KROGER CO (KR) Stock Fundamental Analysis
NYSE:KR - New York Stock Exchange, Inc. - US5010441013 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to KR. KR was compared to 41 industry peers in the Consumer Staples Distribution & Retail industry. While KR has a great profitability rating, there are quite some concerns on its financial health. KR is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year KR was profitable.
KR had a positive operating cash flow in the past year.
KR had positive earnings in each of the past 5 years.
KR had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of KR (5.03%) is better than 65.85% of its industry peers.
KR has a better Return On Equity (31.94%) than 90.24% of its industry peers.
Looking at the Return On Invested Capital, with a value of 8.42%, KR is in the better half of the industry, outperforming 65.85% of the companies in the same industry.
KR had an Average Return On Invested Capital over the past 3 years of 8.58%. This is in line with the industry average of 7.94%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.03% | ||
| ROE | 31.94% | ||
| ROIC | 8.42% |
ROA(3y)4.59%
ROA(5y)4.47%
ROE(3y)24.18%
ROE(5y)23.32%
ROIC(3y)8.58%
ROIC(5y)8.18%
1.3 Margins
KR has a better Profit Margin (1.80%) than 60.98% of its industry peers.
In the last couple of years the Profit Margin of KR has grown nicely.
The Operating Margin of KR (2.68%) is better than 60.98% of its industry peers.
In the last couple of years the Operating Margin of KR has grown nicely.
KR's Gross Margin of 22.70% is in line compared to the rest of the industry. KR outperforms 43.90% of its industry peers.
In the last couple of years the Gross Margin of KR has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 2.68% | ||
| PM (TTM) | 1.8% | ||
| GM | 22.7% |
OM growth 3Y1.47%
OM growth 5Y6.25%
PM growth 3Y14.79%
PM growth 5Y6.04%
GM growth 3Y1.13%
GM growth 5Y0.63%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), KR is destroying value.
The number of shares outstanding for KR has been reduced compared to 1 year ago.
KR has less shares outstanding than it did 5 years ago.
KR has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.39 indicates that KR is not in any danger for bankruptcy at the moment.
With a Altman-Z score value of 4.39, KR perfoms like the industry average, outperforming 58.54% of the companies in the same industry.
KR has a debt to FCF ratio of 10.08. This is a negative value and a sign of low solvency as KR would need 10.08 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 10.08, KR is in line with its industry, outperforming 51.22% of the companies in the same industry.
A Debt/Equity ratio of 2.13 is on the high side and indicates that KR has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 2.13, KR is doing worse than 87.80% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.13 | ||
| Debt/FCF | 10.08 | ||
| Altman-Z | 4.39 |
ROIC/WACC0.68
WACC12.31%
2.3 Liquidity
A Current Ratio of 0.96 indicates that KR may have some problems paying its short term obligations.
KR's Current ratio of 0.96 is on the low side compared to the rest of the industry. KR is outperformed by 68.29% of its industry peers.
KR has a Quick Ratio of 0.96. This is a bad value and indicates that KR is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of KR (0.52) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.96 | ||
| Quick Ratio | 0.52 |
3. Growth
3.1 Past
KR shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -5.88%.
Measured over the past years, KR shows a quite strong growth in Earnings Per Share. The EPS has been growing by 15.28% on average per year.
Looking at the last year, KR shows a decrease in Revenue. The Revenue has decreased by -1.94% in the last year.
KR shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.77% yearly.
EPS 1Y (TTM)-5.88%
EPS 3Y6.78%
EPS 5Y15.28%
EPS Q2Q%-14.93%
Revenue 1Y (TTM)-1.94%
Revenue growth 3Y2.18%
Revenue growth 5Y3.77%
Sales Q2Q%-7.44%
3.2 Future
Based on estimates for the next years, KR will show a small growth in Earnings Per Share. The EPS will grow by 6.05% on average per year.
Based on estimates for the next years, KR will show a small growth in Revenue. The Revenue will grow by 2.26% on average per year.
EPS Next Y9.25%
EPS Next 2Y8.99%
EPS Next 3Y8.45%
EPS Next 5Y6.05%
Revenue Next Year1.33%
Revenue Next 2Y2%
Revenue Next 3Y2.16%
Revenue Next 5Y2.26%
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 decreasing.
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
A Price/Earnings ratio of 14.62 indicates a correct valuation of KR.
Compared to the rest of the industry, the Price/Earnings ratio of KR indicates a somewhat cheap valuation: KR is cheaper than 73.17% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of KR to the average of the S&P500 Index (26.53), we can say KR is valued slightly cheaper.
KR is valuated correctly with a Price/Forward Earnings ratio of 13.38.
Based on the Price/Forward Earnings ratio, KR is valued cheaply inside the industry as 82.93% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.27, KR is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.62 | ||
| Fwd PE | 13.38 |
4.2 Price Multiples
68.29% of the companies in the same industry are more expensive than KR, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of KR is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.54 | ||
| EV/EBITDA | 8.06 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
KR has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.58
PEG (5Y)0.96
EPS Next 2Y8.99%
EPS Next 3Y8.45%
5. Dividend
5.1 Amount
KR has a Yearly Dividend Yield of 1.93%. Purely for dividend investing, there may be better candidates out there.
KR's Dividend Yield is rather good when compared to the industry average which is at 2.18. KR pays more dividend than 80.49% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.39, KR has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.93% |
5.2 History
On average, the dividend of KR grows each year by 15.86%, which is quite nice.
KR has been paying a dividend for at least 10 years, so it has a reliable track record.
