Next PLC
🇬🇧 NXT.LSE · London · GB0032089863
Consumer
GBX 12950.00 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
17.4
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: 12950.00 ÷ 745.40 = 17.4
TTM period through: 2026-01-31
Forward P/E (estimated): 15.1
Based on analyst estimates
Reference: Provider P/E (Trailing): 17.4
Yield (Fwd)
2.07%
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): 2.07%
Net Debt/EBITDA (TTM)
1.3x
Latest quarter: 2.4x
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: 2026-01-31
Latest quarter (2026-01-31): 2.4x
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)
36.0%
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): 32.5%
Cash Flow Payout (TTM): 25.3%
FCF Coverage (TTM): 3.48x
ROE
50.8%
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.
EV/EBITDA
10.2x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
Next PLC is a highly profitable and well-managed UK clothing and home retailer with a solid balance sheet and excellent return on equity. However, as a discretionary fashion retailer with a low 2.07% yield, it represents a structural mismatch for our conservative dividend strategy. Not recommended for new positions, as better opportunities exist in stable, essential service sectors offering higher, more predictable yields.
Sector Context
Next PLC is a prominent UK-based retailer offering clothing, footwear, accessories, and home products. While the company boasts a strong brand and high profitability, fashion and consumer discretionary retail are fundamentally cyclical and susceptible to changing consumer trends. This lacks the highly predictable, essential-service cash flows required for conservative dividend investing.
📊 Strategy Analysis
- • Demonstrates excellent operational efficiency with a Return on Equity (ROE) of 50.81% and an EBIT margin of 19.28%
- • Maintains a strong balance sheet with a conservative Net Debt/EBITDA ratio of 1.34x, well below the 3x maximum threshold
- • Current dividend is exceptionally well-covered by free cash flow, with a cash flow payout ratio of just 25.32%
⚠ What to Watch
- • Operates in the discretionary fashion retail sector, which is explicitly excluded from the strategy due to high cyclicality and fickle consumer trends
- • The current dividend yield of 2.07% falls significantly below the strategy's minimum 3% threshold requirement
- • Valuation is somewhat elevated with a P/E (TTM) of 17.37x, exceeding the ideal 8-15x range and offering limited margin of safety
📊 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.