KRAFT HEINZ CO/THE (KHC) Stock Fundamental Analysis
NASDAQ:KHC - Nasdaq - US5007541064 - Common Stock - Currency: USD
KHC gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 91 industry peers in the Food Products industry. While KHC belongs to the best of the industry regarding profitability, there are concerns on its financial health. KHC is valued quite cheap, but it does not seem to be growing.
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 2.94% is in line compared to the rest of the industry. KHC outperforms 57.14% of its industry peers.
Looking at the Return On Equity, with a value of 5.37%, KHC is in line with its industry, outperforming 47.25% of the companies in the same industry.
KHC has a Return On Invested Capital of 4.98%. This is comparable to the rest of the industry: KHC outperforms 54.95% of its industry peers.
KHC had an Average Return On Invested Capital over the past 3 years of 4.97%. This is significantly below the industry average of 28.10%.
The last Return On Invested Capital (4.98%) for KHC is above the 3 year average (4.97%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.94% | ||
| ROE | 5.37% | ||
| ROIC | 4.98% |
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 of 10.44% is amongst the best of the industry. KHC outperforms 87.91% of its industry peers.
KHC's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 20.76%, KHC belongs to the best of the industry, outperforming 96.70% of the companies in the same industry.
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 34.58%. This is in the better half of the industry: KHC outperforms 75.82% 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 | 20.76% | ||
| PM (TTM) | 10.44% | ||
| GM | 34.58% |
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
KHC has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, KHC has less shares outstanding
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 1.04, we must say that KHC is in the distress zone and has some risk of bankruptcy.
KHC's Altman-Z score of 1.04 is on the low side compared to the rest of the industry. KHC is outperformed by 70.33% of its industry peers.
The Debt to FCF ratio of KHC is 7.14, which is on the high side as it means it would take KHC, 7.14 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of KHC (7.14) is better than 69.23% of its industry peers.
KHC has a Debt/Equity ratio of 0.42. This is a healthy value indicating a solid balance between debt and equity.
KHC has a Debt to Equity ratio (0.42) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 7.14 | ||
| Altman-Z | 1.04 |
ROIC/WACC0.71
WACC7.01%
2.3 Liquidity
KHC has a Current Ratio of 1.31. This is a normal value and indicates that KHC is financially healthy and should not expect problems in meeting its short term obligations.
KHC's Current ratio of 1.31 is on the low side compared to the rest of the industry. KHC is outperformed by 60.44% of its industry peers.
KHC has a Quick Ratio of 1.31. 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 has a Quick ratio (0.81) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.31 | ||
| Quick Ratio | 0.81 |
3. Growth
3.1 Past
KHC shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 0.34%.
KHC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 1.43% yearly.
Looking at the last year, KHC shows a decrease in Revenue. The Revenue has decreased by -4.25% in the last year.
The Revenue has been growing slightly by 0.69% on average over the past years.
EPS 1Y (TTM)0.34%
EPS 3Y1.34%
EPS 5Y1.43%
EPS Q2Q%-10.14%
Revenue 1Y (TTM)-4.25%
Revenue growth 3Y-0.25%
Revenue growth 5Y0.69%
Sales Q2Q%-6.43%
3.2 Future
KHC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 1.39% yearly.
KHC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 0.23% yearly.
EPS Next Y-14.59%
EPS Next 2Y-6.3%
EPS Next 3Y-2.61%
EPS Next 5Y1.39%
Revenue Next Year-3.69%
Revenue Next 2Y-1.51%
Revenue Next 3Y-0.52%
Revenue Next 5Y0.23%
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
Based on the Price/Earnings ratio of 9.59, the valuation of KHC can be described as reasonable.
Based on the Price/Earnings ratio, KHC is valued cheaply inside the industry as 84.62% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 28.04. KHC is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 10.68, which indicates a very decent valuation of KHC.
Compared to the rest of the industry, the Price/Forward Earnings ratio of KHC indicates a rather cheap valuation: KHC is cheaper than 86.81% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of KHC to the average of the S&P500 Index (37.64), we can say KHC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.59 | ||
| Fwd PE | 10.68 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of KHC indicates a somewhat cheap valuation: KHC is cheaper than 71.43% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, KHC is valued cheaper than 81.32% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.22 | ||
| EV/EBITDA | 8.38 |
4.3 Compensation for Growth
The decent profitability rating of KHC may justify a higher PE ratio.
