1%. If the dividend continues along recent trends, we estimate the payout ratio will be 23%, which is in the range that makes us comfortable with the sustainability of the dividend.LSE:WEIR Historic Dividend March 3rd 2025 Dividend Volatility The company has a long dividend track record, but it doesn't look great with cuts in the past. Since 2015, the annual payment back then was £0.42, compared to the most recent full-year payment of £0.387. Dividend payments have shrunk at a rate of less than 1% per annum over this time frame. Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges. The Dividend Looks Likely To Grow Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Weir Group has impressed us by growing EPS at 17% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Weir Group's prospects of growing its dividend payments in the future. Weir Group Looks Like A Great Dividend Stock In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock. Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 15 analysts we track are forecasting for Weir Group for free with public analyst estimates for the company. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
||
| 01.03.25 07:38:59 | Weir Group Full Year 2024 Earnings: EPS Beats Expectations, Revenues Lag | |
| Weir Group (LON:WEIR) Full Year 2024 Results Key Financial Results Revenue: UK£2.51b (down 4.9% from FY 2023). Net income: UK£315.1m (up 38% from FY 2023). Profit margin: 13% (up from 8.7% in FY 2023). The increase in margin was driven by lower expenses. EPS: UK£1.22 (up from UK£0.89 in FY 2023).LSE:WEIR Earnings and Revenue Growth March 1st 2025 All figures shown in the chart above are for the trailing 12 month (TTM) period Weir Group EPS Beats Expectations, Revenues Fall Short Revenue missed analyst estimates by 3.6%. Earnings per share (EPS) exceeded analyst estimates by 22%. Looking ahead, revenue is forecast to grow 6.8% p.a. on average during the next 3 years, compared to a 5.0% growth forecast for the Machinery industry in the United Kingdom. Performance of the British Machinery industry. The company's shares are up 5.5% from a week ago. Balance Sheet Analysis While earnings are important, another area to consider is the balance sheet. See our latest analysis on Weir Group's balance sheet health. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
||
| 26.02.25 06:21:32 | Calculating The Fair Value Of The Weir Group PLC (LON:WEIR) | |
| Key Insights The projected fair value for Weir Group is UK£19.14 based on 2 Stage Free Cash Flow to Equity Current share price of UK£22.60 suggests Weir Group is potentially trading close to its fair value The UK£24.23 analyst price target for WEIR is 27% more than our estimate of fair value Today we'll do a simple run through of a valuation method used to estimate the attractiveness of The Weir Group PLC (LON:WEIR) as an investment opportunity by taking the expected future cash flows and discounting them to today's value. We will use the Discounted Cash Flow (DCF) model on this occasion. It may sound complicated, but actually it is quite simple! We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model. View our latest analysis for Weir Group The Calculation We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate: 10-year free cash flow (FCF) estimate 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (£, Millions) UK£270.6m UK£323.0m UK£319.3m UK£318.9m UK£320.8m UK£324.4m UK£329.2m UK£334.8m UK£341.2m UK£348.0m Growth Rate Estimate Source Analyst x7 Analyst x7 Est @ -1.16% Est @ -0.12% Est @ 0.60% Est @ 1.11% Est @ 1.47% Est @ 1.72% Est @ 1.89% Est @ 2.02% Present Value (£, Millions) Discounted @ 8.1% UK£250 UK£276 UK£253 UK£233 UK£217 UK£203 UK£191 UK£179 UK£169 UK£159 ("Est" = FCF growth rate estimated by Simply Wall St) Present Value of 10-year Cash Flow (PVCF) = UK£2.1b Story Continues The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.3%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 8.1%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = UK£348m× (1 + 2.3%) ÷ (8.1%– 2.3%) = UK£6.1b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= UK£6.1b÷ ( 1 + 8.1%)10= UK£2.8b The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is UK£4.9b. To get the intrinsic value per share, we divide this by the total number of shares outstanding. Relative to the current share price of UK£22.6, the company appears around fair value at the time of writing. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out.LSE:WEIR Discounted Cash Flow February 26th 2025 The Assumptions We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Weir Group as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.1%, which is based on a levered beta of 1.134. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. SWOT Analysis for Weir Group Strength Debt is not viewed as a risk. Dividends are covered by earnings and cash flows. Weakness Earnings declined over the past year. Dividend is low compared to the top 25% of dividend payers in the Machinery market. Expensive based on P/E ratio and estimated fair value. Opportunity Annual earnings are forecast to grow faster than the British market. Threat Revenue is forecast to grow slower than 20% per year. Moving On: Valuation is only one side of the coin in terms of building your investment thesis, and it ideally won't be the sole piece of analysis you scrutinize for a company. DCF models are not the be-all and end-all of investment valuation. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. For Weir Group, there are three pertinent aspects you should further research: Financial Health: Does WEIR have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk. Future Earnings: How does WEIR's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the LSE every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
