Howden Joinery Group (HWDN.L)

Consumer · LSE · UK

£8.05+0.31% today

Fundamentals

Market cap£4.29B

P/E ratio15.9

Dividend yield2.81%

Revenue growth (YoY)+4.8%

Profit margin11.1%

Return on equity23.1%

Valuation and ratings

DCF fair value£10.93

Upside to fair value+35.8%

Analyst target (mean)£10.12

Analyst range£9.00 to £12.10

Analysts covering16

Consensus viewbuy

Moat score66/100

Overall rating78/100, Strong Buy

Howden Joinery Group trades at £8.05, which is 36% below the £10.93 our discounted cash flow model puts on the business. On that measure alone it screens as undervalued, though a DCF is an argument rather than a measurement, and the market is frequently right about why something is cheap.

Our moat model scores it 66 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.

It changes hands at 15.9 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.

About Howden Joinery Group

Howden Joinery Group Plc supplies various kitchen, joinery, and hardware products in the United Kingdom, France, Belgium, and the Republic of Ireland. The company's product portfolio includes cabinet, worktops, sinks and taps, flooring, appliances, and handles; internal and external doors, such as fire doors, flooring, stair parts, and general joinery items; and cooking, cleaning, and cooling appliances. The company was formerly known as Galiform Plc and changed its name to Howden Joinery Group Plc in September 2010. Howden Joinery Group Plc was incorporated in 1987 and is based in London, the United Kingdom.

Industry: Furnishings, Fixtures & AppliancesEmployees: 12,000HQ: United Kingdom

HWDN.L passes 6 of our 30 screens today

Each screen prints the exact criteria it used, and the circumstances in which it is wrong.

Undervalued on cash flow

Companies trading at least 25% below what our discounted cash flow model says the future cash is worth today.

Quality at a fair price

Good businesses, not cheap ones. A wide moat and a strong rating, at a multiple that has not run away.

Highest conviction

The best overall scores in our universe, restricted to companies where we actually hold enough data to have an opinion worth reading.

Consumer staples

The companies that sell what people buy regardless of the economy. Dull, and dull is the entire point.

UK stocks worth a look

The FTSE is a basket of multinationals that happen to be listed in London. That distinction changes everything about what you are buying.

Dividend aristocrats

Companies with long, unbroken records of raising their dividend. The record is the point: it is evidence, not a promise.

Common questions

Is Howden Joinery Group (HWDN.L) undervalued?

Against our discounted cash flow estimate of £10.93, HWDN.L at £8.05 is 36% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.

What is HWDN.L's P/E ratio?

HWDN.L trades at 15.9 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.

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Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.