KRAFT HEINZ CO/THE (KHC) Stock Fundamental Analysis
NASDAQ:KHC - Nasdaq - US5007541064 - Common Stock - Currency: USD
Overall KHC gets a fundamental rating of 5 out of 10. We evaluated KHC against 91 industry peers in the Food Products industry. While KHC has a great profitability rating, there are quite some concerns on its financial health. KHC is cheap, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year KHC was profitable.
In the past year KHC had a positive cash flow from operations.
Each year in the past 5 years KHC has been profitable.
Each year in the past 5 years KHC had a positive operating cash flow.
1.2 Ratios
With a Return On Assets value of 2.94%, KHC perfoms like the industry average, outperforming 57.14% of the companies in the same industry.
KHC's Return On Equity of 5.37% is in line compared to the rest of the industry. KHC outperforms 47.25% of its industry peers.
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
The Profit Margin of KHC (10.44%) is better than 87.91% of its industry peers.
KHC's Profit Margin has improved in the last couple of years.
KHC's Operating Margin of 20.76% is amongst the best of the industry. KHC outperforms 96.70% 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's Gross Margin of 34.58% is fine compared to the rest 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
KHC has less shares outstanding than it did 5 years ago.
KHC has a worse debt/assets ratio than last year.
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.
The Altman-Z score of KHC (1.04) is worse than 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.
KHC's Debt to FCF ratio of 7.14 is fine compared to the rest of the industry. KHC outperforms 69.23% of its industry peers.
A Debt/Equity ratio of 0.42 indicates that KHC is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.42, KHC is in line with its industry, outperforming 52.75% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 7.14 | ||
| Altman-Z | 1.04 |
ROIC/WACC0.71
WACC6.99%
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.
The Current ratio of KHC (1.31) is worse than 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.
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)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.
The Revenue is expected to grow by 0.23% on average over the next years.
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
The EPS growth rate is stable: in the next years the growth will be about the same 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
With a Price/Earnings ratio of 9.68, the valuation of KHC can be described as very reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of KHC indicates a rather cheap valuation: KHC is cheaper than 83.52% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.53. KHC is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 10.77, the valuation of KHC can be described as very reasonable.
Based on the Price/Forward Earnings ratio, KHC is valued cheaper than 86.81% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of KHC to the average of the S&P500 Index (36.71), we can say KHC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.68 | ||
| Fwd PE | 10.77 |
4.2 Price Multiples
KHC's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. KHC is cheaper than 70.33% of the companies in the same industry.
KHC's Price/Free Cash Flow ratio is rather cheap when compared to the industry. KHC is cheaper than 81.32% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.32 | ||
| EV/EBITDA | 8.38 |
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 -2.61% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)6.76
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.
KHC's Dividend Yield is rather good when compared to the industry average which is at 4.86. KHC pays more dividend than 86.81% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, KHC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.69% |
5.2 History
KHC has paid a dividend for at least 10 years, which is 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%
28.94
+0.16 (+0.56%)
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 Cap34.25B
Analysts54.84
Price Target30.94 (6.91%)
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 | 9.68 | ||
| Fwd PE | 10.77 | ||
| P/S | 1.35 | ||
| P/FCF | 11.32 | ||
| P/OCF | 8.29 | ||
| P/B | 0.69 | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.38 |
EPS(TTM)2.99
EY10.33%
EPS(NY)2.69
Fwd EY9.28%
FCF(TTM)2.56
FCFY8.83%
OCF(TTM)3.49
OCFY12.07%
SpS21.49
BVpS41.79
TBVpS-16.43
PEG (NY)N/A
PEG (5Y)6.76
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
WACC6.99%
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%