KROGER CO (KR) Stock Fundamental Analysis
NYSE:KR - New York Stock Exchange, Inc. - US5010441013 - Common Stock - Currency: USD
KR gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 40 industry peers in the Consumer Staples Distribution & Retail industry. There are concerns on the financial health of KR while its profitability can be described as average. KR has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
KR had positive earnings in the past year.
KR had a positive operating cash flow in the past year.
KR had positive earnings in each of the past 5 years.
Each year in the past 5 years KR had a positive operating cash flow.
1.2 Ratios
KR's Return On Assets of 4.82% is fine compared to the rest of the industry. KR outperforms 65.00% of its industry peers.
The Return On Equity of KR (28.81%) is better than 85.00% of its industry peers.
The Return On Invested Capital of KR (8.49%) is better than 65.00% of its industry peers.
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 8.23%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.82% | ||
| ROE | 28.81% | ||
| ROIC | 8.49% |
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 Profit Margin (1.75%) which is in line with its industry peers.
In the last couple of years the Profit Margin of KR has grown nicely.
KR has a Operating Margin of 2.70%. This is comparable to the rest of the industry: KR outperforms 60.00% of its industry peers.
KR's Operating Margin has improved in the last couple of years.
With a Gross Margin value of 23.01%, KR perfoms like the industry average, outperforming 45.00% of the companies in the same industry.
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 | 2.7% | ||
| PM (TTM) | 1.75% | ||
| GM | 23.01% |
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) just above the Cost of Capital (WACC), KR is creating some value.
The number of shares outstanding for KR has been reduced compared to 1 year ago.
The number of shares outstanding for KR has been reduced compared to 5 years ago.
KR has a worse debt/assets ratio than last year.
2.2 Solvency
The Debt to FCF ratio of KR is 9.73, which is on the high side as it means it would take KR, 9.73 years of fcf income to pay off all of its debts.
KR has a Debt to FCF ratio (9.73) which is comparable to the rest of the industry.
KR has a Debt/Equity ratio of 1.92. This is a high value indicating a heavy dependency on external financing.
KR has a Debt to Equity ratio of 1.92. This is amonst the worse of the industry: KR underperforms 85.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.92 | ||
| Debt/FCF | 9.73 | ||
| Altman-Z | N/A |
ROIC/WACC1.18
WACC7.2%
2.3 Liquidity
KR has a Current Ratio of 0.95. This is a bad value and indicates that KR is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.95, KR is doing worse than 70.00% of the companies in the same industry.
A Quick Ratio of 0.53 indicates that KR may have some problems paying its short term obligations.
KR has a Quick ratio (0.53) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.95 | ||
| Quick Ratio | 0.53 |
3. Growth
3.1 Past
KR shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.99%.
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.
KR shows a decrease in Revenue. In the last year, the revenue decreased by -2.11%.
Measured over the past years, KR shows a small growth in Revenue. The Revenue has been growing by 3.77% on average per year.
EPS 1Y (TTM)-2.99%
EPS 3Y6.78%
EPS 5Y15.28%
EPS Q2Q%4.2%
Revenue 1Y (TTM)-2.11%
Revenue growth 3Y2.18%
Revenue growth 5Y3.77%
Sales Q2Q%-0.33%
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 6.14% on average per year.
KR is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.37% yearly.
EPS Next Y9.85%
EPS Next 2Y10.09%
EPS Next 3Y8.75%
EPS Next 5Y6.14%
Revenue Next Year0.82%
Revenue Next 2Y1.82%
Revenue Next 3Y2.05%
Revenue Next 5Y2.37%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
KR is valuated correctly with a Price/Earnings ratio of 15.72.
Based on the Price/Earnings ratio, KR is valued a bit cheaper than 72.50% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.54, KR is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 13.15, the valuation of KR can be described as correct.
KR's Price/Forward Earnings ratio is rather cheap when compared to the industry. KR is cheaper than 85.00% of the companies in the same industry.
KR's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 36.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.72 | ||
| Fwd PE | 13.15 |
4.2 Price Multiples
65.00% of the companies in the same industry are more expensive than KR, based on the Enterprise Value to EBITDA ratio.
The rest of the industry has a similar Price/Free Cash Flow ratio as KR.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.6 | ||
| EV/EBITDA | 8.28 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of KR may justify a higher PE ratio.
PEG (NY)1.6
PEG (5Y)1.03
EPS Next 2Y10.09%
EPS Next 3Y8.75%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.94%, KR has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.05, KR pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.35, KR has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.94% |
5.2 History
The dividend of KR is nicely growing with an annual growth rate of 15.86%!
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
KR pays out 34.45% of its income as dividend. This is a sustainable payout ratio.
