June 22, 2023
Top 10 Stock M&G Hold Recommendation
How to read the ranks
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.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: M&G – Top 10 Stock in Employee Health Leaders in Europe
M&G is listed as a top 10 stock on June 22, 2023 in the market index Employee Health EU because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 26 (26% performer), Obermatt assesses an overall hold recommendation for M&G on June 22, 2023.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Other Financial Services |
| Index | FTSE All Shares, FTSE 100, FTSE 350, Dividends Europe, Employee Focus EU, Employee Health EU, Diversity Europe |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View M&G Hold
| 360 METRICS | June 22, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 84 |
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| GROWTH | ||||||||
| GROWTH | 6 |
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| SAFETY | ||||||||
| SAFETY | 24 |
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| SENTIMENT | ||||||||
| SENTIMENT | 47 |
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| 360° VIEW | ||||||||
| 360° VIEW | 26 |
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ANALYSIS: With an Obermatt 360° View of 26 (better than 26% compared with alternatives), overall professional sentiment and financial characteristics for the stock M&G are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for M&G. Only the consolidated Value Rank has an attractive rank of 84, which means that the share price of M&G is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 84% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 6, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The consolidated Safety Rank has a riskier rank of 24, meaning the company has a riskier financing structure than 76% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 53% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 47. ...read more
RECOMMENDATION: With a 360° View of 26, M&G is worse than 74% of all alternative stock investment opportunities based on the Obermatt Method. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 84. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 6), a riskier financing structure than the competition (Safety Rank of 24), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 47) is negative. This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. We recommend evaluating whether the future of M&G is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of M&G. Only invest if you have solid reasons to believe that the low growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for M&G only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 47 (better than 47% compared with alternatives), overall professional sentiment and engagement for the stock M&G is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and above average for M&G. Analyst Opinions are at a rank of 22 (worse than 78% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 54 which means that stock research experts are changing their opinions for the better. In other words, they are getting more optimistic of stock investments in M&G. Market Pulse is also positive with a rank of 93, which means that the current professional news and professional social networks are positive in their discussions about this company (more positive news than for 93% of competitors). Only professional investors tend to be absent with a Professional Investors rank of 26, which means that professional investors hold less stock in this company than in 74% of alternative investment opportunities. Pros tend to invest in other companies. But that could also be due to the size of the company. Professional investors tend to invest in XL and XXL companies. If the company is smaller than that, that fact alone may explain why there are fewer pros present. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 47 (less encouraging than 53% compared with investment alternatives), M&G has a reputation among professional investors that is below that of its competitors. Since analysts are getting more optimistic and the professional communication channels are positive, it may be an indication of a company that has the difficult times behind it or the stocks’ value is improving. For medium to smaller companies, the positive sentiment indicators outshine the negative. ...read more
Value Strategy: M&G Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 84 (better than 84% compared with alternatives) for 2023, M&G shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for M&G. Price-to-Sales (P/S) is 97, which means that the stock price compared with what market professionals expect for future sales is lower than for 97% of comparable companies, indicating a good value concerning M&G's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 58% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 98 (dividends are expected to be higher than 98% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 56% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for M&G to 44. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 84, is a strong buy recommendation based on M&G's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner in assets than its competitors. For instance, the company could be leasing its production facilities or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the three good value ranks for Sales, Profits, and Dividends are reliable indicators for the stock price value. ...read more
Growth Strategy: M&G Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 6 (better than 6% compared with alternatives), M&G shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for M&G. Sales Growth has a below market rank of 23, which means that, currently, professionals expect the company to grow less than 77% of its competitors. The same is valid for Capital Growth, with a rank of 1, and Profit Growth, with a rank of 8. Currently, professionals expect the company to grow its profits less than 92% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 51, which means that the stock returns have recently been above 51% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 6, is a SELL recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for M&G, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: M&G Debt Financing Safety risky
| SAFETY METRICS | June 22, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 19 |
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| REFINANCING | ||||||||
| REFINANCING | 100 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 1 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 24 |
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ANALYSIS: With an Obermatt Safety Rank of 24 (better than 24% compared with alternatives), the company M&G has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of M&G is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for M&G and the other two below average. Refinancing is at 100, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 100% of its competitors. But Leverage is high with a rank of 19, meaning the company has an above-average debt-to-equity ratio. It has more debt than 81% of its competitors. Liquidity is also on the riskier side with a rank of 1, meaning the company generates less profit to service its debt than 99% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 24 (worse than 76% compared with alternatives), M&G has a financing structure that is significantly riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for M&G are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: M&G Lowest Financial Performance
| COMBINED PERFORMANCE | June 22, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 84 |
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| GROWTH | ||||||||
| GROWTH | 6 |
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| SAFETY | ||||||||
| SAFETY | 1 |
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| COMBINED | ||||||||
| COMBINED | 17 |
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ANALYSIS: With an Obermatt Combined Rank of 17 (worse than 83% compared with investment alternatives), M&G (Other Financial Services, United Kingdom) shares have lower financial characteristics compared with similar stocks. Shares of M&G are a good value (attractively priced) with a consolidated Obermatt Value Rank of 84 (better than 84% of alternatives) but show below-average growth (Growth Rank of 6), and are riskily financed (Safety Rank of 24), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 17, is a sell recommendation based on M&G's financial characteristics. As the company M&G's key financial metrics exhibit good value (Obermatt Value Rank of 84) but low growth (Obermatt Growth Rank of 6) and risky financing practices (Obermatt Safety Rank of 24), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 84% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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