WENDY'S CO/THE (WEN) Stock Fundamental Analysis
NASDAQ:WEN - Nasdaq - US95058W1009 - Common Stock - Currency: USD
Taking everything into account, WEN scores 5 out of 10 in our fundamental rating. WEN was compared to 132 industry peers in the Hotels, Restaurants & Leisure industry. While WEN belongs to the best of the industry regarding profitability, there are concerns on its financial health. WEN has a bad growth rate and is valued cheaply.
1. Profitability
1.1 Basic Checks
In the past year WEN was profitable.
WEN had a positive operating cash flow in the past year.
Each year in the past 5 years WEN has been profitable.
Each year in the past 5 years WEN had a positive operating cash flow.
1.2 Ratios
WEN has a Return On Assets of 3.89%. This is in the better half of the industry: WEN outperforms 61.36% of its industry peers.
WEN has a better Return On Equity (147.11%) than 100.00% of its industry peers.
The Return On Invested Capital of WEN (6.04%) 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 13.91%.
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
Looking at the Profit Margin, with a value of 8.57%, WEN is in the better half of the industry, outperforming 67.42% of the companies in the same industry.
WEN's Profit Margin has improved in the last couple of years.
WEN has a better Operating Margin (16.79%) than 73.48% of its industry peers.
WEN's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 63.24%, WEN is in the better half of the industry, outperforming 78.03% 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so WEN is destroying value.
WEN has less shares outstanding than it did 1 year ago.
WEN has less shares outstanding than it did 5 years ago.
WEN has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.12, we must say that WEN is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 1.12, WEN is not doing good in the industry: 63.64% of the companies in the same industry are doing better.
WEN has a debt to FCF ratio of 13.58. This is a negative value and a sign of low solvency as WEN would need 13.58 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 13.58, WEN is in line with its industry, outperforming 51.52% of the companies in the same industry.
WEN has a Debt/Equity ratio of 24.88. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 24.88, WEN is doing worse than 68.94% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 24.88 | ||
| Debt/FCF | 13.58 | ||
| Altman-Z | 1.12 |
ROIC/WACC0.79
WACC7.64%
2.3 Liquidity
A Current Ratio of 1.49 indicates that WEN should not have too much problems paying its short term obligations.
With a decent Current ratio value of 1.49, WEN is doing good in the industry, outperforming 75.00% of the companies in the same industry.
A Quick Ratio of 1.47 indicates that WEN should not have too much problems paying its short term obligations.
The Quick ratio of WEN (1.47) is better than 77.27% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.49 | ||
| Quick Ratio | 1.47 |
3. Growth
3.1 Past
WEN shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.02%.
The Earnings Per Share has been growing by 11.13% on average over the past years. This is quite good.
The Revenue has been growing slightly by 2.18% in the past year.
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
The Earnings Per Share is expected to grow by 7.70% on average over the next years.
WEN is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.11% yearly.
EPS Next Y-3.91%
EPS Next 2Y2.81%
EPS Next 3Y4.32%
EPS Next 5Y7.7%
Revenue Next Year-1.6%
Revenue Next 2Y1.21%
Revenue Next 3Y1.76%
Revenue Next 5Y3.11%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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
With a Price/Earnings ratio of 10.79, the valuation of WEN can be described as very reasonable.
Based on the Price/Earnings ratio, WEN is valued cheaper than 93.18% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.50. WEN is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 9.91, the valuation of WEN can be described as reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WEN indicates a rather cheap valuation: WEN is cheaper than 88.64% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of WEN to the average of the S&P500 Index (36.44), we can say WEN is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.79 | ||
| Fwd PE | 9.91 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WEN indicates a somewhat cheap valuation: WEN is cheaper than 73.48% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, WEN is valued cheaper than 97.73% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.17 | ||
| EV/EBITDA | 9.42 |
4.3 Compensation for Growth
The decent profitability rating of WEN may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.97
EPS Next 2Y2.81%
EPS Next 3Y4.32%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 7.88%, WEN is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.47, WEN pays a better dividend. On top of this WEN pays more dividend than 96.97% of the companies listed in the same industry.
WEN's Dividend Yield is rather good when compared to the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.88% |
5.2 History
The dividend of WEN is nicely growing with an annual growth rate of 32.37%!
WEN has paid a dividend for at least 10 years, which is 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 2Y2.81%
EPS Next 3Y4.32%
10.47
-0.1 (-0.95%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners92.16%
Inst Owner Change0%
Ins Owners8.94%
Ins Owner Change0.72%
Market Cap2.01B
Analysts65.45
Price Target14.5 (38.49%)
Short Float %12.2%
Short Ratio3.31
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.88% |
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)-1.73%
PT rev (3m)-16.84%
EPS NQ rev (1m)-0.44%
EPS NQ rev (3m)-8.39%
EPS NY rev (1m)-0.36%
EPS NY rev (3m)-5.37%
Revenue NQ rev (1m)-0.18%
Revenue NQ rev (3m)-3.06%
Revenue NY rev (1m)-0.14%
Revenue NY rev (3m)-2.55%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.79 | ||
| Fwd PE | 9.91 | ||
| P/S | 0.9 | ||
| P/FCF | 8.17 | ||
| P/OCF | 5.9 | ||
| P/B | 15.44 | ||
| P/tB | N/A | ||
| EV/EBITDA | 9.42 |
EPS(TTM)0.97
EY9.26%
EPS(NY)1.06
Fwd EY10.09%
FCF(TTM)1.28
FCFY12.24%
OCF(TTM)1.77
OCFY16.95%
SpS11.64
BVpS0.68
TBVpS-9.51
PEG (NY)N/A
PEG (5Y)0.97
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 | 1.12 |
F-Score6
WACC7.64%
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-3.91%
EPS Next 2Y2.81%
EPS Next 3Y4.32%
EPS Next 5Y7.7%
Revenue 1Y (TTM)2.18%
Revenue growth 3Y5.8%
Revenue growth 5Y5.62%
Sales Q2Q%-2.11%
Revenue Next Year-1.6%
Revenue Next 2Y1.21%
Revenue Next 3Y1.76%
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%