KR has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)15.86%
Div Incr Years5
Div Non Decr Years5
5.3 Sustainability
33.37% of the earnings are spent on dividend by KR. This is a low number and sustainable payout ratio.
KR's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP33.37%
EPS Next 2Y8.99%
EPS Next 3Y8.45%
65.49
-0.66 (-1%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupConsumer Staples Distribution & Retail
GICS IndustryConsumer Staples Distribution & Retail
Earnings (Last)
Earnings (Next)
Inst Owners76.31%
Inst Owner Change-1.62%
Ins Owners0.73%
Ins Owner Change0.39%
Market Cap43.61B
Analysts76.97
Price Target71.62 (9.36%)
Short Float %6.05%
Short Ratio4.56
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.93% |
Yearly Dividend1.28
Dividend Growth(5Y)15.86%
DP33.37%
Div Incr Years5
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.67%
Min EPS beat(2)-2.62%
Max EPS beat(2)-0.72%
EPS beat(4)1
Avg EPS beat(4)-0.34%
Min EPS beat(4)-2.62%
Max EPS beat(4)2.98%
EPS beat(8)5
Avg EPS beat(8)2.2%
EPS beat(12)9
Avg EPS beat(12)3.6%
EPS beat(16)13
Avg EPS beat(16)7.05%
Revenue beat(2)0
Avg Revenue beat(2)-4.01%
Min Revenue beat(2)-4.53%
Max Revenue beat(2)-3.48%
Revenue beat(4)0
Avg Revenue beat(4)-3.47%
Min Revenue beat(4)-4.53%
Max Revenue beat(4)-2.46%
Revenue beat(8)0
Avg Revenue beat(8)-3.3%
Revenue beat(12)0
Avg Revenue beat(12)-3.04%
Revenue beat(16)2
Avg Revenue beat(16)-2.42%
PT rev (1m)3.33%
PT rev (3m)5.22%
EPS NQ rev (1m)-0.19%
EPS NQ rev (3m)-6.19%
EPS NY rev (1m)0.14%
EPS NY rev (3m)-0.49%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.25%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)0.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.62 | ||
| Fwd PE | 13.38 | ||
| P/S | 0.3 | ||
| P/FCF | 24.54 | ||
| P/OCF | 7.53 | ||
| P/B | 5.26 | ||
| P/tB | 9.13 | ||
| EV/EBITDA | 8.06 |
EPS(TTM)4.48
EY6.84%
EPS(NY)4.89
Fwd EY7.47%
FCF(TTM)2.67
FCFY4.08%
OCF(TTM)8.7
OCFY13.29%
SpS220.96
BVpS12.44
TBVpS7.17
PEG (NY)1.58
PEG (5Y)0.96
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.03% | ||
| ROE | 31.94% | ||
| ROCE | 10.76% | ||
| ROIC | 8.42% | ||
| ROICexc | 9.44% | ||
| ROICexgc | 10.57% | ||
| OM | 2.68% | ||
| PM (TTM) | 1.8% | ||
| GM | 22.7% | ||
| FCFM | 1.21% |
ROA(3y)4.59%
ROA(5y)4.47%
ROE(3y)24.18%
ROE(5y)23.32%
ROIC(3y)8.58%
ROIC(5y)8.18%
ROICexc(3y)9.17%
ROICexc(5y)8.7%
ROICexgc(3y)10.36%
ROICexgc(5y)9.89%
ROCE(3y)10.97%
ROCE(5y)10.45%
ROICexcg growth 3Y0.91%
ROICexcg growth 5Y8.1%
ROICexc growth 3Y1.77%
ROICexc growth 5Y8.8%
OM growth 3Y1.47%
OM growth 5Y6.25%
PM growth 3Y14.79%
PM growth 5Y6.04%
GM growth 3Y1.13%
GM growth 5Y0.63%
F-Score7
Asset Turnover2.8
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.13 | ||
| Debt/FCF | 10.08 | ||
| Debt/EBITDA | 2.45 | ||
| Cap/Depr | 123.75% | ||
| Cap/Sales | 2.73% | ||
| Interest Coverage | 15.66 | ||
| Cash Conversion | 80.55% | ||
| Profit Quality | 67.16% | ||
| Current Ratio | 0.96 | ||
| Quick Ratio | 0.52 | ||
| Altman-Z | 4.39 |
F-Score7
WACC12.31%
ROIC/WACC0.68
Cap/Depr(3y)117.5%
Cap/Depr(5y)109.87%
Cap/Sales(3y)2.47%
Cap/Sales(5y)2.29%
Profit Quality(3y)88.47%
Profit Quality(5y)127.63%
High Growth Momentum
Growth
EPS 1Y (TTM)-5.88%
EPS 3Y6.78%
EPS 5Y15.28%
EPS Q2Q%-14.93%
EPS Next Y9.25%
EPS Next 2Y8.99%
EPS Next 3Y8.45%
EPS Next 5Y6.05%
Revenue 1Y (TTM)-1.94%
Revenue growth 3Y2.18%
Revenue growth 5Y3.77%
Sales Q2Q%-7.44%
Revenue Next Year1.33%
Revenue Next 2Y2%
Revenue Next 3Y2.16%
Revenue Next 5Y2.26%
EBIT growth 1Y24.67%
EBIT growth 3Y3.68%
EBIT growth 5Y10.25%
EBIT Next Year78.42%
EBIT Next 3Y24.27%
EBIT Next 5Y14.21%
FCF growth 1Y-38.38%
FCF growth 3Y-20.79%
FCF growth 5Y2.96%
OCF growth 1Y-14.64%
OCF growth 3Y-2.18%
OCF growth 5Y4.43%