Monthly Archives: July, 2020

AstraZeneca PLC ADR (AZN) Extended Graph Analysis

July 31st, 2020 Posted by Extended Analysis No Comment yet

Company Profile

AZN logo

AstraZeneca PLC ADR (NYSE:AZN), primarily listed under London Stock Exchange. A global British-Swedish pharmaceutical biotechnology company. AZN operates as a holding company. 

The company has a variety of products for major diseases including Covid 19 vaccine. Founded on April 6, 1999 when the Swedish Astra AB and the British Zeneca Group were merged. Headquartered in Cambridge, UK.

 

AstraZeneca PLC ADR (AZN) Extended Graph Analysis

 

1. AZN CASH FLOW

AZN CASH FLOW

2015 2016 2017 2018 2019 2020
Net cash flow provided by operating activitIes 3,324,000,000 4,145,000,000 3,578,000,000 2,618,000,000 2,969,000,000 3,495,000,000
Net cash used for investing activities -4,239,000,000 -3,969,000,000 -2,328,000,000 963,000,000 -657,000,000 -976,000,000
Net cash provided by (used for) financing activities 878,000,000 -1,324,000,000 -2,936,000,000 -2,044,000,000 -1,765,000,000 -3,429,000,000
Capital expenditure -2,788,000,000 -2,314,000,000 -1,620,000,000 -1,371,000,000 -2,460,000,000 -2,076,000,000
Free cash flow 536,000,000 1,831,000,000 1,958,000,000 1,247,000,000 509,000,000 1,419,000,000
Working Capital 1,138,000,000 -1,994,000,000 -3,233,000,000 -701,000,000 -2,554,000,000 -2,554,000,000

Facts:

  • Cash from operating activities was $3.5 billion in 2020 trailing twelve months.
  • Cash from investing activities was -$976 million in 2020 trailing twelve months.
  • Net cash provided by (used for) financing activities was -$3.4 billion in 2020 trailing twelve months.
  • Capital expenditure was -$2 billion in 2020 trailing twelve months.
  • Free cash flow was $1.4 billion in 2020 trailing twelve months.
  • Working capital was -$2.6 billion in 2020 trailing twelve months.

Explanation

  • Cash from operations was erratic in movement since 2015 to 2020 trailing twelve months. It grew 5 percent from 2015.
  • Cash from investing activities were investments in property, plant and equipment, acquisitions, purchases of investments and intangibles.
  • Net cash from financing activities was debt issued, dividends payments and other financing activities.
  • Capital expenditure were purchases of property, plant and equipment, and purchases of intangibles in 2020 trailing twelve months.
  • There was free cash flow in the last five years although  erratic in movement.
  • Working capital was negative since 2016 due to current liabilities being higher than the current assets.

Interpretation

AZN has managed to generate a positive cash flow from operations in the last five years. Moreover, free cash flow was positive in five years. Current liabilities were higher than current assets impacting the working capital.

 

2. AZN BALANCE SHEET

AZN BALANCE SHEET

2015 2016 2017 2018 2019
Total cash 6,853,000,000 5,811,000,000 4,461,000,000 5,554,000,000 6,180,000,000
Current Assets 16,007,000,000 13,262,000,000 13,150,000,000 15,591,000,000 15,563,000,000
Net property, plant and equipment 6,413,000,000 6,848,000,000 7,615,000,000 7,421,000,000 8,335,000,000
Total non-current assets 44,117,000,000 49,264,000,000 50,204,000,000 45,060,000,000 45,814,000,000
Total assets 60,124,000,000 62,526,000,000 63,354,000,000 60,651,000,000 61,377,000,000
Current liabilities 14,869,000,000 15,256,000,000 16,383,000,000 16,292,000,000 18,117,000,000
Non-current liabilities 26,765,000,000 32,416,000,000 32,011,000,000 31,891,000,000 30,133,000,000
Total liabilities 41,634,000,000 47,672,000,000 48,394,000,000 48,183,000,000 48,250,000,000
Retained earnings 11,834,000,000 8,140,000,000 8,221,000,000 5,683,000,000 2,812,000,000
Stockholders equity 18,490,000,000 14,854,000,000 14,960,000,000 12,468,000,000 13,127,000,000

Facts:

  • Total cash was $6 billion in 2019.
  • Current assets were $16 billion in 2019.
  • Net property, plant and equipment was $8 billion in 2019.
  • Total non-current assets were $46 billion in 2019.
  • Total assets were $61 billion in 2019.
  • Current liabilities were $18 billion.
  • Non-current liabilities were $30 billion in 2019.
  • Total liabilities were $18 billion in 2019.
  • Total liabilities were $48 billion in 2019.
  • Retained earnings were $2.8 billion in 2019.
  • Stockholders equity was $13 billion in 2019.

Explanation

  • Total cash represents 10 percent of total assets in 2019.
  • Current assets represent 25 percent of the total assets in 2019.
  • Net property plant and equipment represents 14 percent of the total assets in 2019.
  • Total non-current assets represent 75 percent of the total assets in 2019.
  • Current assets grew 2 percent in five years.
  • Current liabilities represent 38 percent of total liabilities.
  • Current liabilities were higher than the current assets which mean that the AZN will have a hard time paying its current obligation in due time.
  • Non-current liabilities represent 62 percent of total liabilities.
  • Total liabilities represent 79 percent of total liabilities and stockholders equity.
  • Retained earnings represent 21 percent of equity.
  • Stockholders equity was 21 percent of the total liabilities and stockholders equity.

Interpretation

AZN is using more of the creditors funds than that of the shareholders investment.Moreover, the company has higher liabilities than the current liabilities which may indicate that the company will have difficulty in paying its current obligations when the due date comes.

