Invesco Ltd (IVZ) Extended Graph Analysis
June 17th, 2020 Posted by criseldar Extended Analysis No Comment yetCompany Profile
Investco Ltd (NYSE:IVZ) is an investment management firm helping investors around the globe in achieving their goal profitably. They specialized in managing investment portfolios of $1.142 billion in assets on behalf of their clients worldwide. They have 8,000 employees in 25 countries which focus on their investment styles.
Invesco Ltd (IVZ) Extended Graph Analysis
1. IVZ CASH FLOW
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |
Net cash flow provided by operating activitIes | 1,053,500,000 | 129,300,000 | 1,370,700,000 | 828,800,000 | 1,116,600,000 | 1,160,000,000 |
Net cash used for investing activities | -664,800,000 | -990,600,000 | -961,100,000 | -2,898,700,000 | -1,425,400,000 | -1,544,000,000 |
Net cash provided by (used for) financing activities | 23,300,000 | 470,100,000 | 169,000,000 | 1,540,000,000 | 201,300,000,000 | 384,600,000 |
Capital expenditure | -124,500,000 | -147,700,000 | -111,700,000 | -102,500,000 | -124,300,000 | -122,400,000 |
Free cash flow | 929,000,000 | -18,400,000 | 1,259,000,000 | 726,300,000 | 992,300,000 | 1,037,600,000 |
Working Capital | 1,921,000,000 | 1,462,000,000 | 1,872,000,000 | 967,000,000 | -10,463,000,000 | -10,463,000,000 |
Facts:
- Net cash flow provided by operating activities was $1.16 billion in 2020 trailing twelve months.
- Net cash used for investing activities was S-1.54 billion in 2020 trailing twelve months.
- Net cash provided by (used for) financing activities was $385 million in 2020 trailing twelve months.
- Capital expenditure was $-122 million in 2020 trailing twelve months.
- Free cash flow was $1 billion in the 2020 trailing twelve months.
- Working capital was $-10.46 billion in 2020 trailing twelve months.
Explanation
- Cash from operating activities was erratic in movement in the last five years due to unstable net income.
- Cash used for investing activities were investment in property, plant and equipment and a significant amount on purchases of investment.
- Cash provided by (used for) financing activities was debt issued.
- Capital expenditure was investment in property, plant and equipment.
- Free cash flow was erratic in movement in the last five years, however it grew 12 percent in five years.
- Working capital was unstable and it suffered a negative amount in 2019, hence current liabilities are greater than that the current assets in significant amounts. However, the company managed to have a positive working capital from 2010 to 2018.
Interpretation
The company was efficient in providing cash from operating activities in the last five years. There was free cash flow, however the company suffered negative working capital due to its current assets being lesser than the current liabilities.
2. IVZ BALANCE SHEET
2015 | 2016 | 2017 | 2018 | 2019 | |
Total cash | 2,533,800,000 | 2,070,200,000 | 2,517,700,000 | 1,805,400,000 | 1,701,200,000 |
Current Assets | 9,974,400,000 | 11,734,600,000 | 16,634,400,000 | 14,223,400,000 | 3,036,400,000 |
Net property, plant and equipment | 426,900,000 | 464,700,000 | 490,700,000 | 468,700,000 | 583,500,000 |
Total non-current assets | 15,098,800,000 | 13,999,700,000 | 15,034,400,000 | 16,755,000,000 | 36,383,900,000 |
Total assets | 25,073,200,000 | 25,734,300,000 | 31,668,800,000 | 30,978,400,000 | 39,420,300,000 |
Current liabilities | 8,053,900,000 | 10,272,000,000 | 14,762,700,000 | 13,256,300,000 | 13,499,500,000 |
Non-current liabilities | 9,134,000,000 | 7,958,500,000 | 8,210,000,000 | 9,143,300,000 | 12,058,300,000 |
Total liabilities | 17,187,900,000 | 18,230,500,000 | 22,972,700,000 | 22,399,600,000 | 25,557,800,000 |
Retained earnings | 4,439,600,000 | 4,833,400,000 | 5,489,100,000 | 5,884,500,000 | 5,917,800,000 |
Stockholders equity | 7,885,300,000 | 7,503,800,000 | 8,696,100,000 | 8,578,800,000 | 13,862,500,000 |
Total Liabilities and Stockholders Equity | 25,073,200,000 | 25,734,300,000 | 31,668,800,000 | 30,978,400,000 | 39,420,300,000 |
Facts:
- Total cash was $1.7 billion in 2019.
- Current assets were $3 billion in 2019.
- Net property, plant and equipment was $564 million in 2019.
- Non-current assets were $36 billion in 2019.
- Total assets were $39 billion in 2019.
- Current liabilities were $13 billion in 2019.
- Non-current liabilities were $12 billion in 2019.
