KRAFT HEINZ CO/THE (KHC) Stock Fundamental Analysis
NASDAQ:KHC - Nasdaq - US5007541064 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to KHC. KHC was compared to 90 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 has a decent growth rate and is not valued too expensively.
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.
Each year in the past 5 years KHC has 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 2.94% is in line compared to the rest of the industry. KHC outperforms 57.78% of its industry peers.
The Return On Equity of KHC (5.37%) is comparable to the rest of the industry.
KHC has a Return On Invested Capital of 4.98%. This is comparable to the rest of the industry: KHC outperforms 48.89% of its industry peers.
KHC had an Average Return On Invested Capital over the past 3 years of 4.97%. This is below the industry average of 8.67%.
The 3 year average ROIC (4.97%) for KHC is below the current ROIC(4.98%), indicating increased profibility in the last year.
| 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
With an excellent Profit Margin value of 10.44%, KHC belongs to the best of the industry, outperforming 87.78% of the companies in the same industry.
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 96.67% of the companies in the same industry.
KHC's Operating Margin has been stable in the last couple of years.
KHC has a better Gross Margin (34.58%) than 77.78% of its industry peers.
KHC's Gross Margin has been stable in the last couple of years.
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so KHC 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.
KHC has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.00, we must say that KHC is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.00, KHC is doing worse than 72.22% of the companies in the same industry.
KHC has a debt to FCF ratio of 7.14. This is a slightly negative value and a sign of low solvency as KHC would need 7.14 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 7.14, KHC is doing good in the industry, outperforming 63.33% of the companies in the same industry.
KHC has a Debt/Equity ratio of 0.42. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of KHC (0.42) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 7.14 | ||
| Altman-Z | 1 |
ROIC/WACC0.71
WACC7.02%
2.3 Liquidity
A Current Ratio of 1.31 indicates that KHC should not have too much problems paying its short term obligations.
KHC has a Current ratio (1.31) which is comparable to the rest of the industry.
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.
Looking at the Quick ratio, with a value of 0.81, KHC is in line with its industry, outperforming 42.22% of the companies in the same 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.
KHC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.69% yearly.
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 2.20% yearly.
The Revenue is expected to grow by 0.63% on average over the next years.
EPS Next Y-14.56%
EPS Next 2Y-6.25%
EPS Next 3Y-2.59%
EPS Next 5Y2.2%
Revenue Next Year-3.75%
Revenue Next 2Y-1.56%
Revenue Next 3Y-0.59%
Revenue Next 5Y0.63%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 8.86 indicates a reasonable valuation of KHC.
KHC's Price/Earnings ratio is rather cheap when compared to the industry. KHC is cheaper than 87.78% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 25.91, KHC is valued rather cheaply.
KHC is valuated reasonably with a Price/Forward Earnings ratio of 9.85.
Based on the Price/Forward Earnings ratio, KHC is valued cheaper than 92.22% of the companies in the same industry.
KHC is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.85, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.86 | ||
| Fwd PE | 9.85 |
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 71.11% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of KHC indicates a somewhat cheap valuation: KHC is cheaper than 78.89% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.37 | ||
| EV/EBITDA | 7.95 |
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 -2.59% in the coming years.
PEG (NY)N/A
PEG (5Y)6.19
EPS Next 2Y-6.25%
EPS Next 3Y-2.59%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.82%, KHC is a good candidate for dividend investing.
KHC's Dividend Yield is rather good when compared to the industry average which is at 4.58. KHC pays more dividend than 88.89% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, KHC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.82% |
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
KHC pays out 72.39% of its income as dividend. This is not a sustainable payout ratio.
DP72.39%
EPS Next 2Y-6.25%
EPS Next 3Y-2.59%
26.5
-0.13 (-0.49%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners59.39%
Inst Owner Change-0.63%
Ins Owners0.26%
Ins Owner Change0.06%
Market Cap31.36B
Analysts55.48
Price Target31.3 (18.11%)
Short Float %5.46%
Short Ratio4.2
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.82% |
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)-3.38%
PT rev (3m)-14.53%
EPS NQ rev (1m)-7.52%
EPS NQ rev (3m)-9.99%
EPS NY rev (1m)-3.26%
EPS NY rev (3m)-7.35%
Revenue NQ rev (1m)-0.03%
Revenue NQ rev (3m)-0.33%
Revenue NY rev (1m)-0.14%
Revenue NY rev (3m)-3.52%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.86 | ||
| Fwd PE | 9.85 | ||
| P/S | 1.23 | ||
| P/FCF | 10.37 | ||
| P/OCF | 7.59 | ||
| P/B | 0.63 | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.95 |
EPS(TTM)2.99
EY11.28%
EPS(NY)2.69
Fwd EY10.15%
FCF(TTM)2.56
FCFY9.64%
OCF(TTM)3.49
OCFY13.18%
SpS21.49
BVpS41.79
TBVpS-16.43
PEG (NY)N/A
PEG (5Y)6.19
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 |
F-Score6
WACC7.02%
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-14.56%
EPS Next 2Y-6.25%
EPS Next 3Y-2.59%
EPS Next 5Y2.2%
Revenue 1Y (TTM)-4.25%
Revenue growth 3Y-0.25%
Revenue growth 5Y0.69%
Sales Q2Q%-6.43%
Revenue Next Year-3.75%
Revenue Next 2Y-1.56%
Revenue Next 3Y-0.59%
Revenue Next 5Y0.63%
EBIT growth 1Y-0.79%
EBIT growth 3Y1.26%
EBIT growth 5Y1.11%
EBIT Next Year13.63%
EBIT Next 3Y5.59%
EBIT Next 5Y5.49%
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%