February 22, 2024
Top 10 Stock Tate & Lyle Buy 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: Tate & Lyle – Top 10 Stock in SDG 2: Zero Hunger
Tate & Lyle is listed as a top 10 stock on February 22, 2024 in the market index SDG 2 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is safely financed and the professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 61 (high 61% performer), Obermatt assesses an overall buy recommendation for Tate & Lyle on February 22, 2024.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Packaged Foods & Meats |
| Index | FTSE All Shares, FTSE 250, FTSE 350, Low Emissions, Diversity Europe, SDG 12, SDG 13, SDG 2, SDG 3, SDG 5 |
| Size class | 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 Tate & Lyle Buy
| 360 METRICS | February 22, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 49 |
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| GROWTH | ||||||||
| GROWTH | 47 |
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| SAFETY | ||||||||
| SAFETY | 54 |
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| SENTIMENT | ||||||||
| SENTIMENT | 73 |
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| 360° VIEW | ||||||||
| 360° VIEW | 61 |
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ANALYSIS: With an Obermatt 360° View of 61 (better than 61% compared with alternatives), overall professional sentiment and financial characteristics for the stock Tate & Lyle are above average. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for Tate & Lyle. The consolidated Sentiment Rank has a good rank of 73, which means that professional investors are more optimistic about the stock than for 73% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 54 or better than 54% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 49, meaning that the share price of Tate & Lyle is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 47. ...read more
RECOMMENDATION: With a consolidated 360° View of 61, Tate & Lyle is better positioned than 61% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 73) and safe financing practices (Safety Rank of 54), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of Tate & Lylẹ is bright. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for Tate & Lyle positive
ANALYSIS: With an Obermatt Sentiment Rank of 73 (better than 73% compared with alternatives), overall professional sentiment and engagement for the stock Tate & Lyle is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and half above average for Tate & Lyle. Analyst Opinions are at a rank of 80 (better than 80% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. Market Pulse is also positive with a rank of 67, which means that the current professional news and professional social networks are positive when discussing this company (more positive news than for 67% of competitors). But Analyst Opinions Change is negative with a below 50 rank of 43, which means that stock research experts are changing their opinions for the worse in recommending the company. In other words, they are getting more critical of investments in Tate & Lyle. There are also only so many institutional investors holding company stock with a Professional Investors rank of 49, which means that, currently, professional investors hold less stock in this company than in 51% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 73 (more positive than 73% compared with investment alternatives), Tate & Lyle has a reputation among professional investors that is above-average compared with that of its competitors. The signals are ambivalent. The positive news in the market contradicts the negative change in analyst recommendations. Since the overall analyst recommendations are still above average, the stock may be safer for investing, especially if it is not an extra-large company where Pros tend to be less present. In such a case, the Pro Investor rank is not a problem. ...read more
Value Strategy: Tate & Lyle Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 49 (worse than 51% compared with alternatives), Tate & Lyle 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 Tate & Lyle. Price-to-Profit (also referred to as price-earnings, P/E) is 61 which means that the stock price compared with what market professionals expect for future profits is lower than for 61% of comparable companies, indicating a good value concerning Tate & Lyle'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 39, which means that the stock price is lower as regards to invested capital than for 39% of comparable investments. On the other hand, Price-to-Sales is less favorable than 82% of alternatives (only 18% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 38% 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 49, is a hold recommendation based on Tate & Lyle'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. ...read more
Growth Strategy: Tate & Lyle Growth Momentum low
| GROWTH METRICS | February 22, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 32 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 56 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 92 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 14 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 47 |
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ANALYSIS: With an Obermatt Growth Rank of 47 (better than 47% compared with alternatives), Tate & Lyle 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, where half of the indicators are below and half above average for Tate & Lyle. Profit Growth, with a rank of 56 (better than 56% of its competitors), and Capital Growth, with a rank of 92, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 32, which means that, currently, professionals expect the company to grow less than 68% of its competitors, and Stock Returns are at a rank of 14. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 47, is a hold recommendation for growth and momentum investors. Stock returns that are a thing of the past can be less of a problem. Below-average revenue growth may be caused by divestments of underperforming businesses. If that is the case, then the positive developments of profit and capital growth are signs of a company with growth potential. If these are the reasons, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Tate & Lyle Debt Financing Safety above-average
| SAFETY METRICS | February 22, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 41 |
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| REFINANCING | ||||||||
| REFINANCING | 73 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 52 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 54 |
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ANALYSIS: With an Obermatt Safety Rank of 54 (better than 54% compared with alternatives), the company Tate & Lyle has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Tate & Lyle 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 two out of three indicators above-average for Tate & Lyle. Refinancing is at 73, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 73% of its competitors. Liquidity is also good at 52, meaning the company generates more profit to service its debt than 52% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 41, which means the company has an above-average debt-to-equity ratio. It has more debt than 59% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 54 (better than 54% compared with alternatives), Tate & Lyle has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Tate & Lyle could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Tate & Lyle Below-Average Financial Performance
| COMBINED PERFORMANCE | February 22, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 49 |
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| GROWTH | ||||||||
| GROWTH | 47 |
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| SAFETY | ||||||||
| SAFETY | 52 |
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| COMBINED | ||||||||
| COMBINED | 39 |
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ANALYSIS: With an Obermatt Combined Rank of 39 (worse than 61% compared with investment alternatives), Tate & Lyle (Packaged Foods & Meats, United Kingdom) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Tate & Lyle 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 54), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 39, is a hold recommendation based on Tate & Lyle's financial characteristics. As the company Tate & Lyle'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 54) 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. ...read more
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