SWK Holdings Corp (NASDAQ: SWKH)

Sector: Financial Services Industry: Asset Management CIK: 0001089907
Market Cap 210.04 Mn
P/B 0.83
P/E 9.24
P/S 4.65
ROIC (Qtr) 4.99
Div Yield % 23.27
Rev 1y % (Qtr) 4.45
Total Debt (Qtr) 31.92 Mn
Debt/Equity (Qtr) 0.13
Add ratio to table...

About

Investment thesis

Bull case

  • Strong operating cash flow of 23.88M provides robust 0.75x coverage of total debt 31.92M, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 289.36M provides 9.06x coverage of total debt 31.92M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 23.88M provides strong 21.13x coverage of stock compensation 1.13M, indicating sustainable incentive practices.
  • Robust free cash flow of 23.39M exceeds capital expenditure of 490000 by 47.73x, indicating strong organic growth funding capability.
  • Strong operating cash flow of 23.88M provides 1.94x coverage of SG&A expenses 12.29M, showing efficient operational cost management.

Bear case

  • Operating cash flow of 23.88M provides thin coverage of dividend payments of (49.08M) with a -0.49 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 23.39M represents just -570.39x of debt issuance (41000), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Operating cash flow of 23.88M is outpaced by equity issuance of (3.92M) (-6.10 ratio), indicating concerning reliance on equity markets for funding operations.
  • Cash position of 10.21M provides only 2.20x coverage of interest expenses of 4.63M, indicating potential refinancing risks in a rising rate environment.
  • Other operating expenses of 13.55M consume 0.57x of operating cash flow 23.88M, indicating potential cost control issues affecting cash generation.

Peer comparison

Companies in the Asset Management
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 BLK BlackRock, Inc. 199.59 Bn 85.40 21.98 15.04 Bn
2 BN BROOKFIELD Corp /ON/ 103.94 Bn 31.52 5.64 262.97 Bn
3 AMP Ameriprise Financial Inc 88.69 Bn 55.02 7.20 5.89 Bn
4 BX Blackstone Inc. 88.51 Bn 49.39 10.93 12.89 Bn
5 KKR KKR & Co. Inc. 55.86 Bn 28.33 13.23 53.12 Bn
6 STT State Street Corp 46.52 Bn 21.77 3.91 34.72 Bn
7 NTRS Northern Trust Corp 34.14 Bn 33.31 6.71 15.64 Bn
8 RJF Raymond James Financial Inc 32.89 Bn 37.63 4.14 5.10 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.81 0.94
EV to Cash from Ops. EV/CFO 9.80 41.10
EV to Debt EV to Debt 7.33 15.28
EV to EBIT EV/EBIT 6.82 23.47
EV to EBITDA EV/EBITDA 13.26 47.80
EV to Free Cash Flow [EV/FCF] EV/FCF 10.01 38.62
EV to Market Cap EV to Market Cap 1.11 7.81
EV to Revenue EV/Rev 5.19 27.38
Price to Book Value [P/B] P/B 0.83 2.34
Price to Earnings [P/E] P/E 9.24 11.81
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.46 4.66
Dividend Payout Ratio % Div Payout % (Qtr) 215.10 -5.56
Dividend per Basic Share Div per Share (Qtr) 4.00 1.73
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 207.25 49.83
Interest Coverage Int. cover (Qtr) 7.40 25.16
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -98.38 -35.10
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -40.59 15.43
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.65
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 73.68 -90.82
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 32.70 35.24
EBIT Growth (1y) % EBIT 1y % (Qtr) 128.05 -22.13
EBT Growth (1y) % EBT 1y % (Qtr) 185.28 -163.05
EPS Growth (1y) % EPS 1y % (Qtr) 118.82 -20.61
FCF Growth (1y) % FCF 1y % (Qtr) 8.20 220.21
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 6.15 -53.96
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.16 0.22
Cash Payout Ratio Cash Payout (Qtr) 2.01 0.36
Cash Ratio Cash Ratio (Qtr) 3.55 0.38
Current Ratio Curr Ratio (Qtr) 5.68 0.86
Debt to Equity Ratio Debt/Equity (Qtr) 0.13 0.70
Interest Cover Ratio Int Coverage (Qtr) 7.40 25.16
Times Interest Earned Times Interest Earned (Qtr) 7.40 25.16
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 77.10 -114.76
EBIT Margin % EBIT Margin % (Qtr) 76.00 -127.24
EBT Margin % EBT Margin % (Qtr) 65.73 -150.97
Gross Margin % Gross Margin % (Qtr) 100.00 67.88
Net Profit Margin % Net Margin % (Qtr) 50.40 -148.68