KROGER CO (KR) Stock Fundamental Analysis
NYSE:KR - New York Stock Exchange, Inc. - US5010441013 - Common Stock - Currency: USD
Taking everything into account, KR scores 4 out of 10 in our fundamental rating. KR was compared to 40 industry peers in the Consumer Staples Distribution & Retail industry. While KR is still in line with the averages on profitability rating, there are concerns on its financial health. KR has a valuation in line with the averages, 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.
Each year in the past 5 years KR has been profitable.
KR had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 4.82%, KR is in the better half of the industry, outperforming 65.00% of the companies in the same industry.
KR has a Return On Equity of 28.81%. This is amongst the best in the industry. KR outperforms 82.50% of its industry peers.
KR has a better Return On Invested Capital (8.49%) than 67.50% of its industry peers.
The Average Return On Invested Capital over the past 3 years for KR is in line with the industry average of 8.21%.
| 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's Profit Margin of 1.75% is in line compared to the rest of the industry. KR outperforms 57.50% of its industry peers.
KR's Profit Margin has improved in the last couple of years.
KR has a Operating Margin (2.70%) which is comparable to the rest of the industry.
KR's Operating Margin has improved in the last couple of years.
KR's Gross Margin of 23.01% is in line compared to the rest of the industry. KR outperforms 45.00% of its industry peers.
KR's Gross Margin has been stable in the last couple of years.
| 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.
Compared to 1 year ago, KR has less shares outstanding
Compared to 5 years ago, KR has less shares outstanding
The debt/assets ratio for KR is higher compared to a year ago.
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.
A Debt/Equity ratio of 1.92 is on the high side and indicates that KR has dependencies on debt financing.
The Debt to Equity ratio of KR (1.92) is worse than 82.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.92 | ||
| Debt/FCF | 9.73 | ||
| Altman-Z | N/A |
ROIC/WACC1.2
WACC7.06%
2.3 Liquidity
A Current Ratio of 0.95 indicates that KR may have some problems paying its short term obligations.
With a Current ratio value of 0.95, KR is not doing good in the industry: 70.00% of the companies in the same industry are doing better.
A Quick Ratio of 0.53 indicates that KR may have some problems paying its short term obligations.
The Quick ratio of KR (0.53) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.95 | ||
| Quick Ratio | 0.53 |
3. Growth
3.1 Past
The earnings per share for KR have decreased by -2.99% in the last year.
The Earnings Per Share has been growing by 15.28% on average over the past years. This is quite good.
The Revenue has decreased by -2.11% in the past year.
The Revenue has been growing slightly by 3.77% on average over the past years.
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
The Earnings Per Share is expected to grow by 6.14% on average over the next years.
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 Year0.79%
Revenue Next 2Y1.8%
Revenue Next 3Y2.04%
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
KR is valuated correctly with a Price/Earnings ratio of 15.49.
Based on the Price/Earnings ratio, KR is valued a bit cheaper than 70.00% of the companies in the same industry.
KR is valuated rather cheaply when we compare the Price/Earnings ratio to 27.11, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 12.95, the valuation of KR can be described as correct.
Compared to the rest of the industry, the Price/Forward Earnings ratio of KR indicates a rather cheap valuation: KR is cheaper than 82.50% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 35.78. KR is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.49 | ||
| Fwd PE | 12.95 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of KR indicates a somewhat cheap valuation: KR is cheaper than 67.50% of the companies listed in the same industry.
KR's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.22 | ||
| EV/EBITDA | 8.48 |
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)1.57
PEG (5Y)1.01
EPS Next 2Y10.09%
EPS Next 3Y8.75%
5. Dividend
5.1 Amount
KR has a Yearly Dividend Yield of 1.90%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.03, KR pays a bit more dividend than its industry peers.
KR's Dividend Yield is slightly below the S&P500 average, which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.9% |
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.
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.
The dividend of KR is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP34.45%
EPS Next 2Y10.09%
EPS Next 3Y8.75%
70.33
-3.22 (-4.38%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupConsumer Staples Distribution & Retail
GICS IndustryConsumer Staples Distribution & Retail
Earnings (Last)
Earnings (Next)
Inst Owners81.7%
Inst Owner Change-0.62%
Ins Owners0.26%
Ins Owner Change0.14%
Market Cap46.50B
Analysts76.97
Price Target77.15 (9.7%)
Short Float %5.33%
Short Ratio4.41
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.9% |
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)7.81%
PT rev (3m)11.31%
EPS NQ rev (1m)-0.27%
EPS NQ rev (3m)0.42%
EPS NY rev (1m)0%
EPS NY rev (3m)0.69%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.1%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)-0.5%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.49 | ||
| Fwd PE | 12.95 | ||
| P/S | 0.32 | ||
| P/FCF | 25.22 | ||
| P/OCF | 8.3 | ||
| P/B | 5.22 | ||
| P/tB | 8.61 | ||
| EV/EBITDA | 8.48 |
EPS(TTM)4.54
EY6.46%
EPS(NY)5.43
Fwd EY7.72%
FCF(TTM)2.79
FCFY3.97%
OCF(TTM)8.47
OCFY12.05%
SpS222.29
BVpS13.47
TBVpS8.16
PEG (NY)1.57
PEG (5Y)1.01
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
WACC7.06%
ROIC/WACC1.2
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 Year0.79%
Revenue Next 2Y1.8%
Revenue Next 3Y2.04%
Revenue Next 5Y2.37%
EBIT growth 1Y32.94%
EBIT growth 3Y3.68%
EBIT growth 5Y10.25%
EBIT Next Year79.84%
EBIT Next 3Y24.12%
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%