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Johnson Matthey (LSE:JMAT) Forward Rate of Return (Yacktman) % : -1.86% (As of Mar. 2024)


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What is Johnson Matthey Forward Rate of Return (Yacktman) %?

Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. Johnson Matthey's forward rate of return for was -1.86%.

The historical rank and industry rank for Johnson Matthey's Forward Rate of Return (Yacktman) % or its related term are showing as below:

LSE:JMAT' s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: -2.05   Med: 5.93   Max: 14.37
Current: -0.39

During the past 13 years, Johnson Matthey's highest Forward Rate of Return was 14.37. The lowest was -2.05. And the median was 5.93.

LSE:JMAT's Forward Rate of Return (Yacktman) % is ranked worse than
68.6% of 1156 companies
in the Chemicals industry
Industry Median: 8.035 vs LSE:JMAT: -0.39

Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past seven years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.


Johnson Matthey Forward Rate of Return (Yacktman) % Historical Data

The historical data trend for Johnson Matthey's Forward Rate of Return (Yacktman) % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Johnson Matthey Forward Rate of Return (Yacktman) % Chart

Johnson Matthey Annual Data
Trend Mar15 Mar16 Mar17 Mar18 Mar19 Mar20 Mar21 Mar22 Mar23 Mar24
Forward Rate of Return (Yacktman) %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 6.08 3.12 -0.88 -0.29 -1.86

Johnson Matthey Semi-Annual Data
Mar15 Sep15 Mar16 Sep16 Mar17 Sep17 Mar18 Sep18 Mar19 Sep19 Mar20 Sep20 Mar21 Sep21 Mar22 Sep22 Mar23 Sep23 Mar24 Sep24
Forward Rate of Return (Yacktman) % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only - -0.29 - -1.86 -

Competitive Comparison of Johnson Matthey's Forward Rate of Return (Yacktman) %

For the Specialty Chemicals subindustry, Johnson Matthey's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Johnson Matthey's Forward Rate of Return (Yacktman) % Distribution in the Chemicals Industry

For the Chemicals industry and Basic Materials sector, Johnson Matthey's Forward Rate of Return (Yacktman) % distribution charts can be found below:

* The bar in red indicates where Johnson Matthey's Forward Rate of Return (Yacktman) % falls into.



Johnson Matthey Forward Rate of Return (Yacktman) % Calculation

Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

Johnson Matthey's Forward Rate of Return of Mar. 2024 is

Forward Rate of Return=Normalized Free Cash Flow/Price+5-Year EBITDA Growth Rate
=0.8095/17.89+-0.0638
=-1.86 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Johnson Matthey  (LSE:JMAT) Forward Rate of Return (Yacktman) % Explanation

Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.


Be Aware

In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.


Johnson Matthey Forward Rate of Return (Yacktman) % Related Terms

Thank you for viewing the detailed overview of Johnson Matthey's Forward Rate of Return (Yacktman) % provided by GuruFocus.com. Please click on the following links to see related term pages.


Johnson Matthey Business Description

Industry
Traded in Other Exchanges
Address
25 Farringdon Street, 5th Floor, London, GBR, EC4A 4AB
Johnson Matthey PLC is engaged in the production of emissions catalysts for automobiles and trucks. The company also manufactures industrial catalysts for the chemicals and oil and gas sectors and a variety of other industrial products derived from platinum-group metals. Its segments include Clean Air, PGM Services, Catalyst Technologies, Hydrogen Technologies, and Value Businesses. The company generates maximum revenue from the PGM Services segment. Geographically, the company derives key revenue from the United Kingdom and the rest from the United States of America, Germany, China, and other countries.

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