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REA Group

ASX:REA
Snowflake Description

High growth potential with adequate balance sheet.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
REA
ASX
A$14B
Market Cap
  1. Home
  2. AU
  3. Media
Company description

REA Group Limited engages in online property advertising business in Australia, Asia, and North America. The last earnings update was 103 days ago. More info.


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REA Share Price and Events
7 Day Returns
3.3%
ASX:REA
1.8%
AU Interactive Media and Services
-0.1%
AU Market
1 Year Returns
44.6%
ASX:REA
38.2%
AU Interactive Media and Services
16.5%
AU Market
REA Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
REA Group (REA) 3.3% -6.7% -1.7% 44.6% 104.2% 133.7%
AU Interactive Media and Services 1.8% -3.9% 2.5% 38.2% 76.9% 102.9%
AU Market -0.1% 1.5% 3.5% 16.5% 21.9% 20.6%
1 Year Return vs Industry and Market
  • REA outperformed the Interactive Media and Services industry which returned 38.2% over the past year.
  • REA outperformed the Market in Australia which returned 16.5% over the past year.
Price Volatility
REA
Industry
5yr Volatility vs Market

REA Value

 Is REA Group undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of REA Group to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for REA Group.

ASX:REA Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 10 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 8.5%
Perpetual Growth Rate 10-Year AU Government Bond Rate 2.3%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for ASX:REA
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year AU Govt Bond Rate 2.3%
Equity Risk Premium S&P Global 6%
Interactive Media and Services Unlevered Beta Simply Wall St/ S&P Global 1.04
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 1.037 (1 + (1- 30%) (2.26%))
1.036
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
1.04
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2.31% + (1.036 * 5.96%)
8.49%

Discounted Cash Flow Calculation for ASX:REA using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for REA Group is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

Note: Free cash flow to equity valuations ignore the company's cash or debt.

ASX:REA DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (AUD, Millions) Source Present Value
Discounted (@ 8.49%)
2020 355.83 Analyst x3 328.00
2021 381.63 Analyst x3 324.26
2022 437.00 Analyst x2 342.26
2023 488.70 Analyst x2 352.82
2024 547.00 Analyst x1 364.02
2025 590.37 Est @ 7.93% 362.14
2026 627.23 Est @ 6.24% 354.66
2027 658.99 Est @ 5.06% 343.47
2028 686.92 Est @ 4.24% 330.02
2029 712.06 Est @ 3.66% 315.34
Present value of next 10 years cash flows A$3,417.00
ASX:REA DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2029 × (1 + g) ÷ (Discount Rate – g)
= A$712.06 × (1 + 2.31%) ÷ (8.49% – 2.31%)
A$11,800.07
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= A$11,800.07 ÷ (1 + 8.49%)10
A$5,225.77
ASX:REA Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= A$3,417.00 + A$5,225.77
A$8,642.77
Equity Value per Share
(AUD)
= Total value / Shares Outstanding
= A$8,642.77 / 131.71
A$65.62
ASX:REA Discount to Share Price
Calculation Result
Value per share (AUD) From above. A$65.62
Current discount Discount to share price of A$104.36
= -1 x (A$104.36 - A$65.62) / A$65.62
-59%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

  • The current share price of REA Group is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for REA Group's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are REA Group's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
ASX:REA PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2019-06-30) in AUD A$0.80
ASX:REA Share Price ** ASX (2019-11-19) in AUD A$104.36
Global Interactive Media and Services Industry PE Ratio Median Figure of 118 Publicly-Listed Interactive Media and Services Companies 29.44x
Australia Market PE Ratio Median Figure of 519 Publicly-Listed Companies 18.7x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of REA Group.

