LAMB WESTON HOLDINGS INC (LW) Stock Fundamental Analysis
USA - NYSE:LW - US5132721045 - Common Stock
56.42 USD
-0.7 (-1.23%)
56.42 USD
0 (0%)
Overall LW gets a fundamental rating of 4 out of 10. We evaluated LW against 88 industry peers in the Food Products industry. LW has a medium profitability rating, but doesn't score so well on its financial health evaluation. LW has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year LW was profitable.
In the past year LW had a positive cash flow from operations.
In the past 5 years LW has always been profitable.
LW had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of LW (4.83%) is better than 69.32% of its industry peers.
LW has a Return On Equity of 20.56%. This is amongst the best in the industry. LW outperforms 89.77% of its industry peers.
LW has a better Return On Invested Capital (9.63%) than 79.55% of its industry peers.
LW had an Average Return On Invested Capital over the past 3 years of 11.49%. This is significantly below the industry average of 28.72%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.83% | ||
| ROE | 20.56% | ||
| ROIC | 9.63% |
ROA(3y)10.05%
ROA(5y)8.51%
ROE(3y)44.21%
ROE(5y)50.9%
ROIC(3y)11.49%
ROIC(5y)10.72%
1.3 Margins
With a decent Profit Margin value of 5.54%, LW is doing good in the industry, outperforming 72.73% of the companies in the same industry.
In the last couple of years the Profit Margin of LW has declined.
Looking at the Operating Margin, with a value of 12.88%, LW is in the better half of the industry, outperforming 78.41% of the companies in the same industry.
In the last couple of years the Operating Margin of LW has declined.
The Gross Margin of LW (22.85%) is comparable to the rest of the industry.
LW's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.88% | ||
| PM (TTM) | 5.54% | ||
| GM | 22.85% |
OM growth 3Y5.39%
OM growth 5Y-2.73%
PM growth 3Y4.15%
PM growth 5Y-10.51%
GM growth 3Y4.02%
GM growth 5Y-0.65%
2. Health
2.1 Basic Checks
LW has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
LW has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, LW has less shares outstanding
The debt/assets ratio for LW is higher compared to a year ago.
2.2 Solvency
LW has an Altman-Z score of 2.72. This is not the best score and indicates that LW is in the grey zone with still only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.72, LW is in the better half of the industry, outperforming 63.64% of the companies in the same industry.
The Debt to FCF ratio of LW is 21.02, which is on the high side as it means it would take LW, 21.02 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of LW (21.02) is comparable to the rest of the industry.
LW has a Debt/Equity ratio of 2.33. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of LW (2.33) is worse than 87.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.33 | ||
| Debt/FCF | 21.02 | ||
| Altman-Z | 2.72 |
ROIC/WACC1.36
WACC7.07%
2.3 Liquidity
LW has a Current Ratio of 1.38. This is a normal value and indicates that LW is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of LW (1.38) is comparable to the rest of the industry.
LW has a Quick Ratio of 1.38. This is a bad value and indicates that LW is not financially healthy enough and could expect problems in meeting its short term obligations.
LW has a Quick ratio of 0.68. This is in the lower half of the industry: LW underperforms 67.05% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.38 | ||
| Quick Ratio | 0.68 |
3. Growth
3.1 Past
LW shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -33.60%.
The Earnings Per Share has been growing slightly by 6.09% on average over the past years.
The Revenue has decreased by -0.25% in the past year.
Measured over the past years, LW shows a quite strong growth in Revenue. The Revenue has been growing by 11.21% on average per year.
EPS 1Y (TTM)-33.6%
EPS 3Y17.33%
EPS 5Y6.09%
EPS Q2Q%11.54%
Revenue 1Y (TTM)-0.25%
Revenue growth 3Y16.32%
Revenue growth 5Y11.21%
Sales Q2Q%3.96%
3.2 Future
The Earnings Per Share is expected to grow by 7.32% on average over the next years.
Based on estimates for the next years, LW will show a small growth in Revenue. The Revenue will grow by 3.29% on average per year.
EPS Next Y-10.7%
EPS Next 2Y1.23%
EPS Next 3Y4.89%
EPS Next 5Y7.32%
Revenue Next Year1.97%
Revenue Next 2Y1.4%
Revenue Next 3Y1.81%
Revenue Next 5Y3.29%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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
A Price/Earnings ratio of 16.79 indicates a correct valuation of LW.
Based on the Price/Earnings ratio, LW is valued a bit cheaper than the industry average as 63.64% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of LW to the average of the S&P500 Index (27.30), we can say LW is valued slightly cheaper.
LW is valuated rather expensively with a Price/Forward Earnings ratio of 18.80.
LW's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. LW is cheaper than 64.77% of the companies in the same industry.
LW's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.73.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.79 | ||
| Fwd PE | 18.8 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of LW indicates a somewhat cheap valuation: LW is cheaper than 62.50% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of LW is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.01 | ||
| EV/EBITDA | 9.41 |
4.3 Compensation for Growth
The decent profitability rating of LW may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.76
EPS Next 2Y1.23%
EPS Next 3Y4.89%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.65%, LW has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.66, LW pays a bit more dividend than its industry peers.
LW's Dividend Yield is comparable with the S&P500 average which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.65% |
5.2 History
On average, the dividend of LW grows each year by 11.99%, which is quite nice.
LW has been paying a dividend for over 5 years, so it has already some track record.