 

3. AZN INCOME AND MARKET

AZN INCOME AND MARKET

2015 2016 2017 2018 2019 2020
Revenue 24,708,000,000 23,002,000,000 22,465,000,000 22,090,000,000 24,384,000,000 25,247,000,000
EBIT 4,114,000,000 3,572,000,000 2,292,000,000 1,510,000,000 1,702,000,000 1,825,000,000
Net Income 2,825,000,000 3,499,000,000 3,001,000,000 2,155,000,000 1,335,000,000 1,522,000,000
EBITDA 6,390,000,000 6,589,000,000 5,976,000,000 6,542,000,000 6,143,000,000 6,450,000,000
Market Capitalization 86,458,000,000 68,964,000,000 87,127,000,000 94,423,000,000 130,873,000,000 136,021,000,000
Intrinsic Value 110,302,000,000 318,091,000,000 395,772,000,000 415,463,000,000 1,716,724,000,000 2,093,704,000,000

Facts:

  • Revenue was $25 billion in 2020 trailing twelve months.
  • EBIT was $1.8 billion in 2020 trailing twelve months.
  • Net income was $1.5 billion in 2020 trailing twelve months.
  • EBITDA was $6 billion in 2020 trailing twelve months.
  • Market capitalization was $136 billion in 2020 trailing twelve months.
  • Intrinsic value was $2 trillion in 2020 trailing twelve months.

Explanation

  • Revenue has growth of 2 percent in the last five years.
  • EBIT represents 7 percent of the revenue in 2020 trailing twelve months.
  • Net income represents 6 percent of the revenue in 2020 trailing twelve months.
  • EBITDA represented 25 percent of the revenue in 2020 trailing twelve months.
  • Market capitalization grew 57 percent in five years.
  • Intrinsic value is growing year-over-year and was higher than the market capitalization.

Interpretation

The total revenue increased 5 percent from 2019 to the trailing twelve months. Market capitalization increases year-over-year from 2016 to the current date, July 27, 2020. The stock price of AZN was undervalued.

 

4. AZN FINANCIAL RATIOS

AZN FINANCIAL RATIOS

2015 2016 2017 2018 2019 2020
Asset turnover (average) 0.42 0.38 0.36 0.36 0.4 0.42
Return on assets % 4.76 5.71 4.77 3.48 2.19 2.57
Return on equity % 14.82 20.99 20.13 15.71 10.43 14.32
Return on invested capital % 10.07 12.61 11.04 8.37 5.97 6.71
Debt/Equity 0.76 0.98 1.04 1.39 1.24 1.49
Net Margin % 11.43 15.21 13.36 9.76 5.47 6.03

Facts:

  • Asset turnover was averaging 0.42 in the trailing twelve months.
  • Return on asset was 2.57 percent in the trailing twelve months.
  • Return on equity was 14.32 percent in the trailing twelve months.
  • Return on invested capital was 6.71 percent in the trailing twelve months.
  • Debt/equity ratio was 1.49 in the trailing twelve months.
  • Net margin was 6.03 percent in the trailing twelve months.

Explanation

  • Asset turnover means that for every dollar invested in an asset, AZN generates $0.42 of sales.
  • Return on assets indicate that for every dollar invested in assets, the company generates 2.57 cents of net income.
  • Return on equity indicates that for every dollar invested in equity, AZN generated 14.32 cents of profit.
  • The return on invested capital means AZN generated 6.71 cents for every dollar investment in capital.
  • Debt/Equity indicates that the company uses $1.49 in debt for every dollar in equity, in other terms, debt level is 149 percent of equity.
  • Net margin indicates that for every dollar in revenue, AZN earns $0.06 in net profit.

Interpretation

AZN has managed to generate a fair enough return on its investments in assets and in equity. 

 

5. AZN KEY EXECUTIVE COMPENSATION

AZN KEY EXECUTIVE COMPENSATION

2015 2016 2017 2018 2019
Key Executive Compensation
Salary €1,861,000 €1,897,000 €1,945,000 €2,054,000
Bonus €3,078,000 €1,791,000 €2,941,000 €2,890,000
Annual Other Income €0 €0 €0 €0
Restricted Stock Award €0 €0 €0 €0
Securities Options €8,716,000 €13,411,000 €8,202,000 €15,422,000
LTIP Payout €0 €0 €0 €0
Non-equity compensation €0 €0 €0 €0
Other Compensation €180,000 €213,000 €319,000 €353,000
Total €14,352,000 €17,839,000 €13,947,000 €21,290,000
Pascal Soriot/Executive Director, CEO
Salary €1,167,000 €1,190,000 €1,220,000 €1,289,000
Bonus €2,042,000 €1,167,000 €1,916,000 €1,933,000
Annual Other Income €0 €0 €0 €0
Restricted Stock Award €0 €0 €0 €0
Securities Options €4,723,000 €10,533,000 €5,718,000 €10,487,000
LTIP Payout €0 €0 €0 €0
Non-equity compensation €0 €0 €0 €0
Other Compensation €115,000 €142,000 €1,215,000 €234,000
Total €8,397,000 €13,389,000 €9,435,000 €14,330,000
Marc Dunoyer/Executive Director, DFO
Salary €694,000 €707,000 €725,000 €765,000
Bonus €1,036,000 €624,000 €1,025,000 €957,000
Annual Other Income €0 €0 €0 €0
Restricted Stock Award €0 €0 €0 €0
Securities Options €3,993,000 €2,878,000 €2,484,000 €4,935,000
LTIP Payout €0 €0 €0 €0
Non-equity compensation €0 €0 €0 €0
Other Compensation €65,000 €71,000 €104,000 €119,000
Total €5,955,000 €4,450,000 €4,512,000 €6,960,000

Facts:

  • Total key executive compensation in 2015 was €14,352,000.
  • Total key executive compensation in 2016 was €17,839,00.
  • Key executive compensation in 2017 was €13,947,000.
  • Key executive compensation in 2019 was €21,290,000.