ASX:REA PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= ASX:REA Share Price ÷ EPS (both in AUD)

= 104.36 ÷ 0.80

130.92x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • REA Group is overvalued based on earnings compared to the Global Interactive Media and Services industry average.
  • REA Group is overvalued based on earnings compared to the Australia market.
Price based on expected Growth
Does REA Group's expected growth come at a high price?
Raw Data
ASX:REA PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 130.92x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 10 Analysts
28.6%per year
Global Interactive Media and Services Industry PEG Ratio Median Figure of 74 Publicly-Listed Interactive Media and Services Companies 1.49x
Australia Market PEG Ratio Median Figure of 347 Publicly-Listed Companies 1.6x

*Line of best fit is calculated by linear regression .

ASX:REA PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 130.92x ÷ 28.6%

4.58x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • REA Group is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on REA Group's assets?
Raw Data
ASX:REA PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2019-06-30) in AUD A$6.87
ASX:REA Share Price * ASX (2019-11-19) in AUD A$104.36
Australia Interactive Media and Services Industry PB Ratio Median Figure of 20 Publicly-Listed Interactive Media and Services Companies 7.33x
Australia Market PB Ratio Median Figure of 1,584 Publicly-Listed Companies 1.75x
ASX:REA PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= ASX:REA Share Price ÷ Book Value per Share (both in AUD)

= 104.36 ÷ 6.87

15.19x

* Primary Listing of REA Group.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • REA Group is overvalued based on assets compared to the AU Interactive Media and Services industry average.
X
Value checks
We assess REA Group's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Interactive Media and Services industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Interactive Media and Services industry average (and greater than 0)? (1 check)
  5. REA Group has a total score of 0/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

REA Future Performance

 How is REA Group expected to perform in the next 1 to 3 years based on estimates from 10 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
28.6%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is REA Group expected to grow at an attractive rate?
  • REA Group's earnings growth is expected to exceed the low risk savings rate of 2.3%.
Growth vs Market Checks
  • REA Group's earnings growth is expected to exceed the Australia market average.
  • REA Group's revenue growth is expected to exceed the Australia market average.
Annual Growth Rates Comparison
Raw Data
ASX:REA Future Growth Rates Data Sources
Data Point Source Value (per year)
ASX:REA Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 10 Analysts 28.6%
ASX:REA Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 10 Analysts 7.5%
Australia Interactive Media and Services Industry Earnings Growth Rate Market Cap Weighted Average 28.8%
Australia Interactive Media and Services Industry Revenue Growth Rate Market Cap Weighted Average 7.3%
Australia Market Earnings Growth Rate Market Cap Weighted Average 9.7%
Australia Market Revenue Growth Rate Market Cap Weighted Average 3.6%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
ASX:REA Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (4 months ago) See Below
Future Estimates Average of up to 10 Analyst Estimates (S&P Global) See Below
All numbers in AUD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
ASX:REA Future Estimates Data
Date (Data in AUD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2024-06-30 1,408 1
2023-06-30 1,290 573 484 2
2022-06-30 1,129 516 440 8
2021-06-30 1,030 453 379 10
2020-06-30 915 410 319 10
2019-11-19
ASX:REA Past Financials Data
Date (Data in AUD Millions) Revenue Cash Flow Net Income *
2019-06-30 941 364 105
2019-03-31 939 360 114
2018-12-31 936 355 123
2018-09-30 902 341 188
2018-06-30 867 326 253
2017-12-31 766 309 51
2017-09-30 719 303 49
2017-06-30 671 297 48
2016-12-31 627 239 268
2016-09-30 603 230 261

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • REA Group's earnings are expected to grow significantly at over 20% yearly.
  • REA Group's revenue is expected to grow by 7.5% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
ASX:REA Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (4 months ago) See Below
Future Estimates Average of up to 10 Analyst Estimates (S&P Global) See Below

All data from REA Group Company Filings, last reported 4 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

ASX:REA Future Estimates Data
Date (Data in AUD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2024-06-30
2023-06-30
2022-06-30 3.36 3.49 3.20 3.00
2021-06-30 2.88 2.99 2.76 4.00
2020-06-30 2.41 2.50 2.33 4.00
2019-11-19
ASX:REA Past Financials Data
Date (Data in AUD Millions) EPS *
2019-06-30 0.80
2019-03-31 0.87
2018-12-31 0.94
2018-09-30 1.43
2018-06-30 1.92
2017-12-31 0.39
2017-09-30 0.38
2017-06-30 0.36
2016-12-31 2.03
2016-09-30 1.98