- Total liabilities were $26 billion in 2019.
- Retained earnings were $5.9 billion in 2019.
- Stockholders’ equity was $13.86 billion in 2019.
Explanation
- Total cash was erratic in movement in the last five years and has a negative growth of 33 percent in five years.
- Current assets were erratic in movement in the last five years and have a negative growth of 70 percent in five years.
- Net property, plant and equipment grew 37 percent in five years.
- Non-current assets grew 141 percent in five years.
- Total assets grew 57 percent in five years.
- Current liabilities represent 53 percent of the total liabilities.
- Non-current liabilities represent 47 percent of total liabilities.
- Total liabilities represent 65 percent of total liabilities and equity.
- Retained earnings represents 44 percent of equity.
- Stockholders equity represents 35 percent of total liabilities and equity and it grew 76 percent in five years.
Interpretation
IVZ is not liquid and its liabilities are two-thirds against the total equity in 2019. The stockholders equity was increasing year-over-year in five years.. The company is using more of creditors money than the shareholders investment in operating the business.
3. IVZ INCOME AND MARKET
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |
Revenue | 5,122,900,000 | 4,734,400,000 | 5,160,300,000 | 5,314,100,000 | 6,117,400,000 | 6,501,700,000 |
EBIT | 1,358,400,000 | 1,176,400,000 | 1,277,100,000 | 1,341,200,000 | 1,481,200,000 | 1,627,400,000 |
Net Income | 968,100,000 | 854,200,000 | 1,127,300,000 | 882,800,000 | 688,300,000 | 651,300,000 |
EBITDA | 1,726,300,000 | 1,401,200,000 | 1,640,800,000 | 1,391,700,000 | 1,286,200,000 | 1,222,100,000 |
Market Capitalization | 13,978,000,000 | 12,395,000,000 | 14,875,000,000 | 6,647,000,000 | 8,150,000,000 | 3,956,000,000 |
Intrinsic Value | 22,276,000,000 | 22,107,000,000 | 47,930,000,000 | 22,344,000,000 | 27,936,000,000 | 14,502,000,000 |
Facts:
- Revenue was $6.5 billion in 2020 trailing twelve months.
- EBIT was $1.6 billion in 2020 trailing twelve months.
- Net income was $651 million in 2020 trailing twelve months.
- EBITDA was $1.22 billion in 2020 trailing twelve months.
- Market capitalization was $3.956 billion in 2020 trailing twelve months.
- Intrinsic value was $14.5 billion in 2020 trailing twelve months.
Explanation
- Revenue is increasing year-over-year and it grew 27 percent in five years.
- EBIT represents 25 percent of the revenue.
- Net income represents 10 percent of the revenue.
- EBITDA represents 19 percent of the revenue generated.
- Market capitalization was lower than the calculated intrinsic value.
- Intrinsic value was higher than market capitalization by 267 percent.
Interpretation
The company is capable of producing enough revenue for its business operations. The net income was acceptable and has not suffered negative in the last five years.
4. IVZ FINANCIAL RATIOS
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |
Asset turnover (average) | 0.23 | 0.19 | 0.18 | 0.17 | 0.17 | 0.19 |
Return on assets % | 4.14 | 3.26 | 3.81 | 2.73 | 1.6 | 1.35 |
Return on equity % | 11.64 | 10.78 | 13.5 | 9.91 | 6.13 | 5.16 |
Return on invested capital % | 6.22 | 6.04 | 7.84 | 5.83 | 3.72 | 3.17 |
Debt/Equity | 0.95 | 0.86 | 0.79 | 0.89 | 0.88 | 0.92 |
Facts:
- Asset turnover was averaging 0.19 in 2020 trailing twelve months.
- Return on assets was 1.35 percent in 2020 trailing twelve months.
- Return on equity was 5.16 percent in 2020 trailing twelve months.
- Return on invested capital was 3.17 percent in 2020 trailing twelve months.
- Debt/Equity ratio was 0.92 in 2020 trailing twelve months.
Explanation
- Asset turnover indicate that for every $1 in asset it generated $0.19
- The return on assets indicate that the company can earn a return of $.0135 net income.
- Return on equity indicates that for every dollar invested in equity the company generated 317 cents of net income.
- Return on invested capital indicates that the company makes $0.317 return on its invested capital.
- Debt/Equity ratio indicates that for every dollar in equity, the company has 92 cents in leverage.
Interpretation
The company managed to produce returns on the investments made in assets and capital. Debt was high against equity.
