Daily stock chart
Company Vitals
Returns summary
Leverage coverage and liquidity
Stock chart
The daily stock chart for the Bupa shows that there was a significant increase in stock prices during the year. At the beginning of the year, the price was about SAR40. However, as the year progressed, the share prices also increased. The highest value during the year was more than SAR190 (Saudi Stock Market 1).
The increase shows that the value of the firm rose significantly during the year. This result is a positive sign on the overall management and performance of the company.
Company profile and analysis
Bupa Arabia for corporate insurance was formed on 2008/05/01. The company is publicly listed. The headquarters of the company is located in Jeddah, Saudi Arabia. Further, it is linked to the Bupa Group. The operations of the Bupa Group cut across 190 countries across the globe. Besides, the group has more than 20 million customers all over the world (Saudi Stock Market 1).
It carries out cooperative insurance operations. It focuses on health care and medical. The company also carried out other related activities such as representation and reinsurance. Examples of products offered by the company are Bupa Business, Bupa for Individuals, Bupa for Saudi Families, and Bupa Corporate among others (Saudi Stock Market 1).
The financial year of Bupa Arabia ends on 31st December and the external auditors are Deloitte & Touché and PricewaterhouseCoopers (Saudi Stock Market 1).
The board of directors is made up of nine members. Four members are non-executive, three are independent, and two are executive members (Saudi Stock Market 1).
The stock of Bupa Arabia trades heavily on the Saudi Stock Market. The total volume of shares traded on 10th December 2014 was 95,294 while the total turnover was 15,966,008.25. The opening share price for that day was 170.75. The highest share price was SAR171.50 while the lowest value was SAR165.00. The average trade size for the same day was 178. The market capitalization of Bupa Arabia is SAR6,587,691,250.
The highest share price during the past 52 weeks was SAR194.00 while the lowest was 39.80. The range during the year was quite high. This could be an indication of a company with robust growth.
The company has paid dividend twice since it was formed. In 2013, the board of directors declared a dividend of SAR1 per share while in 2014, SAR0.5 was paid. Payment of dividend contributed to an increase in the shareholder’s fund and the overall value of the firm. The dividend yield for the year 2013 was 0.5937%, while the forwards dividend payout ratio is 26.95%. This shows that shareholders will expect the company to distribute more than 20% of the net earnings in the future.
The price/earnings on estimated normal diluted earnings per share is 45.39. The high value shows that the shareholders expected the earnings of the company to significantly go up in the future. It is an indication of good performance in the future.
The estimated normal EBITDA for 2013 was high. The value was SAR145,186. The ratio is suitable for evaluating the operating efficiency and profitability of a company. A positive value is preferred. The EV/estimated normal EBITDA was high. It shows that the company has a high value.
Finally, it is expected that the revenue and earnings per share will grow by a positive value in the coming years. Therefore, the current and expected future performance of the company is outstanding.
The summary of return gives information on the profitability of the company. The return on equity was high while the return on equity was low. The ratios show that the company is in a position to generate positive revenue and profit. The return on invested capital with or without goodwill were high.
structure. This means that it is wholly financed by equity. Therefore, the company does not face risks that are associated with debt such as solvency.
The current ratio was 1.81 while the quick ratio is 1.62. This implies that the company can pay current obligations with ease. It can be an indication that Bupa Arabia has an effective working capital and liquidity management.
The discounted cash flow valuation (DCF) method shows that the intrinsic value of the firm is SAR15.11 while the current market price of the shares is SAR168.42. This shows that the shares are undervalued by a large margin. It is advisable for an investor to sell the shares now because the prices are expected to fall in the future and this may result in losses or lower profit margin. However, since investors expect the company to perform well in the future, an investor may hold the shares because they may fetch higher returns in the future than now.
The risk level of the Bupa Arabia is considered to be medium. Besides, the financial statements show that the company has an excellent ability to generate positive cash flow despite investments being made on a yearly basis.
Finally, the trading of the shares of the company is considered to be bullish because the stock prices are currently rising and investors also expect the trend to continue in the future.
Bupa Arabia reported a growth in total revenue between 2010 and 2013. The total percentage increase over the period was 62.44%. The increase can be attributed to the constantly growing market for the company’s products.
The operating income increased by a total over 78.98% over the period. The growth is an indication of efficiency in managing the cost of operation and revenue. Also, the company had a positive net income margin throughout the period. There was a decline in 2011. This can be explained by massive investment made by the company. The percentage change over the period was 108.10%.
With the growth of income, the earnings per share also increased from SAR1.06 in 2010 to SAR3.71 in 2013. The total change is equivalent to 250%. The increase shows that the overall value of the firm and the shareholders’ fund rose.
The company had a high positive value of cash flow generated from operations. Further, there were capital expenditure incurred by the company over the period. The values of free cash flow were positive between 2011 and 2013. This means that during these years, the company had available cash that can be invested in upcoming activities.
The growth of total assets amounted to 66.16%. The increase in the values shows that the company reported growth in performance and overall financial standing between 2010 and 2013.
Investment considerations
Business quality
Financial summary
- Calculations
- Discounted free cash flow model
- Present value of cash flow
- Weighted average cost of capital = 11.2%
- Dividend per share = SAR1
- The estimated growth rate is 4.298%
- = 1 (1.04298) / (0.112 – 0.04298)
- = SAR15.11
Works Cited
Bupa Arabia for Cooperative Insurance Company. Financial statements and independent Joint Auditor’s Report 31 December 2013. 2014. PDF. Web.
Saudi Stock Market. 8210 – Bupa Arabia for Cooperative Insurance. 2014. Web.