Explanation:

  • The total key executive compensation in 2019 represents 1.64 percent of the net income.
  • The total compensation of Pascal Soriot/Executive Director, CEO represents 67 percent of the total key executive compensation in 2019.
  • Total compensation of Marc Dunoyer/Executive Director, DFO represents 33 percent of the total key executive compensation in 2019.

Interpretation

Total executive compensation includes salary, restricted stock award, securities options, non-equity compensation and other compensation.

 

6. AZN LOBBYING AND CONTRIBUTIONS

AZN LOBBYING AND CONTRIBUTIONS

PERIOD AMOUNT
2007 $4,935,500
2008 $5,196,000
2009 $5,932,000
2010 $5,790,000
2011 $5,640,000
2012 $3,570,000
2013 $4,180,000
2014 $2,890,000
2015 $3,048,733
2016 $2,838,980
2017 $2,389,000
2018 $2,490,000
2019 $2,880,000
2020 $1,560,000

Facts:

AZN was incurring lobbying and contribution expenses annually since 2007 to the current date as seen in the table above taken from OpenSecret.org.

Explanation

A 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 July 23, 2020 and includes spending from January 1 – June 30. Prior years include spending from January through December.”

Interpretation

The amount of contributions by the company varies every cycle depending on the attention given by the federal government on their issues.

 

7. AZN FINANCIAL STRENGTH

AZN FINANCIAL STRENGTH

DATA

Working Capital -$2,554,000,000
Total Assets $61,377,000,000
Sales $25,247,000,000
EBIT $1,825,000,000
Market value of equity $152,407,200,000
Book value of total liabilities $48,250,000,000
Retained earnings $2,812,000,000

CALCULATION

Ratio Score Result
A – Working Capital / Total Assets -0.04 1.2 -0.05
B – Retained Earnings / Total Assets 0.05 1.4 0.06
C – EBIT / Total Assets 0.03 3.3 0.10
D – Market Value of Equity / Book Value of Total Liabilities 3.16 0.6 1.90
E – Sales / Total Assets 0.41 1 0.41
Z-Score 2.42

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

The Z-Score of AstraZeneca was calculated at 2.42. According to Dr. Altman a score of 1.8 to 3.0 indicates that the company is likely to declare bankruptcy in the future. In other words, it indicates that the company is gradually approaching bankruptcy or insolvency. The main factors of this statistical measurement are profitability, liquidity, leverage and efficiency. AZN has a negative working capital structure which impacted its financial strength.

Overview

The company is leveraging more than its equity, The working capital was negative since 2014 due to higher liabilities than current assets. The ratio between equity and liabilities was 26.58 percent.The creditors have more stake than the stockholders. The company has not suffered a negative bottom line in the last five years, the management was able to generate sufficient revenue for the operation of the business. 

Moreover, the calculated intrinsic value was higher than that of the market value. The stock price of AZN was undervalued which may mean a weak investment demand. AZN is head-to-head in developing a vaccine for Covid 19 and has already undergone several trial testing. Foreseen soar in revenue in the near financial period. On the other hand, might indicate a good opportunity for a Buy. 

Citation

https://www.astrazeneca.com/

https://www.morningstar.com/stocks/xnys/azn/quote

https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2020&id=D000043112

Research and written by Criselda

 

 

JPMorgan Class A & Co (JPM) Extended Graph Analysis

July 15th, 2020 Posted by Extended Analysis No Comment yet

Company Profile

JPM logo

JPMorgan Chase & Co. is the oldest and largest  financial institution and a multinational investment bank. Headquartered in New York, New York, United States. The company was founded on December 1, 2000 by AAron Burr and incorporated in Delaware. The company is a provider of multiple investment banking and financial services.

JPMorgan chase & Co. is traded as NYSE:JPM, its predecessor was Bank of the Manhattan Company which was founded in September 1, 1799

JPMorgan Chase & Co (JPM) Extended Graph Analysis

 

1. JPM Cash Flow

JPM CASH FLOW

2015 2016 2017 2018 2019 2020
Net cash flow provided by operating activitIes 73,466,000,000 20,196,000,000 -2,501,000,000 14,187,000,000 6,046,000,000 -33,846,000,000
Net cash used for investing activities 106,980,000,000 -114,949,000,000 -10,283,000,000 -197,993,000,000 -54,013,000,000 -225,464,000,000
Net cash provided by (used for) financing activities -187,511,000,000 98,271,000,000 14,642,000,000 34,158,000,000 32,987,000,000 325,857,000,000
Capital expenditure -77,008,000,000 -124,102,000,000 -107,658,000,000 -104,459,000,000 -255,576,000,000 -354,142,000,000
Free cash flow 73,466,000,000 20,196,000,000 -2,501,000,000 14,187,000,000 6,046,000,000 -33,846,000,000

Facts:

  • Net cash from operating activities was -$33.846 billion in 2020 trailing twelve months.
  • Net cash from investing activities was -$225.464 billion in 2020 trailing twelve months.
  • Cash provided by (used for) financing activities was $325857 billion in 2020 trailing twelve months.
  • Capital expenditures were -$354.142 billion in 2020 trailing twelve months.
  • Free cash flow was -$33.846 billion in 2020 trailing twelve months.

