KROGER CO (KR) Stock Fundamental Analysis
NYSE:KR - New York Stock Exchange, Inc. - US5010441013 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to KR. KR was compared to 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.
In the past 5 years KR has always been profitable.
In the past 5 years KR always reported a positive cash flow from operatings.
1.2 Ratios
KR's Return On Assets of 5.03% is fine compared to the rest of the industry. KR outperforms 65.00% of its industry peers.
The Return On Equity of KR (31.94%) is better than 90.00% 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 65.00% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for KR is in line with the industry average of 8.23%.
| 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
Looking at the Profit Margin, with a value of 1.80%, KR is in line with its industry, outperforming 60.00% of the companies in the same industry.
KR's Profit Margin has improved in the last couple of years.
KR has a Operating Margin of 2.68%. 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.
KR has a Gross Margin of 22.70%. This is comparable to the rest of the industry: KR outperforms 45.00% 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) just above the Cost of Capital (WACC), KR is creating some value.
KR has less shares outstanding than it did 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
KR has an Altman-Z score of 4.44. This indicates that KR is financially healthy and has little risk of bankruptcy at the moment.
KR has a Altman-Z score (4.44) which is comparable to the rest of the 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.
KR's Debt to FCF ratio of 10.08 is in line compared to the rest of the industry. KR outperforms 47.50% of its industry peers.
A Debt/Equity ratio of 2.13 is on the high side and indicates that KR has dependencies on debt financing.
With a Debt to Equity ratio value of 2.13, KR is not doing good in the industry: 87.50% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.13 | ||
| Debt/FCF | 10.08 | ||
| Altman-Z | 4.44 |
ROIC/WACC1.19
WACC7.1%
2.3 Liquidity
KR has a Current 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.
KR has a worse Current ratio (0.96) than 67.50% of its industry peers.
A Quick Ratio of 0.52 indicates that KR may have some problems paying 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
The earnings per share for KR have decreased by -5.88% in the last year.
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 -1.94%.
The Revenue has been growing slightly by 3.77% on average over the past years.
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 6.14% on average per year.
Based on estimates for the next years, KR will show a small growth in Revenue. The Revenue will grow by 2.37% on average per year.
EPS Next Y9.07%
EPS Next 2Y9.11%
EPS Next 3Y8.75%
EPS Next 5Y6.14%
Revenue Next Year1.21%
Revenue Next 2Y1.97%
Revenue Next 3Y2.08%
Revenue Next 5Y2.37%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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
With a Price/Earnings ratio of 15.94, KR is valued correctly.
Based on the Price/Earnings ratio, KR is valued a bit cheaper than 70.00% of the companies in the same industry.
KR's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.98.
With a Price/Forward Earnings ratio of 14.62, KR is valued correctly.
Based on the Price/Forward Earnings ratio, KR is valued a bit cheaper than the industry average as 80.00% of the companies are valued more expensively.
KR is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.49, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.94 | ||
| Fwd PE | 14.62 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, KR is valued a bit cheaper than 62.50% of the companies in the same industry.
KR's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.76 | ||
| EV/EBITDA | 8.52 |
4.3 Compensation for Growth
KR's 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)1.76
PEG (5Y)1.04
EPS Next 2Y9.11%
EPS Next 3Y8.75%
5. Dividend
5.1 Amount
KR has a Yearly Dividend Yield of 1.96%. Purely for dividend investing, there may be better candidates out there.
KR's Dividend Yield is a higher than the industry average which is at 2.08.
KR's Dividend Yield is comparable with the S&P500 average which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.96% |
5.2 History
The dividend of KR is nicely growing with an annual growth rate of 15.86%!
KR has paid a dividend for at least 10 years, which is a reliable track record.
As KR did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)15.86%
Div Incr Years5
Div Non Decr Years5
5.3 Sustainability
KR pays out 33.37% 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.
DP33.37%
EPS Next 2Y9.11%
EPS Next 3Y8.75%
71.42
+0.14 (+0.2%)
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 Change-1.62%
Ins Owners0.28%
Ins Owner Change0.64%
Market Cap47.56B
Analysts76.97
Price Target71.57 (0.21%)
Short Float %5.5%
Short Ratio4.19
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.96% |
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)3.25%
PT rev (3m)4.98%
EPS NQ rev (1m)0.04%
EPS NQ rev (3m)0.17%
EPS NY rev (1m)-0.16%
EPS NY rev (3m)-0.65%
Revenue NQ rev (1m)-0.16%
Revenue NQ rev (3m)-0.23%
Revenue NY rev (1m)-0.1%
Revenue NY rev (3m)0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.94 | ||
| Fwd PE | 14.62 | ||
| P/S | 0.32 | ||
| P/FCF | 26.76 | ||
| P/OCF | 8.21 | ||
| P/B | 5.74 | ||
| P/tB | 9.95 | ||
| EV/EBITDA | 8.52 |
EPS(TTM)4.48
EY6.27%
EPS(NY)4.89
Fwd EY6.84%
FCF(TTM)2.67
FCFY3.74%
OCF(TTM)8.7
OCFY12.18%
SpS220.96
BVpS12.44
TBVpS7.17
PEG (NY)1.76
PEG (5Y)1.04
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.03% | ||
| ROE | 31.94% | ||
| ROCE | 10.76% | ||
| ROIC | 8.42% | ||
| ROICexc | 9.5% | ||
| ROICexgc | 10.65% | ||
| 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)9.19%
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 Turnover2.8
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 | 4.44 |
F-Score7
WACC7.1%
ROIC/WACC1.19
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 Y9.07%
EPS Next 2Y9.11%
EPS Next 3Y8.75%
EPS Next 5Y6.14%
Revenue 1Y (TTM)-1.94%
Revenue growth 3Y2.18%
Revenue growth 5Y3.77%
Sales Q2Q%-7.44%
Revenue Next Year1.21%
Revenue Next 2Y1.97%
Revenue Next 3Y2.08%
Revenue Next 5Y2.37%
EBIT growth 1Y24.67%
EBIT growth 3Y3.68%
EBIT growth 5Y10.25%
EBIT Next Year78.42%
EBIT Next 3Y24.37%
EBIT Next 5Y14.42%
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%