Schroders PLC SDR

Morningstar Rating
GBX 348.60 +1.60 (0.46%)
View Full Chart

Company Report

Strategies in Place to Deal With Margin Pressure

Margin pressure sums up the challenge and investment case for Schroders. Like most of its U.K. peers, Schroders has seen a material decline in its management fee margin. To halt this decline, Schroders has laid out a strategy that hits all the right notes. It aims to focus its resources on higher-margin asset classes, increasing ownership of client relationships, and investing heavily in technology to compete in a digital world. Schroders is executing well on this strategy and early signs are that the decline in margins is at least slowing down. Schroders has made some judicious acquisitions that support its strategy

Price vs Fair Value

SDR is trading at a 432% premium.
Price
GBX 347.00
Fair Value
GBX 472.00
Uncertainty
Medium
1-Star Price
GBX 595.00
5-Star Price
GBX 757.00
Economic Moat
Tkxxsg
Capital Allocation
Pglwtbg

Bulls Say, Bears Say

Bulls

The asset-management business model remains highly cash-generative with a limited need for fixed or working capital investment combined with wide operating margins driving profitability.

Bears

The active asset-management industry is in secular decline. Schroders has not been an exception. Fee margins have declined by one third over the past decade and the declining trend is showing no signs of slowing down as competition from passive investment and regulatory pressure continue to eat into margins.

Trading Information

Previous Close Price
GBX 347.00
Day Range
GBX 343.80349.00
52-Week Range
GBX 327.00447.60
Bid/Ask
GBX 310.00 / GBX 369.60
Market Cap
GBX 561.98 Bil
Volume/Avg
1.4 Mil / 2.0 Mil

Key Statistics

Price/Earnings (Normalized)
10.82
Price/Sales
1.92
Dividend Yield (Trailing)
6.20%
Dividend Yield (Forward)
6.20%
Total Yield
6.89%

Company Profile

Schroders is an independent, U.K.-based, active asset manager founded in 1804. The bulk of Schroders' client assets are from institutions, but its retail operations are more profitable. Schroders has also increasingly expanded its wealth management presence. The U.K. accounts for just under half of Schroders' assets under management, while continental Europe and Asia account for 20% each. In 2013 Schroders purchased the Cazenove private clients business from JP Morgan, expanding its wealth management business. It recently formed a joint venture with Lloyds Bank, Schroders Personal Wealth, to provide independent financial advice to midmarket clients.
Sector
Financial Services
Industry
Asset Management
Stock Style Box
Mid Value
Total Number of Employees
6,438

Competitors

Valuation

Metric
SDR
BAER
AMUN
Price/Earnings (Normalized)
10.8225.2810.68
Price/Book Value
1.291.721.21
Price/Sales
1.922.822.39
Price/Cash Flow
11.119.0011.05
Price/Earnings
SDR
BAER
AMUN

Financial Strength

Metric
SDR
BAER
AMUN
Quick Ratio
5.030.82
Current Ratio
5.032.15
Interest Coverage
11.81
Quick Ratio
SDR
BAER
AMUN

Profitability

Metric
SDR
BAER
AMUN
Return on Assets (Normalized)
2.41%0.39%3.55%
Return on Equity (Normalized)
11.93%6.30%11.42%
Return on Invested Capital (Normalized)
10.19%9.84%
Return on Assets
SDR
BAER
AMUN

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