5. IVZ KEY EXECUTIVE COMPENSATION
2015 | 2016 | 2017 | 2018 | 2019 | |
Key Executive Compensation | |||||
Salary | 2,201,884 | 2,183,408 | 3,091,877 | 3,090,422 | 3,079,436 |
Bonus | 0 | 0 | 0 | 0 | 0 |
Annual Other income | 0 | 0 | 0 | 0 | 0 |
Restricted Stock Award | 20,192,299 | 19,241,890 | 22,282,447 | 22,542,672 | 21,984,802 |
Securities Options | 0 | 0 | 0 | 0 | 0 |
LTIP Payout | 0 | 0 | 0 | 0 | 0 |
Non-equity Compensation | 9,805,000 | 8,547,100 | 12,340,261 | 11,042,255 | 11,395,090 |
Other Compensation | 266,218 | 241,109 | 305,860 | 306,709 | 345,970 |
Total | 32,465,401 | 30,213,507 | 38,020,455 | 36,982,058 | 36,805,298 |
Martin L. Flanagan/ President and CEO
|
|||||
Salary | 790,000 | 790,000 | 790,000 | 790,000 | 790,000 |
Bonus | 0 | 0 | 0 | 0 | 0 |
Annual Other income | 0 | 0 | 0 | 0 | 0 |
Restricted Stock Award | 10,284,957 | 9,644,970 | 8,622,702 | 8,714,798 | 6,909,962 |
Securities Options | 0 | 0 | 0 | 0 | 0 |
LTIP Payout | 0 | 0 | 0 | 0 | 0 |
Non-equity Compensation | 4,650,000 | 4,045,500 | 4,268,003 | 3,300,000 | 3,704,000 |
Other Compensation | 151,018 | 126,585 | 124,490 | 116,901 | 114,987 |
Total | 15,875,975 | 14,607,055 | 13,805,195 | 12,921,699 | 11,518,949 |
Loren M. Starr/Senior Managing Director and Head of the Americas
|
|||||
Salary | 450,000 | 450,000 | 450,000 | 450,000 | 450,000 |
Bonus | 0 | 0 | 0 | 0 | 0 |
Annual Other income | 0 | 0 | 0 | 0 | 0 |
Restricted Stock Award | 2,414,991 | 2,293,987 | 2,050,470 | 2,072,928 | 2,037,854 |
Securities Options | 0 | 0 | 0 | 0 | 0 |
LTIP Payout | 0 | 0 | 0 | 0 | 0 |
Non-equity Compensation | 1,080,000 | 939,600 | 991,278 | 911,976 | 912,000 |
Other Compensation | 27,816 | 28,374 | 29,709 | 30,830 | 31,934 |
Total | 3,972,807 | 3,711,961 | 3,521,457 | 3,465,734 | 3,431,788 |
Philip A. Taylor/Vice Chairman | |||||
Salary | 499,283 | 481,346 | 491,458 | 492,444 | 481,366 |
Bonus | 0 | 0 | 0 | 0 | 0 |
Annual Other income | 0 | 0 | 0 | 0 | 0 |
Restricted Stock Award | 4,709,413 | 4,519,953 | 4,034,918 | 433,222 | 4,283,471 |
Securities Options | 0 | 0 | 0 | 0 | 0 |
LTIP Payout | 0 | 0 | 0 | 0 | 0 |
Non-equity Compensation | 2,600,000 | 2,262,000 | 2,352,480 | 2,234,856 | 1,459,090 |
Other Compensation | 19,530 | 17,494 | 16,579 | 18,617 | 147,097 |
Total | 7,828,226 | 7,280,793 | 6,895,435 | 7,079,139 | 6,241,024 |
Andrew R. Schlossberg/Senior Managing Director and Head of the Americas
|
|||||
Salary | 450,000 | 450,000 | 450,000 | ||
Bonus | 0 | 0 | 0 | ||
Annual Other income | 0 | 0 | 0 | ||
Restricted Stock Award | 1,749,922 | 2,159,940 | 3,274,988 | ||
Securities Options | 0 | 0 | 0 | ||
LTIP Payout | 0 | 0 | 0 | ||
Non-equity Compensation | 1,440,000 | 1,457,600 | 1,820,000 | ||
Other Compensation | 41,210 | 47,442 | 87,966 | ||
Total | 3,681,132 | 4,114,982 | 5,632,954 | ||
Gregory G. Mcgreeve/Senior Managing Director
|
|||||
Salary | 450,000 | 450,000 | 450,000 | ||
Bonus | 0 | 0 | 0 | ||
Annual Other income | 0 | 0 | 0 | ||
Restricted Stock Award | 3,274,988 | 2,632,942 | 2,749,364 | ||
Securities Options | 0 | 0 | 0 | ||
LTIP Payout | 0 | 0 | 0 | ||
Non-equity Compensation | 1,917,000 | 1,800,610 | 2,100,000 | ||
Other Compensation | 27,861 | 29,349 | 30,309 | ||
Total | 5,669,849 | 4,912,901 | 5,329,673 | ||
Andrew Tak Shing Lo/Senior Managing Director and Head of Invesco Asia Pacific
|
|||||
Salary | 462,601 | 462,062 | 460,419 | 457,978 | 458,070 |
Bonus | 0 | 0 | 0 | 0 | 0 |
Annual Other income | 0 | 0 | 0 | 0 | 0 |
Restricted Stock Award | 2,782,938 | 2,782,980 | 2,549,447 | 2,628,842 | 2,729,163 |
Securities Options | 0 | 0 | 0 | 0 | 0 |
LTIP Payout | 0 | 0 | 0 | 0 | 0 |
Non-equity Compensation | 1,475,000 | 1,300,000 | 1,371,500 | 1,337,213 | 1,400,000 |
Other Compensation | 67,854 | 68,656 | 66,011 | 63,570 | 63,677 |
Total | 4,788,393 | 4,613,698 | 4,447,377 | 4,487,603 | 4,650,910 |
Facts
- Total key executive compensation in 2015 was $32.465 million.