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • REA Group is expected to efficiently use shareholders’ funds in the future (Return on Equity greater than 20%).
X
Future performance checks
We assess REA Group's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the Australia market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the Australia market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
REA Group has a total score of 5/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

REA Past Performance

  How has REA Group performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare REA Group's growth in the last year to its industry (Interactive Media and Services).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • REA Group's year on year earnings growth rate was negative over the past 5 years and the most recent earnings are below average.
  • REA Group's 1-year earnings growth is negative, it can't be compared to the 5-year average.
  • REA Group's 1-year earnings growth is negative, it can't be compared to the Global Interactive Media and Services industry average.
Earnings and Revenue History
REA Group's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from REA Group Company Filings, last reported 4 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

ASX:REA Past Revenue, Cash Flow and Net Income Data
Date (Data in AUD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2019-06-30 941.39 105.00 173.84
2019-03-31 938.65 113.87 171.32
2018-12-31 935.91 122.74 168.80
2018-09-30 901.64 187.76 164.87
2018-06-30 867.38 252.78 160.95
2017-12-31 765.94 51.25 156.46
2017-09-30 718.57 49.45 151.62
2017-06-30 671.21 47.64 146.77
2016-12-31 626.61 268.03 139.86
2016-09-30 602.84 261.22 134.45
2016-06-30 579.06 254.41 129.05
2015-12-31 551.17 198.91 117.41
2015-09-30 537.04 199.59 120.48
2015-06-30 522.92 200.26 123.55
2014-12-31 489.56 195.55 116.95
2014-09-30 463.51 172.64 112.46
2014-06-30 437.46 149.73 107.97
2014-03-31 410.96 139.27 101.81
2013-12-31 384.46 128.82 95.64
2013-09-30 360.46 119.26 91.53
2013-06-30 336.46 109.71 87.42
2013-03-31 320.44 103.41 85.55
2012-12-31 304.42 97.12 83.69

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • REA Group has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • REA Group used its assets less efficiently than the Global Interactive Media and Services industry average last year based on Return on Assets.
  • REA Group has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess REA Group's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Interactive Media and Services industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
REA Group has a total score of 1/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

REA Health

 How is REA Group's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up REA Group's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • REA Group's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
  • REA Group's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of REA Group's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • Low level of unsold assets.
  • Debt is covered by short term assets, assets are 1x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from REA Group Company Filings, last reported 4 months ago.

ASX:REA Past Debt and Equity Data
Date (Data in AUD Millions) Total Equity Total Debt Cash & Short Term Investments
2019-06-30 905.44 310.11 137.90
2019-03-31 905.44 310.11 137.90
2018-12-31 873.90 310.14 59.80
2018-09-30 873.90 310.14 59.80
2018-06-30 940.77 432.38 115.84
2017-12-31 865.31 359.28 198.27
2017-09-30 865.31 359.28 198.27
2017-06-30 804.73 492.95 358.50
2016-12-31 960.86 493.27 166.27
2016-09-30 960.86 493.27 166.27
2016-06-30 715.78 496.25 126.83
2015-12-31 633.00 0.00 108.45
2015-09-30 633.00 0.00 108.45
2015-06-30 558.08 0.00 78.89
2014-12-31 498.03 0.00 41.92
2014-09-30 498.03 0.00 41.92
2014-06-30 408.31 0.00 253.79
2014-03-31 408.31 0.00 253.79
2013-12-31 352.52 0.00 286.26
2013-09-30 352.52 0.00 286.26
2013-06-30 314.87 0.00 257.34
2013-03-31 314.87 0.00 257.34
2012-12-31 275.16 0.00 209.51
  • REA Group's level of debt (34.2%) compared to net worth is satisfactory (less than 40%).
  • Unable to establish if REA Group's debt level has increased without past 5-year debt data.
  • Debt is well covered by operating cash flow (117.4%, greater than 20% of total debt).
  • Interest payments on debt are well covered by earnings (EBIT is 52.3x coverage).
X
Financial health checks
We assess REA Group's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. REA Group has a total score of 4/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