||
| 22.12.24 07:57:14 | Is It Too Late To Consider Buying The Weir Group PLC (LON:WEIR)? | |
| While The Weir Group PLC (LON:WEIR) might not have the largest market cap around , it saw significant share price movement during recent months on the LSE, rising to highs of UK£22.96 and falling to the lows of UK£20.56. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Weir Group's current trading price of UK£22.04 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Weir Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Weir Group What Is Weir Group Worth? According to our valuation model, Weir Group seems to be fairly priced at around 2.72% above our intrinsic value, which means if you buy Weir Group today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is £21.46, then there isn’t really any room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because Weir Group’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity. What does the future of Weir Group look like?LSE:WEIR Earnings and Revenue Growth December 22nd 2024 Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 52% over the next couple of years, the future seems bright for Weir Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation. What This Means For You Are you a shareholder? It seems like the market has already priced in WEIR’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value? Are you a potential investor? If you’ve been keeping an eye on WEIR, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop. Story Continues It can be quite valuable to consider what analysts expect for Weir Group from their most recent forecasts. Luckily, you can check out what analysts are forecasting by clicking here. If you are no longer interested in Weir Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
||
| 25.11.24 08:17:31 | Weir Group (LON:WEIR) Is Looking To Continue Growing Its Returns On Capital | |
| If you're looking for a multi-bagger, there's a few things to keep an eye out for. Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding base of capital employed. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. So when we looked at Weir Group (LON:WEIR) and its trend of ROCE, we really liked what we saw. Return On Capital Employed (ROCE): What Is It? For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. Analysts use this formula to calculate it for Weir Group: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.12 = UK£361m ÷ (UK£3.9b - UK£902m) (Based on the trailing twelve months to June 2024). Therefore, Weir Group has an ROCE of 12%. In absolute terms, that's a pretty normal return, and it's somewhat close to the Machinery industry average of 13%. See our latest analysis for Weir Group LSE:WEIR Return on Capital Employed November 25th 2024 Above you can see how the current ROCE for Weir Group compares to its prior returns on capital, but there's only so much you can tell from the past. If you're interested, you can view the analysts predictions in our freeanalyst report for Weir Group . What Can We Tell From Weir Group's ROCE Trend? Weir Group has not disappointed in regards to ROCE growth. We found that the returns on capital employed over the last five years have risen by 68%. That's not bad because this tells for every dollar invested (capital employed), the company is increasing the amount earned from that dollar. Speaking of capital employed, the company is actually utilizing 24% less than it was five years ago, which can be indicative of a business that's improving its efficiency. A business that's shrinking its asset base like this isn't usually typical of a soon to be multi-bagger company. The Bottom Line On Weir Group's ROCE From what we've seen above, Weir Group has managed to increase it's returns on capital all the while reducing it's capital base. Since the stock has returned a solid 67% to shareholders over the last five years, it's fair to say investors are beginning to recognize these changes. In light of that, we think it's worth looking further into this stock because if Weir Group can keep these trends up, it could have a bright future ahead. While Weir Group looks impressive, no company is worth an infinite price. The intrinsic value infographic for WEIR helps visualize whether it is currently trading for a fair price. Story Continues While Weir Group may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this freelist here. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
||
| 05.11.24 00:52:44 | Weir Group (LSE:WEIR) Secures Major Contracts in Morocco and Pakistan, Driving Future Growth | |
| Weir Group (LSE:WEIR) has recently secured significant contracts, including a £25 million deal with OCP Group in Morocco and a £53 million agreement with Barrick Gold Corporation, emphasizing its strategic focus on sustainable, energy-efficient solutions. These developments highlight Weir's commitment to expanding its market presence and leveraging emerging trends, despite facing challenges such as a decreased net profit margin and market volatility. Readers can expect an in-depth discussion on Weir's competitive advantages, growth potential, and strategies to navigate current financial and market challenges. Dive into the specifics of Weir Group here with our thorough analysis report.LSE:WEIR Earnings and Revenue Growth as at Nov 2024 Competitive Advantages That Elevate Weir Group Weir Group's earnings forecast of 19.4% annual growth surpasses the UK market average, highlighting its strategic positioning. The company's focus on diverse product offerings, particularly in aftermarket services, has driven significant revenue increases. CEO Jon Stanton emphasized the importance of product line diversity in capturing market share. Furthermore, Weir's operational efficiency is reflected in its