WENDY'S CO/THE (WEN) Stock Fundamental Analysis
NASDAQ:WEN - Nasdaq - US95058W1009 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to WEN. WEN was compared to 134 industry peers in the Hotels, Restaurants & Leisure industry. While WEN has a great profitability rating, there are quite some concerns on its financial health. WEN is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year WEN was profitable.
WEN had a positive operating cash flow in the past year.
WEN had positive earnings in each of the past 5 years.
In the past 5 years WEN always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 3.89%, WEN is doing good in the industry, outperforming 61.65% of the companies in the same industry.
Looking at the Return On Equity, with a value of 147.11%, WEN belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
WEN has a Return On Invested Capital (6.04%) which is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for WEN is significantly below the industry average of 13.81%.
The 3 year average ROIC (5.43%) for WEN is below the current ROIC(6.04%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.89% | ||
| ROE | 147.11% | ||
| ROIC | 6.04% |
ROA(3y)3.68%
ROA(5y)3.46%
ROE(3y)59.67%
ROE(5y)49.27%
ROIC(3y)5.43%
ROIC(5y)5.17%
1.3 Margins
WEN has a Profit Margin of 8.57%. This is in the better half of the industry: WEN outperforms 68.42% of its industry peers.
In the last couple of years the Profit Margin of WEN has grown nicely.
WEN's Operating Margin of 16.79% is fine compared to the rest of the industry. WEN outperforms 72.93% of its industry peers.
WEN's Operating Margin has been stable in the last couple of years.
With a decent Gross Margin value of 63.24%, WEN is doing good in the industry, outperforming 76.69% of the companies in the same industry.
In the last couple of years the Gross Margin of WEN has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.79% | ||
| PM (TTM) | 8.57% | ||
| GM | 63.24% |
OM growth 3Y-1.47%
OM growth 5Y0.74%
PM growth 3Y-6.44%
PM growth 5Y1.55%
GM growth 3Y-1.04%
GM growth 5Y0.27%
2. Health
2.1 Basic Checks
WEN has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for WEN has been reduced compared to 1 year ago.
The number of shares outstanding for WEN has been reduced compared to 5 years ago.
WEN has a worse debt/assets ratio than last year.
2.2 Solvency
WEN has an Altman-Z score of 1.15. This is a bad value and indicates that WEN is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.15, WEN is doing worse than 62.41% of the companies in the same industry.
The Debt to FCF ratio of WEN is 13.58, which is on the high side as it means it would take WEN, 13.58 years of fcf income to pay off all of its debts.
WEN has a Debt to FCF ratio (13.58) which is in line with its industry peers.
WEN has a Debt/Equity ratio of 24.88. This is a high value indicating a heavy dependency on external financing.
WEN has a Debt to Equity ratio of 24.88. This is in the lower half of the industry: WEN underperforms 69.17% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 24.88 | ||
| Debt/FCF | 13.58 | ||
| Altman-Z | 1.15 |
ROIC/WACC0.79
WACC7.61%
2.3 Liquidity
WEN has a Current Ratio of 1.49. This is a normal value and indicates that WEN is financially healthy and should not expect problems in meeting its short term obligations.
WEN's Current ratio of 1.49 is fine compared to the rest of the industry. WEN outperforms 74.44% of its industry peers.
WEN has a Quick Ratio of 1.47. This is a normal value and indicates that WEN is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Quick ratio value of 1.47, WEN is doing good in the industry, outperforming 76.69% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.49 | ||
| Quick Ratio | 1.47 |
3. Growth
3.1 Past
The earnings per share for WEN have decreased by -2.02% in the last year.
WEN shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.13% yearly.
WEN shows a small growth in Revenue. In the last year, the Revenue has grown by 2.18%.
Measured over the past years, WEN shows a small growth in Revenue. The Revenue has been growing by 5.62% on average per year.
EPS 1Y (TTM)-2.02%
EPS 3Y6.84%
EPS 5Y11.13%
EPS Q2Q%-13.04%
Revenue 1Y (TTM)2.18%
Revenue growth 3Y5.8%
Revenue growth 5Y5.62%
Sales Q2Q%-2.11%
3.2 Future
WEN is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.70% yearly.
Based on estimates for the next years, WEN will show a small growth in Revenue. The Revenue will grow by 3.11% on average per year.
EPS Next Y-3.51%
EPS Next 2Y3.15%
EPS Next 3Y4.6%
EPS Next 5Y7.7%
Revenue Next Year-1.2%
Revenue Next 2Y1.3%
Revenue Next 3Y1.86%
Revenue Next 5Y3.11%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
WEN is valuated correctly with a Price/Earnings ratio of 12.04.
Compared to the rest of the industry, the Price/Earnings ratio of WEN indicates a rather cheap valuation: WEN is cheaper than 91.73% of the companies listed in the same industry.
WEN's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.45.
WEN is valuated reasonably with a Price/Forward Earnings ratio of 10.98.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WEN indicates a rather cheap valuation: WEN is cheaper than 86.47% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.90, WEN is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.04 | ||
| Fwd PE | 10.98 |
4.2 Price Multiples
70.68% of the companies in the same industry are more expensive than WEN, based on the Enterprise Value to EBITDA ratio.
WEN's Price/Free Cash Flow ratio is rather cheap when compared to the industry. WEN is cheaper than 93.98% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.12 | ||
| EV/EBITDA | 9.82 |
4.3 Compensation for Growth
The decent profitability rating of WEN may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.08
EPS Next 2Y3.15%
EPS Next 3Y4.6%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 7.62%, WEN is a good candidate for dividend investing.