REA Dividends

 What is REA Group's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
1.13%
Current annual income from REA Group dividends. Estimated to be 1.5% next year.
If you bought A$2,000 of REA Group shares you are expected to receive A$23 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • REA Group's pays a lower dividend yield than the bottom 25% of dividend payers in Australia (2.37%).
  • REA Group's dividend is below the markets top 25% of dividend payers in Australia (5.62%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
ASX:REA Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 10 Analyst Estimates (S&P Global) See Below
Global Interactive Media and Services Industry Average Dividend Yield Market Cap Weighted Average of 42 Stocks 0.5%
Australia Market Average Dividend Yield Market Cap Weighted Average of 390 Stocks 4.1%
Australia Minimum Threshold Dividend Yield 10th Percentile 1.5%
Australia Bottom 25% Dividend Yield 25th Percentile 2.4%
Australia Top 25% Dividend Yield 75th Percentile 5.6%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

ASX:REA Future Dividends Estimate Data
Date (Data in A$) Dividend per Share (annual) Avg. No. Analysts
2024-06-30 1.93 1.00
2023-06-30 1.86 2.00
2022-06-30 1.85 8.00
2021-06-30 1.53 10.00
2020-06-30 1.28 10.00
2019-11-19
ASX:REA Past Annualized Dividends Data
Date (Data in A$) Dividend per share (annual) Avg. Yield (%)
2019-08-08 1.180 1.112
2019-02-07 1.170 1.374
2018-08-09 1.090 1.392
2017-08-10 0.910 1.176
2017-02-09 0.855 1.382
2016-08-08 0.815 1.499
2016-02-05 0.765 1.394
2015-08-12 0.700 1.471
2014-08-07 0.570 1.278
2013-08-13 0.415 0.979
2012-08-16 0.330 1.517
2012-02-21 0.285 2.090
2011-08-18 0.320 2.580
2011-02-22 0.200 1.618
2010-08-19 0.160 1.376
2009-08-20 0.100 1.063

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • REA Group is not paying a notable dividend for Australia, therefore no need to check if the payments are stable.
  • REA Group is not paying a notable dividend for Australia, therefore no need to check if the payments are increasing.
Current Payout to shareholders
What portion of REA Group's earnings are paid to the shareholders as a dividend.
  • No need to calculate the sustainability of REA Group's dividends as it is not paying a notable one for Australia.
Future Payout to shareholders
  • Dividends after 3 years are expected to be covered by earnings (1.8x coverage).
X
Income/ dividend checks
We assess REA Group's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 1.5%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can REA Group afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. REA Group has a total score of 1/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

REA Management

 What is the CEO of REA Group's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Owen Wilson
COMPENSATION A$1,792,492
AGE 55
TENURE AS CEO 0.8 years
CEO Bio