Explanation

  • Cash from operating activities was negative due to the impact of a significant amount of accounts receivable.
  • Net cash used for investing activities was purchases of property, plant and equipment and other investing activities..
  • Net cash provided by (used for) financing activities was preferred stock issued, common stock repurchased, dividends payments and a significant amount of other financing activities.
  • Capital expenditures were purchases of property, plant and equipment.
  • Free cash flow was erratic in movement in the last five years and has a negative amount in the trailing twelve months due to negative cash from operations.

Interpretations

The company was not efficient in generating cash from operations in 2020 trailing twelve months due to a decrease in net income by 18 percent from 2019. Free cash flow was negative as well due to negative cash from operations.

2. JPM BALANCE SHEET

JPM BALANCE SHEET

2015 2016 2017 2018 2019
Total cash 20,490,000,000 23,870,000,000 25,900,000,000 22,320,000,000 21,700,000,000
Net property, plant and equipment 14,360,000,000 14,130,000,000 14,160,000,000 14,930,000,000 25,818,000,000
Total assets 2,370,000,000,000 2,490,000,000,000 2,530,000,000,000 2,620,000,000,000 2,690,000,000,000
Total liabilities 2,120,000,000,000 0 2,280,000,000,000 2,370,000,000,000 2,430,000,000,000
Retained earnings 146,420,000,000 162,440,000,000 177,680,000,000 199,200,000,000 223,210,000,000
Stockholders equity 247,570,000,000 254,190,000,000 255,690,000,000 256,520,000,000 261,320,000,000

Facts:

  • Total cash was $21.7 billion in 2019.
  • Net property, plant and equipment was $26 billion in 2019.
  • Total assets were $2.690 trillion in 2019.
  • Total liabilities were $2.430 trillion in 2019.
  • Retained earnings was $223 billion in 2019
  • Stockholders equity was $261 billion in 2019.

Explanation

  • Total cash represents 0.81 percent of the total assets.
  • Net property, plant and equipment represent 1 percent of the total assets.
  • Total assets have a growth of 14 percent in five years.
  • Total liabilities represents 90 percent of the total liabilities and stockholders equity.
  • Retained earnings represents 85 percent of total equity.
  • Stockholders equity represents 10 percent of the total liabilities and equity.

Interpretation

The company is highly leveraged, it uses more of creditors money than the investors investment in equity. In other terms, the creditors have more stake in the company.

3. JPM INCOME AND MARKET

JPM INCOME AND MARKET

2015 2016 2017 2018 2019 2020
Revenue 93,543,000,000 95,668,000,000 99,624,000,000 109,029,000,000 115,627,000,000 114,755,000,000
Net Income 24,442,000,000 24,733,000,000 22,778,000,000 30,923,000,000 34,844,000,000 28,483,000,000
Market Capitalization 241,899,000,000 308,768,000,000 371,052,000,000 319,780,000,000 429,913,000,000 296,506,000,000
Intrinsic Value 303,298,000,000 403,087,000,000 839,971,000,000 707,132,000,000 973,461,000,000 778,154,000,000

Facts

  • Revenue was $115 billion in 2020 trailing twelve months.
  • Net income was $28 billion in 2020 trailing twelve months
  • Market capitalization was $295.506 billion in 2020 trailing twelve months.
  • Intrinsic value was $778 billion in 2020 trailing twelve months.

Explanation

  • Revenue grew 23 percent in five years.
  • Net income grew 17 percent in five years.
  • Market capitalization was lesser by 31 percent against intrinsic value from 2019 to the trailing twelve months.
  • Intrinsic value was higher than market capitalization meaning the stock price of JPM was undervalued.

Interpretation

Net income represents 25 percent of the revenue. The company’s income statement does show any negative bottom line in the last five years.

4. JPM FINANCIAL RATIOS

JPM FINANCIAL RATIOS

2015 2016 2017 2018 2019 2020
Asset turnover (average) 0.03 0.04 0.04 0.04 0.04 0.04
Return on assets % 0.91 0.93 0.90 1.19 1.30 0.96
Return on equity % 10.34 10.05 9.86 13.35 14.91 12.21
Debt/Equity 1.30 1.29 1.24 1.22 1.24 1.29

Facts

  • Asset turnover was averaging 0.04 in 2020 trailing twelve months.
  • Return on assets was 0.96 percent in 2020 trailing twelve months.
  • Return on equity was 12.21 percent in 2020 trailing twelve months.
  • Debt/Equity ratio was 1.29 in 2020 trailing twelve months.

Explanation

  • Asset turnover indicates that for every dollar in assets, the company generated .04 cents of sales which is not very efficient in using its assets.
  • Return on assets indicted that for every $1 invested in assets it generated 0.96 cents of net income.
  • Return on equity indicates that for every dollar invested in equity it generated 12 cents in profit.
  • Debt/Equity ratio indicates that for every dollar invested in equity the company has $1.29 in debt. Debt level is 129 percent of equity.

Interpretation

Financial ratios show that the management was not very efficient in generating a return on the investment made.The company is highly leveraged.

