KRAFT HEINZ CO/THE (KHC) Stock Fundamental Analysis
USA - NASDAQ:KHC - US5007541064 - Common Stock
26.06 USD
-0.01 (-0.04%)
26.12 USD
+0.06 (+0.23%)
We assign a fundamental rating of 5 out of 10 to KHC. KHC was compared to 89 industry peers in the Food Products industry. KHC has a medium profitability rating, but doesn't score so well on its financial health evaluation. KHC is cheap, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
KHC had positive earnings in the past year.
In the past year KHC had a positive cash flow from operations.
In the past 5 years KHC has always been profitable.
In the past 5 years KHC always reported a positive cash flow from operatings.
1.2 Ratios
KHC's Return On Assets of -6.46% is on the low side compared to the rest of the industry. KHC is outperformed by 70.79% of its industry peers.
KHC has a worse Return On Equity (-12.74%) than 69.66% of its industry peers.
Looking at the Return On Invested Capital, with a value of 5.58%, KHC is in the better half of the industry, outperforming 60.67% of the companies in the same industry.
KHC had an Average Return On Invested Capital over the past 3 years of 4.97%. This is significantly below the industry average of 27.78%.
The 3 year average ROIC (4.97%) for KHC is below the current ROIC(5.58%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -6.46% | ||
| ROE | -12.74% | ||
| ROIC | 5.58% |
ROA(3y)2.96%
ROA(5y)2.06%
ROE(3y)5.4%
ROE(5y)3.79%
ROIC(3y)4.97%
ROIC(5y)4.89%
1.3 Margins
In the last couple of years the Profit Margin of KHC has grown nicely.
KHC's Operating Margin of 20.52% is amongst the best of the industry. KHC outperforms 97.75% of its industry peers.
In the last couple of years the Operating Margin of KHC has remained more or less at the same level.
KHC has a Gross Margin of 34.31%. This is in the better half of the industry: KHC outperforms 77.53% of its industry peers.
In the last couple of years the Gross Margin of KHC has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.52% | ||
| PM (TTM) | N/A | ||
| GM | 34.31% |
OM growth 3Y1.51%
OM growth 5Y0.42%
PM growth 3Y39.8%
PM growth 5Y6.51%
GM growth 3Y1.31%
GM growth 5Y1.14%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so KHC is destroying value.
The number of shares outstanding for KHC has been reduced compared to 1 year ago.
The number of shares outstanding for KHC has been reduced compared to 5 years ago.
The debt/assets ratio for KHC is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.89, we must say that KHC is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 0.89, KHC is not doing good in the industry: 73.03% of the companies in the same industry are doing better.
KHC has a debt to FCF ratio of 6.07. This is a slightly negative value and a sign of low solvency as KHC would need 6.07 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 6.07, KHC is in the better half of the industry, outperforming 74.16% of the companies in the same industry.
A Debt/Equity ratio of 0.47 indicates that KHC is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.47, KHC perfoms like the industry average, outperforming 47.19% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 6.07 | ||
| Altman-Z | 0.89 |
ROIC/WACC0.83
WACC6.7%
2.3 Liquidity
A Current Ratio of 1.07 indicates that KHC should not have too much problems paying its short term obligations.
KHC's Current ratio of 1.07 is on the low side compared to the rest of the industry. KHC is outperformed by 74.16% of its industry peers.
A Quick Ratio of 0.66 indicates that KHC may have some problems paying its short term obligations.
KHC has a worse Quick ratio (0.66) than 71.91% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.07 | ||
| Quick Ratio | 0.66 |
3. Growth
3.1 Past
KHC shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.36%.
Measured over the past 5 years, KHC shows a small growth in Earnings Per Share. The EPS has been growing by 1.43% on average per year.
Looking at the last year, KHC shows a decrease in Revenue. The Revenue has decreased by -3.83% in the last year.
Measured over the past years, KHC shows a small growth in Revenue. The Revenue has been growing by 0.69% on average per year.
EPS 1Y (TTM)-2.36%
EPS 3Y1.34%
EPS 5Y1.43%
EPS Q2Q%-11.54%
Revenue 1Y (TTM)-3.83%
Revenue growth 3Y-0.25%
Revenue growth 5Y0.69%
Sales Q2Q%-1.91%
3.2 Future
The Earnings Per Share is expected to grow by 1.71% on average over the next years.
The Revenue is expected to grow by 0.45% on average over the next years.
EPS Next Y-14.37%
EPS Next 2Y-6.19%
EPS Next 3Y-2.53%
EPS Next 5Y1.71%
Revenue Next Year-2.91%
Revenue Next 2Y-1.04%
Revenue Next 3Y-0.25%
Revenue Next 5Y0.45%
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 stable.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
KHC is valuated reasonably with a Price/Earnings ratio of 8.99.
KHC's Price/Earnings ratio is rather cheap when compared to the industry. KHC is cheaper than 86.52% of the companies in the same industry.
KHC's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.86.
With a Price/Forward Earnings ratio of 9.68, the valuation of KHC can be described as very reasonable.
92.13% of the companies in the same industry are more expensive than KHC, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of KHC to the average of the S&P500 Index (23.32), we can say KHC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.99 | ||
| Fwd PE | 9.68 |
4.2 Price Multiples
KHC's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. KHC is cheaper than 70.79% of the companies in the same industry.
86.52% of the companies in the same industry are more expensive than KHC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.83 | ||
| EV/EBITDA | 7.89 |
4.3 Compensation for Growth
KHC has a very decent profitability rating, which may justify a higher PE ratio.
A cheap valuation may be justified as KHC's earnings are expected to decrease with -2.53% in the coming years.