Mr. Owen James Wilson, B.Com, ACA, serves as Chief Executive Officer at REA Group Limited since January 7, 2019. Mr. Wilson had been the Chief Financial Officer of REA Group Limited from September 1, 2014 to January 07, 2019. Mr. Wilson has been Director of REA Group Limited since January 07, 2019. He is responsible for all aspects of the Group’s finance portfolio and global investments. Mr. Wilson served as the Managing Director of International Partnerships, Australia and New Zealand Banking Group Ltd. (ANZ). He worked with ANZ for 15 years in strategic roles including Head of Retail Banking Asia. He served as the Chief Financial Officer of Chandler Macleod Group Limited from November 25, 2008 to September 2014 and served as its Company Secretary from April 9, 2009 to September 2014, leading the Finance and Mergers & Acquisition functions. He has a 15 year career with the ANZ Banking Group during which he held various finance roles culminating in the role of Chief Financial Officer of the Institutional Division of ANZ. He managed ANZ's existing banking partnerships in China, Indonesia, Malaysia, Cambodia, Vietnam and Laos and was a responsible for its credit card businesses in Indonesia, the Philippines and Vietnam. He has excellent experience with high end relationship businesses through his work in Institutional Banking and he has managed high volume low margin operations in his previous role. He served as the Chief Operating Officer of Institutional at ANZ. From 1995 to 2002, his career included various finance roles culminating in the Chief Financial Officer position within Institutional. He joined ANZ in 1993 as Manager of Global Balance Sheet and Capital Management following a successful career with KPMG in Melbourne and London. He has been a Non-Executive Director of iProperty Group Limited since January 12, 2015 and Ross Human Directions Ltd. since December 21, 2010. He served as a Director of OCG Consulting Limited until September 5, 2014. He served as a Director of numerous companies in Australia and Asia including ANZ Royal Bank in Cambodia and the listed AmBank Group in Malaysia. He has been an Associate Member of the Institute of Chartered Accountants in Australia since August 8, 1989. Mr. Wilson holds a Bachelor of Commerce degree from Deakin University in January 1986.

CEO Compensation
  • Owen's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.
  • Owen's remuneration is lower than average for companies of similar size in Australia.
Management Team Tenure

Average tenure of the REA Group management team in years:

0.4
Average Tenure
  • The average tenure for the REA Group management team is less than 2 years, this suggests a new team.
Management Team

Owen Wilson

TITLE
CEO & Director
COMPENSATION
A$2M
AGE
55
TENURE
0.8 yrs

Janelle Hopkins

TITLE
Chief Financial Officer
TENURE
0.4 yrs

Tomas Varsavsky

TITLE
Chief Technology & Data Officer
TENURE
0.1 yrs

Sarah Turner

TITLE
General Counsel & Company Secretary
TENURE
4.2 yrs

Natalie Cerny

TITLE
Head of Corporate Affairs & Communications

Melina Cruickshank

TITLE
Chief Marketing & Audience Officer
TENURE
0.9 yrs

Mary Lemonis

TITLE
Chief People Officer
TENURE
1.7 yrs

Joseph Lyons

TITLE
Chief Commercial Officer
TENURE
0.1 yrs

Andrew Rechtman

TITLE
Chief Customer Product Officer
TENURE
0.1 yrs

Val Brown

TITLE
Chief Consumer Product Officer
TENURE
0.1 yrs
Board of Directors Tenure

Average tenure and age of the REA Group board of directors in years:

6.4
Average Tenure
54
Average Age
  • The tenure for the REA Group board of directors is about average.
Board of Directors

Hamish McLennan

TITLE
Chairman
COMPENSATION
A$375K
AGE
53
TENURE
7.6 yrs

Owen Wilson

TITLE
CEO & Director
COMPENSATION
A$2M
AGE
55
TENURE
0.8 yrs

Roger Amos

TITLE
Independent Non-Executive Director
COMPENSATION
A$197K
AGE
71
TENURE
13.3 yrs

Kathleen Conlon

TITLE
Independent Non-Executive Director
COMPENSATION
A$193K
AGE
55
TENURE
12.4 yrs

