Relx Plc (NYSE: RELX)

Sector: Industrials Industry: Specialty Business Services CIK: 0000929869
Market Cap 56.19 Bn
P/B 17.58
P/E 20.01
P/S 4.34
ROIC (Qtr) 0.00
Div Yield % 2.69
Rev 1y % (Qtr) 0.00
Total Debt (Qtr) 9.82 Bn
Debt/Equity (Qtr) 3.07
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About

RELX PLC, a global giant known by its ticker symbol RELX, operates in the information-based analytics and decision tools sector, specifically catering to professional and business customers. The company boasts a presence in over 180 countries, employing more than 36,000 people in approximately 40 countries. RELX's operations are divided into four major market segments: Risk, Scientific, Technical & Medical, Legal, and Exhibitions. The Risk segment offers customers advanced technology and algorithms, combined with public and industry-specific content,...

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Investment thesis

Bull case

  • Operating cash flow of 3.83B provides exceptional 218.15x coverage of minority interest expenses 17.57M, showing strong core operations.
  • Robust free cash flow of 3.12B exceeds capital expenditure of 709.46M by 4.40x, indicating strong organic growth funding capability.
  • Cash position of 177.03M provides exceptional 10.08x coverage of minority interest expenses 17.57M, indicating strong liquidity.
  • Tangible assets of 5.07B provide robust 24.54x coverage of other current liabilities 206.76M, indicating strong asset backing.
  • Operating cash flow of 3.83B fully covers other non-current liabilities 916.22M by 4.18x, showing strong long-term stability.

Bear case

  • Operating cash flow of 3.83B barely covers its investment activities of (1.04B), with a coverage ratio of -3.68, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 3.83B provides thin coverage of dividend payments of (1.60B) with a -2.40 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 177.03M provide limited coverage of acquisition spending of (328.38M), which is -0.54x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 3.34B relative to inventory of 420.27M (7.96 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Long-term investments of 398.65M represent a high 1.86x of fixed assets 214.86M, indicating potential overexposure to financial assets versus operational capabilities.

Segments [axis] Breakdown of Revenue (2023)

Segments [axis] Breakdown of Revenue (2023)

Peer comparison

Companies in the Specialty Business Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CTAS Cintas Corp 120.08 Bn 556.91 33.85 3.24 Bn
2 RELX Relx Plc 56.19 Bn 20.01 4.34 9.82 Bn
3 TRI Thomson Reuters Corp /Can/ 37.42 Bn 24.91 5.00 2.44 Bn
4 CPRT Copart Inc 36.25 Bn 22.74 7.79 0.10 Bn
5 RBA Rb Global Inc. 19.20 Bn 49.09 4.24 4.21 Bn
6 ULS UL Solutions Inc. 14.12 Bn 43.32 4.92 0.74 Bn
7 GPN Global Payments Inc 11.52 Bn 284.78 8.66 16.20 Bn
8 ARMK Aramark 10.37 Bn 32.72 0.55 6.57 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 4.79 2.48
EV to Cash from Ops. EV/CFO 24.94 30.22
EV to Debt EV to Debt 9.73 31.08
EV to EBIT EV/EBIT 23.21 94.66
EV to EBITDA EV/EBITDA 27.14 18.37
EV to Free Cash Flow [EV/FCF] EV/FCF 30.61 -20.73
EV to Market Cap EV to Market Cap 1.70 178.66
EV to Revenue EV/Rev 7.38 8.12
Price to Book Value [P/B] P/B 17.58 5.37
Price to Earnings [P/E] P/E 20.01 65.19
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 2.38 -15,800.59
Dividend Payout Ratio % Dividend Payout Ratio % 54.00 10.14
Dividend per Basic Share Div per Share (Qtr) 0.82 0.35
FCF Dividend Payout Ratio % FCF Dividend Payout Ratio % 65.13 7.65
Interest Coverage Interest Coverage 10.23 30.46
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex Growth (1y) % -17.27 -178.22
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 19.01 155.14
Dividend Growth (1y) % Dividend Growth (1y) % 8.02 5.38
EBIAT Growth (1y) % EBIAT Growth (1y) % 14.47 -34.92
EBITDA Growth (1y) % EBITDA Growth (1y) % 0.00 -86.28
EBIT Growth (1y) % EBIT Growth (1y) % 15.17 -22.62
EBT Growth (1y) % EBT Growth (1y) % 16.27 -287.35
EPS Growth (1y) % EPS Growth (1y) % 17.50 -118.47
FCF Growth (1y) % FCF Growth (1y) % 17.63 -146.43
Gross Profit Growth (1y) % Gross Profit Growth (1y) % 12.04 2.63
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Utilization Ratio 0.88 0.84
Cash Payout Ratio Cash Payout Ratio 0.35 -0.03
Cash Ratio Cash Ratio (Qtr) 0.02 1.15
Current Ratio Curr Ratio (Qtr) 0.49 4.12
Debt to Equity Ratio Debt/Equity (Qtr) 3.07 0.92
Interest Cover Ratio Interest Cover Ratio 10.23 30.46
Times Interest Earned Times Interest Earned 10.23 30.46
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % 0.00 -33.89
EBIT Margin % EBIT Margin % 23.52 -43.32
EBT Margin % EBT Margin % 28.68 -44.88
Gross Margin % Gross Margin % 66.30 39.81
Net Profit Margin % Net Profit Margin % 21.70 -41.60