PZU’s share price

PZU IPOed on the Warsaw Stock Exchange (WSE) on 12 May 2010. Since its floatation it has been included in its most important index, WIG20 (calculated on the basis of the portfolio value of the 20 largest and most liquid companies on WSE’s main market)¹. PZU also belongs to the following Polish indices: WIG, WIG30, WIG-Poland, WIGdiv, WIG20TR, WIG.MS-FIN, CEEplus and WIG ESG (sustainable development index) and the following international indices: MSCI Poland (emerging markets), Stoxx Europe 600 (developed markets) and FTSE Russel mid cap index (developed markets).

Warsaw Stock Exchange indices

In 2019, the Polish blue chip index (WIG20) oscillated in the range between 2,047 and 2,414 points (vs. between 2,083 and 2,630 points in 2018), ending the year’s last session at 2,150 points (down 5.6% y/y and down 2.6% when adjusted for dividends). The sWIG small cap index behaved much better in this year with upward movement of 13.9% y/y.

PZU’s share price

In 2019, PZU’s shares remained among the most liquid companies traded on the WSE. With a market capitalization of over PLN 34.6 billion at the end of 2019, PZU ranked as the third largest company by market cap on the Warsaw Stock Exchange. PZU’s share in WSE’s total trading volume was 8.7% (4th place).
PZU’s maximum share price (not adjusted for dividends) in 2019 was PLN 45.39 (at closing prices) and its minimum price was PLN 35.79. In 2018, these prices were PLN 47.34 and PLN 36.31, respectively.

PZU’s min/max share price at session closing from May 2010 to 2019

Source: www.infostrefa.com, www.msci.com

The share price at the last trading session in 2019 was PLN 40.03, down 8.8% y/y. After adjusting the share price for the dividend according to the methodology used by the stooq service (http://stooq.pl/pomoc/?q=9&s=pzu), movement in PZU’s share price in 2019 was -2.0% versus WIG20 index down by 5.6%, WIG20TR² down by 2.6% and WIG Banks down by 9.2%.

PZU’s share price adjusted for dividends paid from May 2010 to 2019

Source: www.stooq.pl

PZU’s share price (unadjusted for dividends) in 2019 peaked on 25 January at PLN 45.39. During the first three quarters PZU’s share price underperformed the main local benchmark indices of WIG and WIG20. In turn, in Q4 PZU’s share price shot up 7.1%, outperforming the WIG index’s (up 0.3%), WIG20 (down 1.1%) and WIG Banks Index (down 5.2%). The WIG overall market index ended the year slightly up by recording growth of 0.3%.

PZU stock price versus WIG and WIG20

Source: www.gpwinfostrefa.pl

In 2019, PZU’s shares were highly liquid. The average daily spread of PZU’s stocks was only 7 bps compared to the average spread of 13 bps for the 20 most liquid companies. PZU’s stock turnover exceeded PLN 16.6 billion and accounted for 8.7% of the total market’s turnover.. The average daily trading volume of PZU’s stock in 2019 was 1.6 million shares. The largest daily volume (6.0 million shares) was recorded on a rising (+0.9%) trading session held on 15 March 2019, i.e. two days after PZU’s 2018 financial results were published.

Factors impacting PZU’s stock price in 2019

Source: www.gpwinfostrefa.pl

Volatility

Compared to the broad WIG market, PZU’s systematic risk expressed by the beta coefficient (PZU share price versus the WIG index for daily changes) in 2019 was 0.86 (1.23 in 2018). The decline in beta was linked to the relatively soft performance of large cap companies (including PZU) compared to the overall market.

The annualized standard deviation for daily changes in the PZU share price declined by 7.1 percentage points to 20.0%. These values for WIG and WIG20 fell by 2.6 p.p. and 1.7 p.p. to 12.6% and 17.0%, respectively. The value of shares traded for the overall WIG index contracted 6.8% y/y to PLN 190 billion.

PZU’s total shareholder return (TSR) calculated as the change in the share price plus the distributed dividend was -2.4% at the end of 2019. TSR in 2015-2019 was 18.7%. At the end of 2019 the WIG20TR index recorded a loss of 2.6% y/y.

Source: www.gpwinfostrefa.pl

Ratios

As at the end of 2019, PZU’s shares had a high P/BV ratio of 2,1, i.e. twice the average for European insurance companies, which the analysts perceive as attributable to its high ROE (in 2019, it was 21,2%).

PZU’s valuation versus its peer group (P/BV and ROE) 2019

Source: PZU (2017,2018,2019) – reported data; other companies - 2019 annual forecasts (Bloomberg); share prices at year end 2019

¹ WIG20 is a price index, i.e. it is calculated by using only the prices of the transactions related to it, without incorporating dividend income
² WIG20TR is the WIG20 adjusted for dividends