WEN's Dividend Yield is rather good when compared to the industry average which is at 3.60. WEN pays more dividend than 96.24% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, WEN pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.62% |
5.2 History
The dividend of WEN is nicely growing with an annual growth rate of 32.37%!
WEN has been paying a dividend for at least 10 years, so it has a reliable track record.
WEN has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)32.37%
Div Incr Years0
Div Non Decr Years4
5.3 Sustainability
105.69% of the earnings are spent on dividend by WEN. This is not a sustainable payout ratio.
WEN's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP105.69%
EPS Next 2Y3.15%
EPS Next 3Y4.6%
11.68
+0.02 (+0.17%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners92.16%
Inst Owner Change3.48%
Ins Owners8.94%
Ins Owner Change0.72%
Market Cap2.24B
Analysts65.45
Price Target14.5 (24.14%)
Short Float %10.3%
Short Ratio3.12
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.62% |
Yearly Dividend1
Dividend Growth(5Y)32.37%
DP105.69%
Div Incr Years0
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.04%
Min EPS beat(2)-0.22%
Max EPS beat(2)2.3%
EPS beat(4)1
Avg EPS beat(4)-0.74%
Min EPS beat(4)-3.06%
Max EPS beat(4)2.3%
EPS beat(8)4
Avg EPS beat(8)0.19%
EPS beat(12)8
Avg EPS beat(12)1.77%
EPS beat(16)11
Avg EPS beat(16)4.43%
Revenue beat(2)1
Avg Revenue beat(2)-0.24%
Min Revenue beat(2)-1.35%
Max Revenue beat(2)0.88%
Revenue beat(4)2
Avg Revenue beat(4)-0.62%
Min Revenue beat(4)-2.13%
Max Revenue beat(4)0.88%
Revenue beat(8)2
Avg Revenue beat(8)-1.31%
Revenue beat(12)3
Avg Revenue beat(12)-1.2%
Revenue beat(16)5
Avg Revenue beat(16)-0.66%
PT rev (1m)-4.45%
PT rev (3m)-16.84%
EPS NQ rev (1m)-0.15%
EPS NQ rev (3m)-7.99%
EPS NY rev (1m)0.05%
EPS NY rev (3m)-4.97%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.03%
Revenue NY rev (1m)0.27%
Revenue NY rev (3m)-2.41%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.04 | ||
| Fwd PE | 10.98 | ||
| P/S | 1 | ||
| P/FCF | 9.12 | ||
| P/OCF | 6.58 | ||
| P/B | 17.22 | ||
| P/tB | N/A | ||
| EV/EBITDA | 9.82 |
EPS(TTM)0.97
EY8.3%
EPS(NY)1.06
Fwd EY9.11%
FCF(TTM)1.28
FCFY10.97%
OCF(TTM)1.77
OCFY15.19%
SpS11.64
BVpS0.68
TBVpS-9.51
PEG (NY)N/A
PEG (5Y)1.08
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.89% | ||
| ROE | 147.11% | ||
| ROCE | 8.37% | ||
| ROIC | 6.04% | ||
| ROICexc | 6.53% | ||
| ROICexgc | 12.35% | ||
| OM | 16.79% | ||
| PM (TTM) | 8.57% | ||
| GM | 63.24% | ||
| FCFM | 11.01% |
ROA(3y)3.68%
ROA(5y)3.46%
ROE(3y)59.67%
ROE(5y)49.27%
ROIC(3y)5.43%
ROIC(5y)5.17%
ROICexc(3y)6.13%
ROICexc(5y)5.72%
ROICexgc(3y)11.48%
ROICexgc(5y)10.67%
ROCE(3y)7.51%
ROCE(5y)7.16%
ROICexcg growth 3Y6.48%
ROICexcg growth 5Y7.52%
ROICexc growth 3Y6.19%
ROICexc growth 5Y7.2%
OM growth 3Y-1.47%
OM growth 5Y0.74%
PM growth 3Y-6.44%
PM growth 5Y1.55%
GM growth 3Y-1.04%
GM growth 5Y0.27%
F-Score6
Asset Turnover0.45
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 24.88 | ||
| Debt/FCF | 13.58 | ||
| Debt/EBITDA | 6.06 | ||
| Cap/Depr | 59.35% | ||
| Cap/Sales | 4.24% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 63.71% | ||
| Profit Quality | 128.41% | ||
| Current Ratio | 1.49 | ||
| Quick Ratio | 1.47 | ||
| Altman-Z | 1.15 |
F-Score6
WACC7.61%
ROIC/WACC0.79
Cap/Depr(3y)59.99%
Cap/Depr(5y)58.81%
Cap/Sales(3y)4.06%
Cap/Sales(5y)4.05%
Profit Quality(3y)119.97%
Profit Quality(5y)135.28%
High Growth Momentum
Growth
EPS 1Y (TTM)-2.02%
EPS 3Y6.84%
EPS 5Y11.13%
EPS Q2Q%-13.04%
EPS Next Y-3.51%
EPS Next 2Y3.15%
EPS Next 3Y4.6%
EPS Next 5Y7.7%
Revenue 1Y (TTM)2.18%
Revenue growth 3Y5.8%
Revenue growth 5Y5.62%
Sales Q2Q%-2.11%
Revenue Next Year-1.2%
Revenue Next 2Y1.3%
Revenue Next 3Y1.86%
Revenue Next 5Y3.11%
EBIT growth 1Y-2.02%
EBIT growth 3Y4.25%
EBIT growth 5Y6.41%
EBIT Next Year43.02%
EBIT Next 3Y15.67%
EBIT Next 5Y12.09%
FCF growth 1Y19.08%
FCF growth 3Y-0.86%
FCF growth 5Y4.01%
OCF growth 1Y16.73%
OCF growth 3Y0.91%
OCF growth 5Y4.22%