Zee Entertainment Enterprises Analysis

dividend

Pros

• Dividends per share have increased over the past 10 years.
• Dividends paid are well covered by earnings (4.7x coverage).
• Dividends after 3 years are expected to be well covered by earnings (5.3x coverage).
• Zee Entertainment Enterprises's pays a higher dividend yield than the bottom 25% of dividend payers in India (0.76%).

Cons

• Dividends per share have been volatile in the past 10 years (annual drop of over 20%).
• Zee Entertainment Enterprises's dividend is below the markets top 25% of dividend payers in India (3.08%).

future

Pros

• Zee Entertainment Enterprises is expected to become cash flow positive in 2 years.
• Zee Entertainment Enterprises's earnings growth is expected to exceed the low risk savings rate of 7.2%.
• Performance (ROE) is expected to be above the current IN Media industry average.
• Zee Entertainment Enterprises's revenue growth is expected to exceed the India market average.

Cons

• Zee Entertainment Enterprises's earnings are expected to grow by 7.4% yearly, however this is not considered high growth (20% yearly).
• Zee Entertainment Enterprises's earnings growth is positive but not above the India market average.
• Zee Entertainment Enterprises's earnings are expected to decrease over the next year.
• Zee Entertainment Enterprises's net income is expected to increase but not above the 50% threshold in 2 years time.
• Zee Entertainment Enterprises is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
• A decline in Zee Entertainment Enterprises's performance (ROE) is expected over the next 3 years.
• Zee Entertainment Enterprises's revenue is expected to increase but not above the 50% threshold in 2 years time.
• Zee Entertainment Enterprises's revenue is expected to grow by 8.3% yearly, however this is not considered high growth (20% yearly).

health

Pros

• Zee Entertainment Enterprises is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
• Zee Entertainment Enterprises is profitable, therefore cash runway is not a concern.
• Zee Entertainment Enterprises is profitable, therefore cash runway is not a concern.
• Debt is covered by short term assets, assets are 10.1x debt.
• Zee Entertainment Enterprises's cash and other short term assets cover its long term commitments.
• Interest payments on debt are well covered by earnings (EBIT is 34.7x coverage).
• Zee Entertainment Enterprises's level of debt (11.5%) compared to net worth is satisfactory (less than 40%).

Cons

• Operating cash flow is negative therefore debt is not well covered.
• The level of debt compared to net worth has increased over the past 5 years (0% vs 11.5% today).
• High level of physical assets or inventory.

management

Pros

• Punit's compensation has been consistent with company performance over the past year, both up more than 20%.
• The tenure for the Zee Entertainment Enterprises management team is about average.

Cons

• The average tenure for the Zee Entertainment Enterprises board of directors is less than 3 years, this suggests a new board.
• Punit's remuneration is higher than average for companies of similar size in India.

misc

Pros

Cons

• Zee Entertainment Enterprises has significant price volatility in the past 3 months.

past

Pros

• Zee Entertainment Enterprises's year on year earnings growth rate has been positive over the past 5 years.
• Zee Entertainment Enterprises used its assets more efficiently than the IN Media industry average last year based on Return on Assets.

Cons

• Zee Entertainment Enterprises's 1-year earnings growth is less than its 5-year average (5.2% vs 14.8%)
• Zee Entertainment Enterprises's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
• Zee Entertainment Enterprises has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
• Zee Entertainment Enterprises's earnings growth has not exceeded the IN Media industry average in the past year (5.2% vs 5.9%).

value

Pros

• Zee Entertainment Enterprises is good value based on earnings compared to the IN Media industry average.
• Zee Entertainment Enterprises is good value based on earnings compared to the India market.

Cons

• Zee Entertainment Enterprises's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).
• Zee Entertainment Enterprises's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).
• Zee Entertainment Enterprises is overvalued based on assets compared to the IN Media industry average.
• Zee Entertainment Enterprises is poor value based on expected growth next year.
• ZEEL underperformed the Media industry which returned -34.8% over the past year.
• ZEEL underperformed the Market in India which returned -14.5% over the past year.
• NSEI:ZEEL is flat (-0.2%) underperforming the Media industry which returned 10.1% over the past month.
• NSEI:ZEEL is flat (-0.2%) underperforming the market in India which returned 8% over the past month.