- Key executive compensation in 2016 was $30.214 million.
- Key executive compensation in 2017 was $38.020 million.
- The executive compensation in 2018 was $36.982 million.
- The executive compensation in 2019 was $36.805 million.
Explanation
- The total key executive compensation represents 5.35 percent of the net income in 2019.
- The total compensation of the CEO represents 31 percent of the total key executive compensation in 2019.
- Total compensation of Loren M. Starr, Senior Managing Director and Head of the Americas represents 9.32 percent of the total key executive compensation in 2019.
- Total compensation of Philip A. Taylor, Vice Chairman represents 17 percent of the total key executive compensation in 2019.
- Compensation of Andrew R. Scholssberg, Senior Managing Director and Head of the Americas represents 15 percent of the total key executive compensation.
- Compensation of Gregory Mcgreeve, Senior Managing director represents 14 percent of the total key executive compensation.
- Compensation of Andrew Tak Shing Lo, Senior Managing Director and Head of Invesco Asia Pacific represents 13 percent of the total key executive compensation.
Interpretation
Key executive compensation includes salary, restricted stock award, non-equity compensation and other compensation.
6. IVZ LOBBYING AND CONTRIBUTIONS
PERIOD | USD |
2006 | $20,000 |
2007 | $0 |
2008 | $50,000 |
2009 | $210,000 |
2010 | $280,000 |
2011 | $280,000 |
2012 | $170,000 |
2013 | $40,000 |
2014 | $40,000 |
2015 | $0 |
2016 | $0 |
2017 | $0 |
2018 | $2,550,000 |
2019 | $3,210,000 |
2020 | $790,000 |
Facts:
Invesco Ltd is incurring lobbying and contributions expenses annually since 2006.
Explanation:
The lobbying expenses vary per cycle depending on the attention given by the federal government on their issues.
Note from OpenSecret.org, Center for Responsive Politics, quoted below:
“NOTE: Figures on this page are calculations by the Center for Responsive Politics based on data from the Senate Office of Public Records. Data for the most recent year was downloaded on April 22, 2020 and includes spending from January 1 – March 31. Prior years include spending from January through December.”
7. IVZ FINANCIAL STRENGTH
DATA
Working Capital | -$10,463,000,000 |
Total Assets | $39,420,300,000 |
Sales | $6,501,700,000 |
EBIT | $1,627,400,000 |
Market value of equity | $3,956,000,000 |
Book value of total liabilities | $25,557,800,000 |
Retained earnings | $5,917,800,000 |
CALCULATION
Ratio | Score | Result | |
A – Working Capital / Total Assets | -0.27 | 1.2 | -0.32 |
B – Retained Earnings / Total Assets | 0.15 | 1.4 | 0.21 |
C – EBIT / Total Assets | 0.04 | 3.3 | 0.14 |
D – Market Value of Equity / Book Value of Total Liabilities | 0.15 | 0.6 | 0.09 |
E – Sales / Total Assets | 0.16 | 1 | 0.16 |
Z-Score | 0.29 |
Formula: Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E
Explanation:
Z-Score is a statistical measurement that compares data points from different sets of data to find correlations. This measurement by Dr. Edward Altman is a significant measure in determining the financial strength of the company because it relies on different weighted financial liquidity and profitability metrics to come up with the overall score. This measure indicates the probability of bankruptcy.
Interpretation
According to Dr. Altman grading scale of measurement 0 – 1.80 indicates that the company will declare bankruptcy in the future.In other terms, the company is close to insolvency. IVZ is a higher risk investment.
Overview
Overall, the financial strength of the company was unstable and risky due to its liabilities which impacted the company’s working capital structure. Investing with Invesco Ltd (IVZ) might be risky according to Dr. Altman measurement.
CITATION
https://www.invesco.com/corporate
https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2020&id=D000026669
https://www.morningstar.com/stocks/xnys/ivz/quote
Researched and written by Criselda