Fact based stock research
Kumba Iron Ore (JSE:KIO)

ZAE000085346

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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Kumba Iron Ore stock research in summary

angloamericankumba.com

ANALYSIS: With an Obermatt Combined Rank of 57 (better than 57% compared with investment alternatives), Kumba Iron Ore (Steel, South Africa) shares have above-average financial characteristics compared with similar stocks. Shares of Kumba Iron Ore are low in value (priced high) with a consolidated Value Rank of 27 (worse than 73% of alternatives). But they show above-average growth (Growth Rank of 59) and are safely financed (Safety Rank of 77, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 57, is a buy recommendation based on Kumba Iron Ore's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Kumba Iron Ore exhibits low value (Obermatt Value Rank of 27), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 59). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 77) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	n/a
Growth Rank	n/a
Safety Rank	n/a
Combined Rank	n/a

Country	South Africa
Industry	Steel
Index	Energy Efficient, Good Governace Growth Markets, Human Rights, Independent Boards Growth Markets, Water Efficiency, JSE All Shares
Size class	X-Large

This stock has achievements: Top 10 Stock.

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Research History: Kumba Iron Ore

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	91	27	28	n/a
GROWTH
GROWTH	19	3	71	n/a
SAFETY
SAFETY	98	99	71	n/a
SENTIMENT
SENTIMENT	n/a	52	82	^new
360° VIEW
360° VIEW	n/a	41	80	^new

Most recent update of the stock research: . Financial reporting date used for calculating ranks: . Stock research history is based on the Obermatt Method. The higher the rank, the better Kumba Iron Ore is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	91	27	28	n/a
GROWTH
GROWTH	19	3	71	n/a
SAFETY
SAFETY	98	99	71	n/a
COMBINED
COMBINED	100	29	64	n/a

Last update of combined financial performance: . Stock analysis on combined financial performance: The higher the rank of Kumba Iron Ore the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 27 (worse than 73% compared with alternatives), Kumba Iron Ore shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Kumba Iron Ore. Price-to-Profit (also referred to as price-earnings, P/E) is 56 which means that the stock price compared with what market professionals expect for future profits is lower than for 56% of comparable companies, indicating a good value concerning Kumba Iron Ore's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 17, which means that the stock price is lower as regards to invested capital than for 17% of comparable investments. On the other hand, Price-to-Sales is less favorable than 75% of alternatives (only 25% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 8% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 27, is a hold recommendation based on Kumba Iron Ore's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	71	33	26	n/a
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	94	47	57	n/a
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	40	20	16	n/a
DIVIDEND YIELD
DIVIDEND YIELD	100	90	90	n/a
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	91	27	28	n/a

Last update of Value Rank: . Stock analysis on value ratios: The higher the rank, the lower the value ratio of Kumba Iron Ore; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 59 (better than 59% compared with alternatives), Kumba Iron Ore shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Kumba Iron Ore. Profit Growth has a rank of 75, which means that currently professionals expect the company to grow its profits more than 75% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 77 (above 77% of alternative investments). But Sales Growth has a below the median rank of 28, which means that, currently, professionals expect the company to grow less than 72% of its competitors, and Capital Growth also has a lower rank of 24. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 59, is a buy recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Kumba Iron Ore. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	24	1	29	n/a
PROFIT GROWTH
PROFIT GROWTH	88	48	77	n/a
CAPITAL GROWTH
CAPITAL GROWTH	n/a	32	47	n/a
STOCK RETURNS
STOCK RETURNS	10	17	77	n/a
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	19	3	71	n/a

Last update of Growth Rank: . Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Kumba Iron Ore.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 77 (better than 77% compared with alternatives) for 2025, the company Kumba Iron Ore has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Kumba Iron Ore is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for Kumba Iron Ore. Leverage is at 76, meaning the company has a below-average debt-to-equity ratio. It has less debt than 76% of its competitors. Refinancing is at a rank of 55, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 55% of its competitors. Finally, Liquidity is also good at a rank of 81, which means that the company generates more profit to service its debt than 81% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 77 (better than 77% compared with alternatives), Kumba Iron Ore has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. Investors may not have a debt issue with Kumba Iron Ore but they should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	98	100	74	n/a
REFINANCING
REFINANCING	56	75	49	n/a
LIQUIDITY
LIQUIDITY	89	96	78	n/a
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	98	99	71	n/a

Last update of Safety Rank: . Stock analysis on safety metrics: The higher the rank, the lower the leverage of Kumba Iron Ore and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	5	9	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	88	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	71	96	^new
MARKET PULSE
MARKET PULSE	n/a	59	57	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	52	82	^new

Last update of Sentiment Rank: . Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Kumba Iron Ore.
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