margin expansion, with CFO Brian Puffer noting the positive impact of strategic pricing. The company's strong customer relationships have been instrumental in sustaining growth, particularly in challenging conditions. To gain deeper insights into Weir Group's historical performance, explore our detailed analysis of past performance. Critical Issues Affecting the Performance of Weir Group and Areas for Growth Weir faces challenges such as a decreased net profit margin, now at 8.7%, and a Return on Equity of 12.7%, which is below the desired threshold. These factors, coupled with a 10.5% earnings decline over the past year, suggest areas for improvement. The volatility in dividend payments over the past decade also raises concerns about financial stability. However, Weir's current trading position, 27.1% below its estimated fair value, suggests potential for price appreciation, indicating room for financial performance enhancement. Learn about Weir Group's dividend strategy and how it impacts shareholder returns and financial stability. Emerging Markets Or Trends for Weir Group Weir's recent £25 million contract with OCP Group in Morocco and a £53 million deal with Barrick Gold Corporation for the Reko Diq project underscore its strategic alliances and product-related announcements. These contracts, focusing on sustainable solutions, not only enhance Weir's market position but also capitalize on the growing demand for energy-efficient technologies. Such strategic moves are poised to bolster Weir's presence in emerging markets, providing a platform for future growth. Story Continues See what the latest analyst reports say about Weir Group's future prospects and potential market movements. Market Volatility Affecting Weir Group's Position Weir's valuation, with a P/E ratio of 24x, is considered high compared to peers, posing a threat to investor confidence. Additionally, economic headwinds and supply chain vulnerabilities present risks to Weir's growth trajectory. The company's awareness of regulatory changes and proactive risk management strategies are crucial in navigating these challenges, ensuring long-term stability and market competitiveness. To dive deeper into how Weir Group's valuation metrics are shaping its market position, check out our detailed analysis of Weir Group's Valuation. Conclusion Weir Group's strategic focus on diverse product offerings and operational efficiency has positioned it for a substantial 19.4% annual growth, surpassing the UK market average. However, challenges such as a decreased net profit margin and return on equity, along with past earnings declines, highlight areas for improvement. The company's recent strategic contracts in emerging markets underscore its potential for future growth, particularly with the increasing demand for sustainable solutions. Despite being perceived as expensive with a P/E ratio of 24x compared to peers, Weir is trading 27.1% below its estimated fair value, suggesting a strong opportunity for price appreciation. This potential, combined with proactive risk management and strategic alliances, indicates a promising outlook for Weir's long-term stability and competitive edge. Summing It All Up Shareholder in Weir Group? Ensure you're never caught off-guard by adding your portfolio in Simply Wall St for timely alerts on significant stock developments. Simply Wall St is your key to unlocking global market trends, a free user-friendly app for forward-thinking investors. Curious About Other Options? Explore high-performing small cap companies that haven't yet garnered significant analyst attention. Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management. Find companies with promising cash flow potential yet trading below their fair value. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. View Comments |
||
| 31.10.24 14:20:13 | Investors in Weir Group (LON:WEIR) have seen decent returns of 55% over the past five years | |
| Generally speaking the aim of active stock picking is to find companies that provide returns that are superior to the market average. And in our experience, buying the right stocks can give your wealth a significant boost. To wit, the Weir Group share price has climbed 46% in five years, easily topping the market return of 0.01% (ignoring dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 26% in the last year, including dividends. With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies. Check out our latest analysis for Weir Group In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price. During five years of share price growth, Weir Group achieved compound earnings per share (EPS) growth of 27% per year. This EPS growth is higher than the 8% average annual increase in the share price. So one could conclude that the broader market has become more cautious towards the stock. The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).LSE:WEIR Earnings Per Share Growth October 31st 2024 Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here. What About Dividends? As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Weir Group the TSR over the last 5 years was 55%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence! A Different Perspective It's good to see that Weir Group has rewarded shareholders with a total shareholder return of 26% in the last twelve months. Of course, that includes the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 9% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling. Story Continues But note: Weir Group may not be the best stock to buy. So take a peek at this freelist of interesting companies with past earnings growth (and further growth forecast). Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on British exchanges. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
||