5. JPM KEY EXECUTIVE COMPENSATION

JPM KEY EXECUTIVE COMPENSATION

2015 2016 2017 2018 2019
Key Executive Compensation
Salary 9,884,250 11,303,234 11,998,628 12,026,026 12,655,889
Bonus 16,000,000 17,000,000 25,300,000 27,100,000 31,373,333
Annual Other Income 0 0 0 0 0
Restricted Stock Award 35,684,204 48,615,750 61,146,766 66,211,372 74,673,974
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 0 0 0 0 0
Other Compensation 961,291 357,786 427,581 648,889 708,657
Total 62,529,873 77,340,235 98,947,621 106,004,281 119,556,090
James S Dimon, Chairman of the Board and CEO
Salary 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000
Bonus 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000
Annual Other Income 0 0 0 0 0
Restricted Stock Award 11,100,000 20,500,000 21,500,000 23,000,000 24,500,000
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 0 0 0 0 0
Other Compensation 621,060 205,551 286,228 519,840 578,246
Total 18,230,313 27,236,892 28,321,737 30,033,745 31,612,616
Gordon A. Smith, Co-President and Co-COO, CEO of Consumer and Community Banking
Salary 750,000 750,000 750,000
Bonus 7,700,000 8,500,000 8,700,000
Annual Other Income 0 0 0
Restricted Stock Award 10,950,000 11,550,000 12,750,000
Securities Options 0 0 0
LTIP Payout 0 0 0
Non-Equity Compensation 0 0 0
Other Compensation 0 0 0
Total 19,405,985 20,804,089 22,209,071
Daniel Pinto, Co-President, Co-Chief Operating Officer, CEO of the Corporate and Investment Bank
Salary 6,884,250 8,303,234 8,238,628 8,276,026 8,239,222
Bonus 0 0 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 9,584,204 11,615,750 10,696,766 12,761,372 13,723,974
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 0 0 0 0 0
Other Compensation 217,881 103,640 80,384 68,548 72,246
Total 16,687,210 20,022,624 19,015,778 21,105,946 22,035,442
Mary Callahan Erdoes, CEO, Asset and Wealth Management
Salary 750,000 750,000 750,000 750,000 750,000
Bonus 6,900,000 7,300,000 7,500,000 7,900,000 8,100,000
Annual Other Income 0 0 0 0 0
Restricted Stock Award 9,450,000 10,330,000 10,950,000 11,250,000 11,850,000
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 0 0 0 0 0
Other Compensation 0 0 0 0 0
Total 17,100,000 18,432,124 19,242,152 19,900,000 20,754,269
Marianne Lake, CEO, Consumer Lending
Salary 750,000 750,000 750,000 750,000 750,000
Bonus 4,100,000 4,700,000 5,100,000 5,700,000 4,840,000
Annual Other Income 0 0 0 0 0
Restricted Stock Award 5,550,000 6,150,000 7,050,000 7,650,000 8,550,000
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 0 0 0 0 0
Other Compensation 112,350 48,595 60,969 60,501 58,165
Total 10,512,350 11,648,595 12,960,969 14,160,501 15,198,165
Jennifer A. Piepzak, CFO
Salary 666,667
Bonus 3,733,333
Annual Other Income 0
Restricted Stock Award 3,300,000
Securities Options 0
LTIP Payout 0
Non-Equity Compensation 0
Other Compensation 0
Total 7,746,527

Facts:

  • Total key executive compensation was $62,529,873 in 2015.
  • Total key executive compensation in 2016 was $77,340,235.
  • Key executive compensation 2017 was $98,947,621.
  • Key executive compensation in 2018 was $106,004,281.
  • Executive compensation in 2019 was $119,556,090.

Explanation

  • Total key executive compensation represents 0.32 percent of the net income in 2019.
  • Total compensation of James S Dimon, Chairman of the Board and CEO represents 26 percent of the total key executive compensation.
  • Compensation of Gordon A. Smith, Co-President and Co-COO, CEO of Consumer and Community Banking represents 19 percent of the total compensation.
  • ‘Compensation of Daniel Pinto, Co-President, Co-Chief Operating Officer, CEO of the Corporate and Investment Bank represents 18 percent of the total key executive compensation.
  • The compensation of Mary Callahan Erdoes, CEO, Asset and Wealth Management represents 17 percent of the total compensation.
  • The compensation of Marianne Lake, CEO, Consumer Lending represents 13 percent of the key executive compensation.
  • Compensation of Jennifer A. Piepzak, CFO represents 6 percent of the total compensation.

Interpretation

The total key executive compensation was less than one percent of the total net income in 2019. 

6. JPM LOBBYING AND CONTRIBUTIONS

JPM LOBBYING AND CONTRIBUTIONS

PERIOD AMOUNT
1999 $600,000
2000 $2,910,000
2001 $6,300,000
2002 $4,700,000
2003 $6,710,000
2004 $4,080,000
2005 $3,640,000
2006 $6,120,000
2007 $6,460,000
2008 $5,930,000
2009 $6,170,000
2010 $7,410,000
2011 $7,620,000
2012 $8,060,000
2013 $5,460,000
2014 $6,280,000
2015 $3,590,000
2016 $2,920,000
2017 $2,990,000
2018 $2,970,000
2019 $2,810,000
2020 $1,944,507

Facts:

  • JPMorgan is incurring lobbying and contributions expenditures since 2011 to politicians.

Explanation:

A note from OpenSecret.org Center for Responsive Politics, quoted below:

“Contributions to 527s are not included in the Individuals, PACs, Soft (Indivs), or Soft (Orgs) columns, so the sum of these columns may not equal the Total column.

The numbers on this page are based on contributions of $200 or more from PACs and individuals to federal candidates and from PAC, individual and soft money donors to political parties, as reported to the Federal Election Commission. While election cycles are shown in charts as 1996, 1998, 2000 etc. they actually represent two-year periods. For example, the 2002 election cycle runs from January 1, 2001 to December 2002.

Soft money contributions were not publicly disclosed until the 1991-92 election cycle. Soft money donations to parties were banned after the 2002 cycle.

Data for the current election cycle was released by the Federal Election Commission on June 22, 2020.”

Interpretation

Lobbying and contributions to politicians vary every cycle; it may increase or decrease in amount depending on the attention given by the federal government on the issues of the company.