KHC's earnings are expected to decrease with -2.61% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)6.7
EPS Next 2Y-6.3%
EPS Next 3Y-2.61%
5. Dividend
5.1 Amount
KHC has a Yearly Dividend Yield of 5.69%, which is a nice return.
Compared to an average industry Dividend Yield of 4.73, KHC pays a better dividend. On top of this KHC pays more dividend than 86.81% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.35, KHC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.69% |
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 pays out 72.39% of its income as dividend. This is not a sustainable payout ratio.
DP72.39%
EPS Next 2Y-6.3%
EPS Next 3Y-2.61%
28.68
-0.1 (-0.35%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners59.48%
Inst Owner Change-0.14%
Ins Owners0.28%
Ins Owner Change0.06%
Market Cap33.94B
Analysts54.84
Price Target30.94 (7.88%)
Short Float %6.11%
Short Ratio3.63
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.69% |
Yearly Dividend1.6
Dividend Growth(5Y)0%
DP72.39%
Div Incr Years0
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.36%
Min EPS beat(2)1.8%
Max EPS beat(2)6.92%
EPS beat(4)4
Avg EPS beat(4)3.55%
Min EPS beat(4)0.43%
Max EPS beat(4)6.92%
EPS beat(8)7
Avg EPS beat(8)3.21%
EPS beat(12)11
Avg EPS beat(12)4.96%
EPS beat(16)15
Avg EPS beat(16)7.11%
Revenue beat(2)0
Avg Revenue beat(2)-1.79%
Min Revenue beat(2)-2.29%
Max Revenue beat(2)-1.28%
Revenue beat(4)0
Avg Revenue beat(4)-1.81%
Min Revenue beat(4)-2.29%
Max Revenue beat(4)-1.28%
Revenue beat(8)0
Avg Revenue beat(8)-2.09%
Revenue beat(12)4
Avg Revenue beat(12)-0.96%
Revenue beat(16)7
Avg Revenue beat(16)-0.3%
PT rev (1m)-0.82%
PT rev (3m)-4.47%
EPS NQ rev (1m)-0.1%
EPS NQ rev (3m)-7.62%
EPS NY rev (1m)-0.06%
EPS NY rev (3m)-3.3%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.03%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)-0.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.59 | ||
| Fwd PE | 10.68 | ||
| P/S | 1.33 | ||
| P/FCF | 11.22 | ||
| P/OCF | 8.21 | ||
| P/B | 0.69 | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.38 |
EPS(TTM)2.99
EY10.43%
EPS(NY)2.69
Fwd EY9.37%
FCF(TTM)2.56
FCFY8.91%
OCF(TTM)3.49
OCFY12.18%
SpS21.49
BVpS41.79
TBVpS-16.43
PEG (NY)N/A
PEG (5Y)6.7
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.94% | ||
| ROE | 5.37% | ||
| ROCE | 6.36% | ||
| ROIC | 4.98% | ||
| ROICexc | 5.15% | ||
| ROICexgc | 36.43% | ||
| OM | 20.76% | ||
| PM (TTM) | 10.44% | ||
| GM | 34.58% | ||
| FCFM | 11.89% |
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-Score6
Asset Turnover0.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 7.14 | ||
| Debt/EBITDA | 3.36 | ||
| Cap/Depr | 116.75% | ||
| Cap/Sales | 4.36% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 66.36% | ||
| Profit Quality | 113.94% | ||
| Current Ratio | 1.31 | ||
| Quick Ratio | 0.81 | ||
| Altman-Z | 1.04 |
F-Score6
WACC7.01%
ROIC/WACC0.71
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)0.34%
EPS 3Y1.34%
EPS 5Y1.43%
EPS Q2Q%-10.14%
EPS Next Y-14.59%
EPS Next 2Y-6.3%
EPS Next 3Y-2.61%
EPS Next 5Y1.39%
Revenue 1Y (TTM)-4.25%
Revenue growth 3Y-0.25%
Revenue growth 5Y0.69%
Sales Q2Q%-6.43%
Revenue Next Year-3.69%
Revenue Next 2Y-1.51%
Revenue Next 3Y-0.52%
Revenue Next 5Y0.23%
EBIT growth 1Y-0.79%
EBIT growth 3Y1.26%
EBIT growth 5Y1.11%
EBIT Next Year10.65%
EBIT Next 3Y4.34%
EBIT Next 5Y5.07%
FCF growth 1Y101.53%
FCF growth 3Y-12.18%
FCF growth 5Y1.64%
OCF growth 1Y67.4%
OCF growth 3Y-7.95%
OCF growth 5Y3.33%