NatWest Group PLC
🇬🇧 NWG.LSE · London · GB00BM8PJY71
Bank
GBX 575.40 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
8.0
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 575.40 ÷ 71.76 = 8.0
TTM period through: 2025-12-31
Forward P/E (estimated): 7.0
Based on analyst estimates
Reference: Provider P/E (Trailing): 8.6
Yield (Fwd)
5.74%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 5.57%
Net Debt/EBITDA (TTM)
-1.5x
Latest quarter: -7.0x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2025-12-31): -7.0x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
46.0%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 40.8%
FCF Coverage (TTM): -7.30x
ROE
14.2%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
Summary
NatWest Group is a systemically important UK retail and commercial bank providing essential financial services with robust underlying profitability. The company boasts strong fundamentals, including a 14.2% Return on Equity and a sustainable 48% payout ratio, despite recent broader market volatility driven by geopolitical tensions. Trading at an attractive P/E of 8 with a 5.6% yield, this represents a compelling entry point for dividend investors seeking quality financial exposure.
Sector Context
NatWest Group operates as a major commercial and retail bank, making money primarily through the net interest margin between customer deposits and loans, alongside fee-based financial services. In the banking sector, high debt-to-equity ratios are a standard function of leveraging deposits, and negative free cash flow often reflects robust loan origination rather than fundamental distress.
Temporary Opportunity Identified
Macroeconomic uncertainty and market flight-to-cash due to escalating geopolitical tensions in the Middle East and delayed rate cut expectations are temporarily depressing valuation multiples.
📊 Strategy Analysis
- • P/E ratio of 8.0 represents an attractive valuation, falling at the lower end of our ideal 8-15x range.
- • High profitability with a Return on Equity (ROE) of 14.2%, comfortably above the 10% banking benchmark for high-quality operations.
- • Strong 5.6% dividend yield is securely covered by a conservative 48% payout ratio.
- • Geopolitical tensions and broader inflation fears have created a temporary macro-driven discount, presenting an appealing entry point.
⚠ What to Watch
- • Net margins have contracted to 19.5% compared to the 5-year average of 28.2%, reflecting shifting interest rate dynamics and macro pressures.
- • Banks are highly sensitive to cyclical economic shocks, as evidenced by historical loss years during broader market crises.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-05
Disclaimer: This information is for educational purposes only. Not financial advice.