Overview

The net margin was good at 25 percent in the trailing twelve months, it has diversity income streams. The company uses more resources from creditors than from the investor’s investment in equity. In other terms, the creditors have more stake than the investors.  The stock price of JPM was undervalued up to the point of writing and posting to websites.

CITATION

https://www.jpmorganchase.com/

https://www.morningstar.com/stocks/xnys/jpm/quote

https://www.opensecrets.org/orgs/summary?id=D000000103

Researched and written by Criselda

 

Visa Inc Class A (V) Extended Graph Analysis

July 2nd, 2020 Posted by Extended Analysis No Comment yet

Company Profile

VISA logo

Visa Inc Class A (NYSE:V) is a payment technology company operating globally that allows consumers, businesses, banks and governments to use digital currency. The company introduced the electronic payment system over 60 years ago. There are more than 3 billion Visa accounts worldwide in more than 200 countries and regions. In 2019 there were 200 billion payments and cash transactions that were counting with the Visa card, and there were 11 trillion in payments and cash volumes. It uses artificial intelligent technology that analyses every detail of transactions. Visa network is made up of Fiber, Internet, Wireless and Virtual Connections that tie-up consumers, businesses, governments and financial institutions.

The company was founded in 1958 as BankAmericard by Dee Hock, and in 1976 BankAmericard became VISA. Headquartered in Foster City, California, USA.

 

Visa Inc Class A (V) Extended Graph Analysis

 

1. V Cash Flow

V CASH FLOW

2015 2016 2017 2018 2019 2020
Net cash flow provided by operating activitIes 6,584,000,000 5,574,000,000 9,208,000,000 12,713,000,000 12,784,000,000 12,768,000,000
Net cash used for investing activities -1,435,000,000 -10,916,000,000 735,000,000 -3,084,000,000 -591,000,000 2,246,000,000
Net cash provided by (used for) financing activities -3,603,000,000 7,477,000,000 -5,924,000,000 -11,240,000,000 -12,061,000,000 -12,462,000,000
Capital expenditure -414,000,000 -523,000,000 -707,000,000 -718,000,000 756,000,000 -850,000,000
Free cash flow 6,170,000,000 5,051,000,000 8,501,000,000 11,995,000,000 12,028,000,000 11,918,000,000
Working Capital 5,518,000,000 6,267,000,000 9,029,000,000 6,911,000,000 7,555,000,000 7,555,000,000

Facts:

  • Net cash from operations was $12.8 billion in 2020 trailing twelve months.
  • Net cash from investing was $2.45 billion in 2020 in trailing twelve months.
  • Cash provided by (used for) financing activities was $-12.46 billion in 2020 in trailing twelve months.
  • Capital expenditures were $-850 million in 2020 trailing twelve months.
  • Free cash flow was $11.92 billion in 2020 in trailing twelve months.
  • Working capital was $7.56 billion in 2020 in trailing twelve months.

Explanation

  • Cash from operations increased year-over-year due to increases in net income. 
  • Cash from operations grew 94 percent in five years.
  • Cash used for investing activities were sales/maturities of investments, investment in property, plant and equipment, acquisitions and purchases of investments.
  • Net cash provided by (used for) financing activities were common stock repurchased, dividends paid and other financing activities.
  • Capital expenditures were investment in property, plant and equipment.
  • Free cash flow increases year over year and has a growth of 93 percent in five years.
  • Working capital grew 37 percent in five years.

Interpretation

The company has the capability of providing cash from operations year-over-year by providing a sufficient net income.

 

2. V BALANCE SHEET

V BALANCE SHEET

2015 2016 2017 2018 2019
Total cash 6,015,000,000 8,938,000,000 13,438,000,000 11,709,000,000 12,074,000,000
Current Assets 10,892,000,000 14,313,000,000 19,023,000,000 18,216,000,000 20,970,000,000
Net property, plant and equipment 1,888,000,000 2,150,000,000 2,253,000,000 2,472,000,000 2,695,000,000
Total non-current assets 29,344,000,000 49,722,000,000 48,954,000,000 51,009,000,000 51,604,000,000
Total assets 40,236,000,000 64,035,000,000 67,977,000,000 69,225,000,000 72,574,000,000
Current liabilities 5,374,000,000 8,046,000,000 9,994,000,000 11,305,000,000 13,415,000,000
Non-current liabilities 5,020,000,000 23,077,000,000 25,223,000,000 23,914,000,000 24,475,000,000
Total liabilities 10,394,000,000 31,123,000,000 35,217,000,000 35,219,000,000 37,890,000,000
Retained earnings 11,843,000,000 10,462,000,000 9,508,000,000 11,318,000,000 13,502,000,000
Stockholders equity 29,842,000,000 32,912,000,000 32,760,000,000 34,006,000,000 34,684,000,000

Facts

  • Total cash was $12.07 billion in 2019.
  • Current assets were $20.97 billion in 2019.
  • Net property, plant and equipment was $2.7 billion in 2019.
  • Non-current assets were $51.6 billion in 2019.
  • Total assets were $72.57 billion in 2019.
  • Current liabilities were $13.42 billion in 2019.
  • Non-current liabilities were $24.48 billion in 2019
  • Total liabilities were $37.89 billion in 2019.
  • Retained earnings were $13.5 billion in 2019.
  • Stockholders equity was $34.68 billion in 2019.

