Fact based stock research
Santam (JSE:SNT)

ZAE000093779

How to read the free 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.

Santam stock research in summary

santam.co.za

ANALYSIS: With an Obermatt Combined Rank of 90 (better than 90% compared with investment alternatives), Santam (Property & Casualty Insurance, South Africa) shares have much better financial characteristics than comparable stocks. Shares of Santam are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives) and show below-average growth (Growth Rank of 47) but are safely financed (Safety Rank of 81), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 90, is a strong buy recommendation based on Santam's financial characteristics. As the company Santam's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 49) and low growth (Obermatt Growth Rank of 47), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 81) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. 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	49
Growth Rank	47
Safety Rank	81
Combined Rank	90

Country	South Africa
Industry	Property & Casualty Insurance
Index	Good Governace Growth Markets, JSE All Shares
Size class	Large

This stock has achievements: Top 10 Stock.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Santam

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	10	79	55	49
GROWTH
GROWTH	25	29	37	47
SAFETY
SAFETY	61	81	81	81
SENTIMENT
SENTIMENT	n/a	72	70	^new
360° VIEW
360° VIEW	n/a	85	59	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Santam is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	10	79	55	49
GROWTH
GROWTH	25	29	37	47
SAFETY
SAFETY	61	81	81	81
COMBINED
COMBINED	18	90	90	90

Last update of combined financial performance: 6-Oct-2022. Stock analysis on combined financial performance: The higher the rank of Santam the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 49 (worse than 51% compared with alternatives), Santam shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Santam. Price-to-Sales (P/S) is 79, which means that the stock price compared with what market professionals expect for future sales is lower than for 79% of comparable companies, indicating a good value concerning Santam's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 61, which means that dividends are expected to be higher than for 61% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 81% of alternatives (only 19% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than for 60% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a hold recommendation based on Santam's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. 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)	44	84	85	79
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	31	58	50	40
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	14	31	20	19
DIVIDEND YIELD
DIVIDEND YIELD	56	96	70	61
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	10	79	55	49

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Santam; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 47 (better than 47% compared with alternatives), Santam shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Santam. Profit Growth has a rank of 83, which means that currently professionals expect the company to grow its profits more than 83% 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 44, which means that, currently, professionals expect the company to grow less than 56% of its competitors, and Capital Growth also has a lower rank of 3. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 47, is a hold 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 Santam. 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	21	19	33	44
PROFIT GROWTH
PROFIT GROWTH	18	79	43	83
CAPITAL GROWTH
CAPITAL GROWTH	n/a	9	19	3
STOCK RETURNS
STOCK RETURNS	44	33	67	77
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	25	29	37	47

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Santam.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 81 (better than 81% compared with alternatives) for 2022, the company Santam has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Santam 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, with just one indicator above average for Santam. Liquidity is at 67, meaning the company generates more profit to service its debt than 67% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 6, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 94% of its competitors. Leverage is also high at a rank of 47, which means that the company has an above-average debt-to-equity ratio. It has more debt than 53% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 81 (better than 81% compared with alternatives), Santam has a financing structure that is significantly safer than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	76	53	65	47
REFINANCING
REFINANCING	14	6	6	6
LIQUIDITY
LIQUIDITY	83	78	82	67
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	61	81	81	81

Last update of Safety Rank: 6-Oct-2022. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Santam 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	95	36	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	4	84	^new
MARKET PULSE
MARKET PULSE	n/a	66	57	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	72	70	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Santam.
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