As LW did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)11.99%
Div Incr Years7
Div Non Decr Years7
5.3 Sustainability
57.92% of the earnings are spent on dividend by LW. This is a bit on the high side, but may be sustainable.
LW's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP57.92%
EPS Next 2Y1.23%
EPS Next 3Y4.89%
56.42
-0.7 (-1.23%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners97.7%
Inst Owner Change-9.47%
Ins Owners2.3%
Ins Owner Change0.93%
Market Cap7.86B
Analysts75
Price Target66.14 (17.23%)
Short Float %3.96%
Short Ratio2.45
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.65% |
Yearly Dividend1.46
Dividend Growth(5Y)11.99%
DP57.92%
Div Incr Years7
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)28.1%
Min EPS beat(2)22.88%
Max EPS beat(2)33.32%
EPS beat(4)2
Avg EPS beat(4)4.55%
Min EPS beat(4)-36.69%
Max EPS beat(4)33.32%
EPS beat(8)3
Avg EPS beat(8)0.56%
EPS beat(12)7
Avg EPS beat(12)14.38%
EPS beat(16)10
Avg EPS beat(16)16.25%
Revenue beat(2)1
Avg Revenue beat(2)0.68%
Min Revenue beat(2)-0.94%
Max Revenue beat(2)2.31%
Revenue beat(4)2
Avg Revenue beat(4)-0.63%
Min Revenue beat(4)-7.14%
Max Revenue beat(4)3.25%
Revenue beat(8)2
Avg Revenue beat(8)-3.25%
Revenue beat(12)4
Avg Revenue beat(12)-1.4%
Revenue beat(16)5
Avg Revenue beat(16)-1.46%
PT rev (1m)6.28%
PT rev (3m)-0.11%
EPS NQ rev (1m)1.67%
EPS NQ rev (3m)-28.37%
EPS NY rev (1m)-15.4%
EPS NY rev (3m)-16.79%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.72%
Revenue NY rev (1m)-0.07%
Revenue NY rev (3m)0.77%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.79 | ||
| Fwd PE | 18.8 | ||
| P/S | 1.22 | ||
| P/FCF | 40.01 | ||
| P/OCF | 9.05 | ||
| P/B | 4.52 | ||
| P/tB | 14.74 | ||
| EV/EBITDA | 9.41 |
EPS(TTM)3.36
EY5.96%
EPS(NY)3
Fwd EY5.32%
FCF(TTM)1.41
FCFY2.5%
OCF(TTM)6.23
OCFY11.04%
SpS46.3
BVpS12.47
TBVpS3.83
PEG (NY)N/A
PEG (5Y)2.76
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.83% | ||
| ROE | 20.56% | ||
| ROCE | 14.05% | ||
| ROIC | 9.63% | ||
| ROICexc | 9.74% | ||
| ROICexgc | 12.08% | ||
| OM | 12.88% | ||
| PM (TTM) | 5.54% | ||
| GM | 22.85% | ||
| FCFM | 3.05% |
ROA(3y)10.05%
ROA(5y)8.51%
ROE(3y)44.21%
ROE(5y)50.9%
ROIC(3y)11.49%
ROIC(5y)10.72%
ROICexc(3y)11.82%
ROICexc(5y)11.8%
ROICexgc(3y)14.91%
ROICexgc(5y)14.34%
ROCE(3y)16.55%
ROCE(5y)15.18%
ROICexcg growth 3Y-1.96%
ROICexcg growth 5Y-6.41%
ROICexc growth 3Y-4.75%
ROICexc growth 5Y-7.96%
OM growth 3Y5.39%
OM growth 5Y-2.73%
PM growth 3Y4.15%
PM growth 5Y-10.51%
GM growth 3Y4.02%
GM growth 5Y-0.65%
F-Score5
Asset Turnover0.87
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.33 | ||
| Debt/FCF | 21.02 | ||
| Debt/EBITDA | 3.27 | ||
| Cap/Depr | 164.86% | ||
| Cap/Sales | 10.41% | ||
| Interest Coverage | 3.94 | ||
| Cash Conversion | 70.11% | ||
| Profit Quality | 55.01% | ||
| Current Ratio | 1.38 | ||
| Quick Ratio | 0.68 | ||
| Altman-Z | 2.72 |
F-Score5
WACC7.07%
ROIC/WACC1.36
Cap/Depr(3y)272.82%
Cap/Depr(5y)212.89%
Cap/Sales(3y)13.17%
Cap/Sales(5y)10.29%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-33.6%
EPS 3Y17.33%
EPS 5Y6.09%
EPS Q2Q%11.54%
EPS Next Y-10.7%
EPS Next 2Y1.23%
EPS Next 3Y4.89%
EPS Next 5Y7.32%
Revenue 1Y (TTM)-0.25%
Revenue growth 3Y16.32%
Revenue growth 5Y11.21%
Sales Q2Q%3.96%
Revenue Next Year1.97%
Revenue Next 2Y1.4%
Revenue Next 3Y1.81%
Revenue Next 5Y3.29%
EBIT growth 1Y-22.9%
EBIT growth 3Y22.59%
EBIT growth 5Y8.17%
EBIT Next Year50.41%
EBIT Next 3Y18.34%
EBIT Next 5Y14.66%
FCF growth 1Y201.5%
FCF growth 3Y20.72%
FCF growth 5Y-11.68%
OCF growth 1Y8.78%
OCF growth 3Y27.58%
OCF growth 5Y8.63%