Explanation

  • Total cash has increased 52 percent in five years although it has an erratic movement.
  • Total cash represents 17 percent of the total assets.
  • Current assets grew 93 percent in five years and it represents 29 percent of the total assets.
  • Net property, plant and equipment increased year-over-year and it grew 43 percent in five years. It represents 4 percent of the total assets.
  • Non-current assets grew 76 percent in five years and it represents 71 percent of the total assets.
  • Total assets increased year-over-year and it has a growth of 80 percent in five years.
  • Current liabilities represent 35 percent of total liabilities.
  • Non-current liabilities represent 65 percent of total liabilities.
  • Total liabilities represent 52 percent of total liabilities and shareholders equity.
  • Retained earnings was 39 percent of total equity.
  • Shareholders equity represents 48 percent of total liabilities and shareholders equity.

Interpretation

The balance sheet of Visa Inc was healthy and the company is liquid. The company has the ability to pay its current obligations in due time. The company is using both investors and creditors money at 48 and 52 percent, respectively in its business operations.

 

3. V INCOME AND MARKET

V INCOME AND MARKET

2015 2016 2017 2018 2019 2020
Revenue 13,880,000,000 15,082,000,000 18,358,000,000 20,609,000,000 22,977,000,000 23,885,000,000
EBIT 9,078,000,000 9,762,000,000 12,163,000,000 13,561,000,000 15,401,000,000 15,962,000,000
Net Income 6,328,000,000 5,991,000,000 6,699,000,000 10,301,000,000 12,080,000,000 12,482,000,000
EBITDA 9,572,000,000 8,941,000,000 12,813,000,000 14,031,000,000 18,057,000,000 16,552,000,000
Market Capitalization 186,088,000,000 186,817,000,000 266,145,000,000 299,355,000,000 416,792,000,000 428,863,000,000
Intrinsic Value 234,104,000,000 232,119,000,000 388,515,000,000 410,963,000,000 594,397,000,000 540,593,000,000

Facts:

  • Revenue was $24 billion in 2020 trailing twelve months.
  • EBIT was $16 billion in 2020 trailing twelve months.
  • Net income was $12.5 in 2020 trailing twelve months.
  • EBITDA was $17 billion in 2020 trailing twelve months.
  • Market Capitalization was $428.88 billion in 2020 trailing twelve months.
  • Intrinsic value was $540.59 billion in 2020 trailing twelve months.

Explanation

  • The revenue increased year-over-year and it grew 72 percent in five years.
  • EBIT increases year-over-year and it grew 76 percent in five years.
  • EBIT is 67 percent of revenue.
  • Net income grew 97 percent in 5 years and increases year-over-year. 
  • Net income represented 52 percent of revenue.
  • EBITDA increases year-over-year and it grew 73 percent in five years.
  • EBITDA represented 59 percent of the total revenue.
  • Market capitalization increased year-over-year and it grew 130 percent in five years.
  • Intrinsic value was greater by 26 percent compared to the market capitalization.

Interpretation

The company is profitable and financially healthy. The management has the ability to produce sufficient revenue for the operation of the business and it showed in the last five years. Moreover, net margin was 52 percent,  In other words, the management has the ability and efficiency to earn an impressive profit. The stock price of VISA is undervalued by 26 percent.

 

4. V FINANCIAL RATIOS

V FINANCIAL RATIOS

2015 2016 2017 2018 2019 2020
Asset turnover (average) 0.35 0.29 0.28 0.30 0.32 0.33
Return on assets % 16.02 11.37 9.80 14.49 17.04 17.50
Return on equity % 22.05 20.79 23.76 35.65 41.83 43.09
Return on invested capital % 22.05 14.07 15.05 23.44 26.52 25.88
Debt/Equity 0.00 0.58 0.61 0.58 0.57 0.47

Facts:

  • Asset turnover was averaging 0.33 ratio in 2020 trailing twelve months.
  • Return on assets was 17.5 percent in 2020 trailing twelve months.
  • Return on equity was 43.09 percent in 2020 trailing twelve months.
  • Return on invested capital was 25.88 percent in 2020 trailing twelve months.
  • Debt/Equity ratio was 0.47 in 2020 trailing twelve months.

Explanation

  • Asset turnover ratio indicates that for every dollar of assets it generated 33 cents of sales.
  • Return on assets indicates that the company is generating $0.175 for every dollar invested in assets.
  • Return on equity indicates that for every dollar in shareholders equity it generated $0.43 in net profit.
  • Return on invested capital indicates that the company made $0.43 for every dollar invested in capital.
  • Debt/Equity ratio indicates that for every dollar in equity, the company has 47 cents in leverage.

Interpretation

The company is in good standing and financial health. The company was able to generate a good return on its investments.

 

