22.72 USD
+0.32 (+1.43%)
22.72 USD
0 (0%)
We assign a fundamental rating of 4 out of 10 to KHC. KHC was compared to 87 industry peers in the Food Products industry. While KHC is still in line with the averages on profitability rating, there are concerns on its financial health. 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.
- KHC had a positive operating cash flow in the past year.
- In the past 5 years KHC has always been profitable.
- Each year in the past 5 years KHC had a positive operating cash flow.
1.2 Ratios
- KHC's Return On Assets of -5.34% is on the low side compared to the rest of the industry. KHC is outperformed by 66.67% of its industry peers.
- Looking at the Return On Equity, with a value of -10.53%, KHC is doing worse than 65.52% of the companies in the same industry.
- The Return On Invested Capital of KHC (5.32%) is better than 62.07% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for KHC is significantly below the industry average of 27.79%.
- The 3 year average ROIC (4.97%) for KHC is below the current ROIC(5.32%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -5.34% | ||
| ROE | -10.53% | ||
| ROIC | 5.32% |
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
- KHC's Profit Margin has improved in the last couple of years.
- The Operating Margin of KHC (19.67%) is better than 97.70% of its industry peers.
- KHC's Operating Margin has been stable in the last couple of years.
- KHC's Gross Margin of 33.75% is fine compared to the rest of the industry. KHC outperforms 73.56% of its industry peers.
- KHC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.67% | ||
| PM (TTM) | N/A | ||
| GM | 33.75% |
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.
- Compared to 5 years ago, KHC has less shares outstanding
- KHC has a worse debt/assets ratio than last year.
2.2 Solvency
- Based on the Altman-Z score of 0.83, we must say that KHC is in the distress zone and has some risk of bankruptcy.
- With a Altman-Z score value of 0.83, KHC is not doing good in the industry: 74.71% of the companies in the same industry are doing better.
- KHC has a debt to FCF ratio of 5.84. This is a neutral value as KHC would need 5.84 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 5.84, KHC is in the better half of the industry, outperforming 74.71% of the companies in the same industry.
- KHC has a Debt/Equity ratio of 0.47. This is a healthy value indicating a solid balance between debt and equity.
- KHC has a Debt to Equity ratio (0.47) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 5.84 | ||
| Altman-Z | 0.83 |
ROIC/WACC0.79
WACC6.73%
2.3 Liquidity
- A Current Ratio of 1.13 indicates that KHC should not have too much problems paying its short term obligations.
- KHC has a worse Current ratio (1.13) than 71.26% of its industry peers.
- KHC has a Quick Ratio of 1.13. This is a bad value and indicates that KHC is not financially healthy enough and could expect problems in meeting its short term obligations.
- KHC's Quick ratio of 0.73 is on the low side compared to the rest of the industry. KHC is outperformed by 62.07% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.13 | ||
| Quick Ratio | 0.73 |
3. Growth
3.1 Past
- KHC shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.00%.
- 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.
- KHC shows a decrease in Revenue. In the last year, the revenue decreased by -3.70%.
- The Revenue has been growing slightly by 0.69% on average over the past years.
EPS 1Y (TTM)-8%
EPS 3Y1.34%
EPS 5Y1.43%
EPS Q2Q%-18.67%
Revenue 1Y (TTM)-3.7%
Revenue growth 3Y-0.25%
Revenue growth 5Y0.69%
Sales Q2Q%-2.29%
3.2 Future
- KHC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 0.77% yearly.
- KHC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 0.12% yearly.
EPS Next Y-16.46%
EPS Next 2Y-9.05%
EPS Next 3Y-5.09%
EPS Next 5Y0.77%
Revenue Next Year-3.84%
Revenue Next 2Y-1.99%
Revenue Next 3Y-1.1%
Revenue Next 5Y0.12%
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
- 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
- Based on the Price/Earnings ratio of 8.23, the valuation of KHC can be described as reasonable.
- Compared to the rest of the industry, the Price/Earnings ratio of KHC indicates a rather cheap valuation: KHC is cheaper than 90.80% of the companies listed in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 27.32, KHC is valued rather cheaply.
- KHC is valuated reasonably with a Price/Forward Earnings ratio of 8.98.
- Based on the Price/Forward Earnings ratio, KHC is valued cheaply inside the industry as 97.70% of the companies are valued more expensively.
- KHC is valuated cheaply when we compare the Price/Forward Earnings ratio to 24.32, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.23 | ||
| Fwd PE | 8.98 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, KHC is valued a bit cheaper than the industry average as 75.86% of the companies are valued more expensively.
- KHC's Price/Free Cash Flow ratio is rather cheap when compared to the industry. KHC is cheaper than 89.66% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.41 | ||
| EV/EBITDA | 7.44 |
4.3 Compensation for Growth
- KHC has a very decent profitability rating, which may justify a higher PE ratio.
- KHC's earnings are expected to decrease with -5.09% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)5.75
EPS Next 2Y-9.05%
EPS Next 3Y-5.09%
5. Dividend
5.1 Amount
- KHC has a Yearly Dividend Yield of 6.60%, which is a nice return.
- Compared to an average industry Dividend Yield of 2.28, KHC pays a better dividend. On top of this KHC pays more dividend than 88.51% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.83, KHC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.6% |
5.2 History
- KHC has been paying a dividend for at least 10 years, so it has a reliable track record.
- As KHC did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)0%
Div Incr Years0
Div Non Decr Years5
5.3 Sustainability
- KHC has negative earnings and hence a negative payout ratio. The dividend may be in danger.
DP-43.59%
EPS Next 2Y-9.05%
EPS Next 3Y-5.09%
KRAFT HEINZ CO/THE / KHC FAQ
What is the ChartMill fundamental rating of KRAFT HEINZ CO/THE (KHC) stock?
ChartMill assigns a fundamental rating of 4 / 10 to KHC.
What is the valuation status of KRAFT HEINZ CO/THE (KHC) stock?
ChartMill assigns a valuation rating of 7 / 10 to KRAFT HEINZ CO/THE (KHC). This can be considered as Undervalued.
What is the profitability of KHC stock?
KRAFT HEINZ CO/THE (KHC) has a profitability rating of 6 / 10.
What is the financial health of KRAFT HEINZ CO/THE (KHC) stock?
The financial health rating of KRAFT HEINZ CO/THE (KHC) is 3 / 10.
How sustainable is the dividend of KRAFT HEINZ CO/THE (KHC) stock?
The dividend rating of KRAFT HEINZ CO/THE (KHC) is 6 / 10 and the dividend payout ratio is -43.59%.