Richard Freudenstein

TITLE
Non-Executive Director
COMPENSATION
A$180K
AGE
54
TENURE
13 yrs

Tracey Fellows

TITLE
Non-Executive Director
COMPENSATION
A$2M
AGE
54
TENURE
5.3 yrs

Michael Miller

TITLE
Non-Executive Director
AGE
50
TENURE
4 yrs

Nick Dowling

TITLE
Non-Executive Director
COMPENSATION
A$24K
AGE
43
TENURE
1.5 yrs
Who owns this company?
Recent Insider Trading
  • REA Group individual insiders have only sold shares in the past 3 months.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price (A$) Value (A$)
08. Sep 19 Sell Tracey Fellows Individual 05. Sep 19 05. Sep 19 -9,100 A$105.10 A$-956,428
02. Sep 19 Sell Owen Wilson Individual 03. Sep 19 03. Sep 19 -1,000 A$105.68 A$-105,681
12. Aug 19 Sell Pinnacle Investment Management Limited Company 19. Feb 19 08. Aug 19 -1,052,283 A$89.12 A$-93,774,838
12. Aug 19 Buy Pinnacle Investment Management Limited Company 12. Feb 19 09. Aug 19 652,183 A$78.55 A$51,226,185
09. Aug 19 Sell Hyperion Asset Management Limited Company 03. Oct 18 07. Aug 19 -130,063 A$76.81 A$-9,990,775
X
Management checks
We assess REA Group's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. REA Group has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

REA News

Simply Wall St News

Shareholders Are Thrilled That The REA Group (ASX:REA) Share Price Increased 120%

For instance, the price of REA Group Limited (ASX:REA) stock is up an impressive 120% over the last five years. … REA Group's earnings per share are down 6.9% per year, despite strong share price performance over five years. … We note that for REA Group the TSR over the last 5 years was 136%, which is better than the share price return mentioned above.

Simply Wall St -

What Type Of Shareholder Owns REA Group Limited's (ASX:REA)?

We also tend to see lower insider ownership in companies that were previously publicly owned. … View our latest analysis for REA Group ASX:REA Ownership Summary, August 9th 2019 What Does The Institutional Ownership Tell Us About REA Group? … Public Company Ownership Public companies currently own 62% of REA stock.

Simply Wall St -

Here's What REA Group Limited's (ASX:REA) ROCE Can Tell Us

Analysts use this formula to calculate return on capital employed: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) Or for REA Group: 0.41 = AU$462m ÷ (AU$1.5b - AU$389m) (Based on the trailing twelve months to December 2018.) Therefore, REA Group has an ROCE of 41%. … Due to the way ROCE is calculated, a high level of current liabilities makes a company look as though it has less capital employed, and thus can (sometimes unfairly) boost the ROCE. … Our Take On REA Group's ROCE This is good to see, and with such a high ROCE, REA Group may be worth a closer look.

Simply Wall St -

REA Group (ASX:REA) Seems To Use Debt Rather Sparingly

Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. … ASX:REA Historical Debt, July 5th 2019 A Look At REA Group's Liabilities According to the last reported balance sheet, REA Group had liabilities of AU$389.5m due within 12 months, and liabilities of AU$240.7m due beyond 12 months. … Either way, since REA Group does have more debt than cash, it's worth keeping an eye on its balance sheet.

Simply Wall St -

Is REA Group Limited's (ASX:REA) ROE Of 14% Impressive?

The formula for return on equity is: Return on Equity = Net Profit ÷ Shareholders' Equity Or for REA Group: 14% = AU$123m ÷ AU$874m (Based on the trailing twelve months to December 2018.) Most readers would understand what net profit is, but it’s worth explaining the concept of shareholders’ equity. … Does REA Group Have A Good Return On Equity? … Combining REA Group's Debt And Its 14% Return On Equity While REA Group does have some debt, with debt to equity of just 0.35, we wouldn't say debt is excessive.

Simply Wall St -

Does This Valuation Of REA Group Limited (ASX:REA) Imply Investors Are Overpaying?

In this article we are going to estimate the intrinsic value of REA Group Limited (ASX:REA) by taking the foreast future cash flows of the company and discounting them back to today's value. … Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate: 10-year free cash flow (FCF) estimate 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Levered FCF (A$, Millions) A$270.67 A$356.67 A$400.50 A$493.00 A$560.00 A$613.80 A$659.34 A$698.15 A$731.76 A$761.50 Growth Rate Estimate Source Analyst x3 Analyst x3 Analyst x2 Analyst x1 Analyst x1 Est @ 9.61% Est @ 7.42% Est @ 5.89% Est @ 4.81% Est @ 4.06% Present Value (A$, Millions) Discounted @ 8.42% A$249.65 A$303.44 A$314.28 A$356.83 A$373.86 A$377.97 A$374.49 A$365.76 A$353.60 A$339.41 Present Value of 10-year Cash Flow (PVCF)= A$3.41b "Est" = FCF growth rate estimated by Simply Wall St We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. … ASX:REA Intrinsic value, May 28th 2019 The assumptions Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows.