5. V KEY EXECUTIVE COMPENSATION

V KEY EXECUTIVE COMPENSATION

2015 2016 2017 2018 2019
Key Executive Compensation
Salary 2,047,674 2,350,090 4,100,912 4,775,172 4,875,220
Bonus 6,875,000 3,125,000 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 10,947,425 9,353,088 25,802,382 31,198,595 38,432,445
Securities Options 1,800,260 4,104,755 7,894,994 108,750,019 10,425,006
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 3,842,153 3,344,438 16,112,600 17,954,467 12,213,725
Other Compensation 1,015,585 165,776 152,428 115,916 139,486
Total 26,571,982 22,489,867 54,071,010 64,927,046 66,094,540
Alfred F. Kelly Jr., Chairman and CEO
Salary 1,150,799 1,300,038 1,400,059
Bonus 0 0 0
Annual Other Income 0 0 0
Restricted Stock Award 11,883,298 8,693,984 14,246,423
Securities Options 2,749,995 3,500,008 4,312,489
LTIP Payout 0 0 0
Non-Equity Compensation 5,875,000 5,973,500 4,270,000
Other Compensation 75,362 26,416 36,800
Total 21,734,454 19,493,946 24,265,771
Vasant M. Prabhu, Vice Chairman and CFO
Salary 547,616 850,032 850,032 1,000,038 1,000,040
Bonus 6,875,000 3,125,000 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 7,500,041 1,757,160 3,017,648 5,848,193 6,493,501
Securities Options 0 1,031,255 1,387,503 1,999,994 1,625,005
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 1,081,253 1,230,375 3,221,500 3,704,000 2,440,000
Other Compensation 979,180 124,626 16,200 16,500 26,800
Total 16,997,563 8,134,100 8,494,072 12,569,940 11,586,718
Ryan Mcinerney, President
Salary 750,029 750,029 750,029 900,035 900,047
Bonus 0 0 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 1,951,504 3,984,063 4,363,957 6,777,537 7,133,141
Securities Options 928,242 1,476,498 1,437,500 2,250,003 1,825,008
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 1,498,275 10,153,125 2,842,500 3,333,600 2,196,000
Other Compensation 20,505 22,550 20,066 21,500 30,621
Total 5,163,379 7,401,817 9,417,311 13,286,026 12,088,417
Rajat Taneja, President Technology
Salary 750,029 750,029 750,029 900,035 900,047
Bonus 0 0 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 1,495,880 3,611,865 4,575,318 6+803356 6,977,836
Securities Options 872,018 1,597,002 1,549,999 2,125,007 1,712,503
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 1,262,625 960,938 2,820,000 3,306,600 2,196,000
Other Compensation 15,900 18,600 17,450 17,750 22,215
Total 4,411,040 6,953,950 9,714,526 13,154,517 11,810,570
Kelly Mahon Tullier, EVP, General Counsel and corporate Secretary
Salary 600,023 675,026 675,027
Bonus 0 0 0
Annual Other Income 0 0 0
Restricted Stock Award 19,662,161 3,075,525 3,581,544
Securities Options 769,997 999,997 950,001
LTIP Payout 0 0 0
Non-Equity Compensation 1,353,600 1,636,767 1,111,725
Other Compensation 23,350 33,750 23,050
Total 4,710,647 6,422,617 6,343,064

Facts:

  • The key executive compensation in 2015 was $26,572,000.
  • Key executive compensation in 2016 was $22,490,000.
  • Key executive compensation in 2017 was $54,071,000.
  • Executive compensation in 2018 was $64,927,000.
  • The key executive compensation in 20149 was $66,095,000.

Explanation

  • The total key executive compensation represents 0.53 percent of the net income.
  • Total compensation of Alfred F. Kelly, CEO represented 37 percent of the total key executive compensation.
  • Total compensation of Vasant M. Prabhu, CFO represents 18 percent of the total key executive compensation.
  • Compensation of Ryan Mcinemey, President was 18 percent of the total key executive compensation.
  • Compensation of Rajat Taneja, President Technology was 18 percent of total key executive compensation.
  • The total compensation of Kelly Mahon Tullier, EVP, General Counsel and corporate Secretary represents 10 percent of the total key executive compensation.

Interpretation

Total executive compensation includes salary, restricted stock award, securities options, non-equity compensation and other compensation.

 

 

6. V LOBBYING AND CONTRIBUTIONS

V LOBBYING AND CONTRIBUTIONS

PERIOD AMOUNT
1998 $3,550,000
1999 $2,410,000
2000 $2,269,000
2001 $2,232,276
2002 $3,126,476
2003 $3,079,441
2004 $2,935,545
2005 $3,927,059
2006 $4,909,687
2007 $5,340,000
2008 $4,810,000
2009 $6,010,000
2010 $5,430,000
2011 $6,880,000
2012 $5,550,000
2013 $5,210,000
2014 $4,310,000
2015 $3,840,000
2016 $3,800,000
2017 $3,750,000
2018 $3,740,000
2019 $3,760,000
2020 $860,000

Facts:

Since 1998 to the current date, Visa Inc Class A is incurring lobbying and contributions expenditure to politicians. The annual record shows above.

Explanation

A 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.”

Interpretation

Lobbying and contributions to politicians vary every cycle; it may increase or decrease in amount depending on the attention given by the federal government on the issues of the company.

 

7. V FINANCIAL STRENGTH

V FINANCIAL STRENGTH

DATA

Working Capital $7,555,000,000
Total Assets $72,574,000,000
Sales $23,885,000,000
EBIT $15,962,000,000
Market value of equity $409,197,500,000
Book value of total liabilities $37,890,000,000
Retained earnings $13,502,000,000

 

CALCULATIONS

Ratio Score Result
A – Working Capital / Total Assets 0.10 1.20 0.12
B – Retained Earnings / Total Assets 0.19 1.40 0.26
C – EBIT / Total Assets 0.22 3.30 0.73
D – Market Value of Equity / Book Value of Total Liabilities 10.80 0.60 6.48
E – Sales / Total Assets 0.33 1.00 0.33
Z-Score 7.92

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

The Z-Score of Visa Inc Class A was calculated at 7.92 score. It indicates that the company is very far in declaring bankruptcy in near future or in other terms, the company is not close to insolvency according to Dr. Altman’s grading scale. The main factors of this statistical measurement are profitability, liquidity, leverage and efficiency. Visa Inc has a strong financial health.

Overview

VISA Inc. Class A is financially healthy and stable. The profit and loss account shows that the company is profitable, which represents that the management is capable of producing a net income of half of the total revenue. Moreover, the stock price of VISA Inc is undervalued, in other words, the stock price is below the fair market value, moreover, per calculation there is a margin of safety in buying the stocks of VISA Inc Class A.

CITATION

https://www.morningstar.com/stocks/xnys/v/quote

https://investor.visa.com/

https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2020&id=D000029689

Researched and written by Criselda

Note:

Research Reports can be found under the company tab.