PEG (NY)N/A
PEG (5Y)6.27
EPS Next 2Y-6.19%
EPS Next 3Y-2.53%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.98%, KHC is a good candidate for dividend investing.
KHC's Dividend Yield is rather good when compared to the industry average which is at 5.01. KHC pays more dividend than 87.64% of the companies in the same industry.
KHC's Dividend Yield is rather good when compared to the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.98% |
5.2 History
KHC has been paying a dividend for at least 10 years, so it has a reliable track record.
KHC has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)0%
Div Incr Years0
Div Non Decr Years5
5.3 Sustainability
The earnings of KHC are negative and hence is the payout ratio. KHC will probably not be able to sustain this dividend level.
DP-36.29%
EPS Next 2Y-6.19%
EPS Next 3Y-2.53%
26.06
-0.01 (-0.04%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners59.55%
Inst Owner Change0.19%
Ins Owners0.31%
Ins Owner Change0.06%
Market Cap30.84B
Analysts56.67
Price Target30.58 (17.34%)
Short Float %6.92%
Short Ratio4.06
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.98% |
Yearly Dividend1.6
Dividend Growth(5Y)0%
DP-36.29%
Div Incr Years0
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.65%
Min EPS beat(2)1.8%
Max EPS beat(2)7.5%
EPS beat(4)4
Avg EPS beat(4)4.16%
Min EPS beat(4)0.43%
Max EPS beat(4)7.5%
EPS beat(8)7
Avg EPS beat(8)3.78%
EPS beat(12)11
Avg EPS beat(12)5.46%
EPS beat(16)15
Avg EPS beat(16)7.14%
Revenue beat(2)1
Avg Revenue beat(2)-0.4%
Min Revenue beat(2)-1.28%
Max Revenue beat(2)0.47%
Revenue beat(4)1
Avg Revenue beat(4)-1.16%
Min Revenue beat(4)-2.29%
Max Revenue beat(4)0.47%
Revenue beat(8)1
Avg Revenue beat(8)-1.74%
Revenue beat(12)4
Avg Revenue beat(12)-1.05%
Revenue beat(16)8
Avg Revenue beat(16)-0.27%
PT rev (1m)-2%
PT rev (3m)-1.48%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-7.11%
EPS NY rev (1m)-0.14%
EPS NY rev (3m)0.2%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.21%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)0.85%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.99 | ||
| Fwd PE | 9.68 | ||
| P/S | 1.22 | ||
| P/FCF | 8.83 | ||
| P/OCF | 7.01 | ||
| P/B | 0.75 | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.89 |
EPS(TTM)2.9
EY11.13%
EPS(NY)2.69
Fwd EY10.33%
FCF(TTM)2.95
FCFY11.33%
OCF(TTM)3.72
OCFY14.27%
SpS21.38
BVpS34.94
TBVpS-15.76
PEG (NY)N/A
PEG (5Y)6.27
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -6.46% | ||
| ROE | -12.74% | ||
| ROCE | 7.12% | ||
| ROIC | 5.58% | ||
| ROICexc | 5.78% | ||
| ROICexgc | 39.17% | ||
| OM | 20.52% | ||
| PM (TTM) | N/A | ||
| GM | 34.31% | ||
| FCFM | 13.8% |
ROA(3y)2.96%
ROA(5y)2.06%
ROE(3y)5.4%
ROE(5y)3.79%
ROIC(3y)4.97%
ROIC(5y)4.89%
ROICexc(3y)5.05%
ROICexc(5y)5.02%
ROICexgc(3y)48.4%
ROICexgc(5y)52.54%
ROCE(3y)6.35%
ROCE(5y)6.25%
ROICexcg growth 3Y-16.8%
ROICexcg growth 5Y-7.23%
ROICexc growth 3Y1.76%
ROICexc growth 5Y3.9%
OM growth 3Y1.51%
OM growth 5Y0.42%
PM growth 3Y39.8%
PM growth 5Y6.51%
GM growth 3Y1.31%
GM growth 5Y1.14%
F-Score5
Asset Turnover0.31
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 6.07 | ||
| Debt/EBITDA | 3.14 | ||
| Cap/Depr | 95.27% | ||
| Cap/Sales | 3.58% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 71.61% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.07 | ||
| Quick Ratio | 0.66 | ||
| Altman-Z | 0.89 |
F-Score5
WACC6.7%
ROIC/WACC0.83
Cap/Depr(3y)108.79%
Cap/Depr(5y)97.47%
Cap/Sales(3y)3.92%
Cap/Sales(5y)3.5%
Profit Quality(3y)93.19%
Profit Quality(5y)387.46%
High Growth Momentum
Growth
EPS 1Y (TTM)-2.36%
EPS 3Y1.34%
EPS 5Y1.43%
EPS Q2Q%-11.54%
EPS Next Y-14.37%
EPS Next 2Y-6.19%
EPS Next 3Y-2.53%
EPS Next 5Y1.71%
Revenue 1Y (TTM)-3.83%
Revenue growth 3Y-0.25%
Revenue growth 5Y0.69%
Sales Q2Q%-1.91%
Revenue Next Year-2.91%
Revenue Next 2Y-1.04%
Revenue Next 3Y-0.25%
Revenue Next 5Y0.45%
EBIT growth 1Y-2.9%
EBIT growth 3Y1.26%
EBIT growth 5Y1.11%
EBIT Next Year9.95%
EBIT Next 3Y4.24%
EBIT Next 5Y5.07%
FCF growth 1Y53.51%
FCF growth 3Y-12.18%
FCF growth 5Y1.64%
OCF growth 1Y34.76%
OCF growth 3Y-7.95%
OCF growth 5Y3.33%