Simply Wall St -

What Kind Of Shareholder Appears On The REA Group Limited's (ASX:REA) Shareholder Register?

View our latest analysis for REA Group ASX:REA Ownership Summary, May 9th 2019 What Does The Institutional Ownership Tell Us About REA Group? … We can see that REA Group does have institutional investors; and they hold 18% of the stock. … Insider Ownership Of REA Group While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders.

Simply Wall St -

How Many REA Group Limited (ASX:REA) Shares Have Insiders Sold, In The Last Year?

So shareholders might well want to know whether insiders have been buying or selling shares in REA Group Limited (ASX:REA). … But logic dictates you should pay some attention to whether insiders are buying or selling shares. … Over the last year, we can see that the biggest insider sale was by the Director, Tracey Fellows, for AU$911k worth of shares, at about AU$89.31 per share.

Simply Wall St -

Can We See Significant Institutional Ownership On The REA Group Limited (ASX:REA) Share Register?

If you want to know who really controls REA Group Limited (ASX:REA), then you'll have to look at the makeup of its share registry. … REA Group is a pretty big company. … Our analysis of the ownership of the company, below, shows that.

Simply Wall St -

Why We Like REA Group Limited’s (ASX:REA) 41% Return On Capital Employed

Specifically, we're going to calculate its Return On Capital Employed (ROCE), in the hopes of getting some insight into the business. … Understanding Return On Capital Employed (ROCE). … Analysts use this formula to calculate return on capital employed:

Simply Wall St -

REA Company Info

Description

REA Group Limited engages in online property advertising business in Australia, Asia, and North America. The company advertises property and property-related services on Websites and mobile apps. It operates residential, commercial, share, and co-working property sites, such as realestate.com.au, realcommercial.com.au, Flatmates.com.au, spacely.com.au, iproperty.com.my, rumah123.com, squarefoot.com.hk, ThinkgOfLiving.com, iproperty.com.sg, myfun.com, realtor.com, housing.com, makaan.com, PropTiger.com, move.com, and realtor.com, as well as hometrack.com.au, 1form.com, and smartexpos.com. The company was formerly known as realestate.com.au Ltd. and changed its name to REA Group Limited in December 2008. REA Group Limited was founded in 1995 and is headquartered in Richmond, Australia. REA Group Limited is a subsidiary of News Corp.

Details
Name: REA Group Limited
REA
Exchange: ASX
Founded: 1995
A$13,745,745,987
131,714,699
Website: http://www.rea-group.com
Address: REA Group Limited
511 Church Street,
Richmond,
Victoria, 3121,
Australia
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
ASX REA Ordinary Shares Australian Securities Exchange AU AUD 01. Dec 1999
OTCPK RPGR.F Ordinary Shares Pink Sheets LLC US USD 01. Dec 1999
DB R9C Ordinary Shares Deutsche Boerse AG DE EUR 01. Dec 1999
CHIA REA Ordinary Shares Chi-X Australia AU AUD 01. Dec 1999
OTCPK RPGR.Y UNSPONSORD ADR Pink Sheets LLC US USD 03. Oct 2014
Number of employees
Current staff
Staff numbers
1,642
REA Group employees.
Industry
Interactive Media and Services
Media
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/11/19 10:31
End of day share price update: 2019/11/19 00:00
Last estimates confirmation: 2019/11/10
Last earnings filing: 2019/08/08
Last earnings reported: 2019/06/30
Last annual earnings reported: 2019/06/30


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.