KR's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP34.45%
EPS Next 2Y10.09%
EPS Next 3Y8.75%
71.39
-0.83 (-1.15%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupConsumer Staples Distribution & Retail
GICS IndustryConsumer Staples Distribution & Retail
Earnings (Last)
Earnings (Next)
Inst Owners81.01%
Inst Owner Change0.02%
Ins Owners0.28%
Ins Owner Change0.14%
Market Cap47.20B
Analysts77.5
Price Target77.13 (8.04%)
Short Float %5.17%
Short Ratio4.2
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.94% |
Yearly Dividend1.28
Dividend Growth(5Y)15.86%
DP34.45%
Div Incr Years5
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-0.81%
Min EPS beat(2)-0.91%
Max EPS beat(2)-0.72%
EPS beat(4)0
Avg EPS beat(4)-1.31%
Min EPS beat(4)-2.62%
Max EPS beat(4)-0.72%
EPS beat(8)4
Avg EPS beat(8)2.04%
EPS beat(12)8
Avg EPS beat(12)2.82%
EPS beat(16)12
Avg EPS beat(16)6.09%
Revenue beat(2)0
Avg Revenue beat(2)-3.27%
Min Revenue beat(2)-3.48%
Max Revenue beat(2)-3.06%
Revenue beat(4)0
Avg Revenue beat(4)-3.62%
Min Revenue beat(4)-4.53%
Max Revenue beat(4)-3.06%
Revenue beat(8)0
Avg Revenue beat(8)-3.3%
Revenue beat(12)0
Avg Revenue beat(12)-3.12%
Revenue beat(16)1
Avg Revenue beat(16)-2.66%
PT rev (1m)7.78%
PT rev (3m)11.98%
EPS NQ rev (1m)0.13%
EPS NQ rev (3m)0.69%
EPS NY rev (1m)0.72%
EPS NY rev (3m)0.69%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)-0.1%
Revenue NY rev (1m)-0.39%
Revenue NY rev (3m)-0.47%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.72 | ||
| Fwd PE | 13.15 | ||
| P/S | 0.32 | ||
| P/FCF | 25.6 | ||
| P/OCF | 8.43 | ||
| P/B | 5.3 | ||
| P/tB | 8.74 | ||
| EV/EBITDA | 8.28 |
EPS(TTM)4.54
EY6.36%
EPS(NY)5.43
Fwd EY7.61%
FCF(TTM)2.79
FCFY3.91%
OCF(TTM)8.47
OCFY11.87%
SpS222.29
BVpS13.47
TBVpS8.16
PEG (NY)1.6
PEG (5Y)1.03
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.82% | ||
| ROE | 28.81% | ||
| ROCE | 10.85% | ||
| ROIC | 8.49% | ||
| ROICexc | 9.75% | ||
| ROICexgc | 10.96% | ||
| OM | 2.7% | ||
| PM (TTM) | 1.75% | ||
| GM | 23.01% | ||
| FCFM | 1.25% |
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)9.19%
ROICexc(5y)8.71%
ROICexgc(3y)10.39%
ROICexgc(5y)9.91%
ROCE(3y)10.97%
ROCE(5y)10.45%
ROICexcg growth 3Y1.16%
ROICexcg growth 5Y8.26%
ROICexc growth 3Y2%
ROICexc growth 5Y8.94%
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 Turnover2.76
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.92 | ||
| Debt/FCF | 9.73 | ||
| Debt/EBITDA | 2.35 | ||
| Cap/Depr | 113.2% | ||
| Cap/Sales | 2.56% | ||
| Interest Coverage | 8.81 | ||
| Cash Conversion | 76.79% | ||
| Profit Quality | 71.86% | ||
| Current Ratio | 0.95 | ||
| Quick Ratio | 0.53 | ||
| Altman-Z | N/A |
F-Score7
WACC7.2%
ROIC/WACC1.18
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)-2.99%
EPS 3Y6.78%
EPS 5Y15.28%
EPS Q2Q%4.2%
EPS Next Y9.85%
EPS Next 2Y10.09%
EPS Next 3Y8.75%
EPS Next 5Y6.14%
Revenue 1Y (TTM)-2.11%
Revenue growth 3Y2.18%
Revenue growth 5Y3.77%
Sales Q2Q%-0.33%
Revenue Next Year0.82%
Revenue Next 2Y1.82%
Revenue Next 3Y2.05%
Revenue Next 5Y2.37%
EBIT growth 1Y32.94%
EBIT growth 3Y3.68%
EBIT growth 5Y10.25%
EBIT Next Year78.42%
EBIT Next 3Y24.37%
EBIT Next 5Y14.42%
FCF growth 1Y-36.3%
FCF growth 3Y-20.79%
FCF growth 5Y2.96%
OCF growth 1Y-10.47%
OCF growth 3Y-2.18%
OCF growth 5Y4.43%