LAMB WESTON HOLDINGS INC (LW) Stock Fundamental Analysis
NYSE:LW - New York Stock Exchange, Inc. - US5132721045 - Common Stock - Currency: USD
Taking everything into account, LW scores 5 out of 10 in our fundamental rating. LW was compared to 91 industry peers in the Food Products industry. LW has an average financial health and profitability rating. LW is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year LW was profitable.
LW had a positive operating cash flow in the past year.
In the past 5 years LW has always been profitable.
In the past 5 years LW always reported a positive cash flow from operatings.
1.2 Ratios
LW has a Return On Assets of 4.94%. This is in the better half of the industry: LW outperforms 68.48% of its industry peers.
LW has a better Return On Equity (22.47%) than 92.39% of its industry peers.
LW's Return On Invested Capital of 9.17% is amongst the best of the industry. LW outperforms 80.43% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for LW is significantly below the industry average of 28.11%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.94% | ||
| ROE | 22.47% | ||
| ROIC | 9.17% |
ROA(3y)10.06%
ROA(5y)9.11%
ROE(3y)55.93%
ROE(5y)77.28%
ROIC(3y)11.5%
ROIC(5y)10.81%
1.3 Margins
With a decent Profit Margin value of 5.75%, LW is doing good in the industry, outperforming 73.91% of the companies in the same industry.
LW's Profit Margin has declined in the last couple of years.
LW has a Operating Margin of 12.35%. This is in the better half of the industry: LW outperforms 79.35% of its industry peers.
LW's Operating Margin has been stable in the last couple of years.
LW has a Gross Margin of 22.61%. This is comparable to the rest of the industry: LW outperforms 52.17% of its industry peers.
In the last couple of years the Gross Margin of LW has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.35% | ||
| PM (TTM) | 5.75% | ||
| GM | 22.61% |
OM growth 3Y8.95%
OM growth 5Y-1.27%
PM growth 3Y9.02%
PM growth 5Y-2.07%
GM growth 3Y6.42%
GM growth 5Y0.45%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), LW 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
LW has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.58 indicates that LW is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of LW (2.58) is better than 60.87% of its industry peers.
The Debt to FCF ratio of LW is 77.32, which is on the high side as it means it would take LW, 77.32 years of fcf income to pay off all of its debts.
LW has a Debt to FCF ratio (77.32) which is in line with its industry peers.
A Debt/Equity ratio of 2.55 is on the high side and indicates that LW has dependencies on debt financing.
With a Debt to Equity ratio value of 2.55, LW is not doing good in the industry: 88.04% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.55 | ||
| Debt/FCF | 77.32 | ||
| Altman-Z | 2.58 |
ROIC/WACC1.26
WACC7.26%
2.3 Liquidity
LW has a Current Ratio of 1.35. This is a normal value and indicates that LW is financially healthy and should not expect problems in meeting its short term obligations.
LW's Current ratio of 1.35 is in line compared to the rest of the industry. LW outperforms 43.48% of its industry peers.
LW has a Quick Ratio of 1.35. This is a bad value and indicates that LW is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of LW (0.58) is worse than 69.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.35 | ||
| Quick Ratio | 0.58 |
3. Growth
3.1 Past
LW shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -40.55%.
LW shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.46% yearly.
The Revenue has decreased by -2.49% in the past year.
LW shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.48% yearly.
EPS 1Y (TTM)-40.55%
EPS 3Y32.81%
EPS 5Y9.46%
EPS Q2Q%-8.33%
Revenue 1Y (TTM)-2.49%
Revenue growth 3Y20.78%
Revenue growth 5Y11.48%
Sales Q2Q%4.27%
3.2 Future
Based on estimates for the next years, LW will show a small growth in Earnings Per Share. The EPS will grow by 7.03% on average per year.
The Revenue is expected to grow by 4.18% on average over the next years.
EPS Next Y-36.47%
EPS Next 2Y-16.28%
EPS Next 3Y-7.99%
EPS Next 5Y7.03%
Revenue Next Year-2.95%
Revenue Next 2Y-0.99%
Revenue Next 3Y0.4%
Revenue Next 5Y4.18%
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
LW is valuated correctly with a Price/Earnings ratio of 15.69.
67.39% of the companies in the same industry are more expensive than LW, based on the Price/Earnings ratio.
LW's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.41.
LW is valuated correctly with a Price/Forward Earnings ratio of 14.47.
69.57% of the companies in the same industry are more expensive than LW, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 35.19, LW is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.69 | ||
| Fwd PE | 14.47 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, LW is valued a bit cheaper than 63.04% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as LW.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 131.92 | ||
| EV/EBITDA | 9.2 |
4.3 Compensation for Growth
The decent profitability rating of LW may justify a higher PE ratio.
LW's earnings are expected to decrease with -7.99% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)1.66
EPS Next 2Y-16.28%
EPS Next 3Y-7.99%
5. Dividend
5.1 Amount
LW has a Yearly Dividend Yield of 2.88%.
Compared to an average industry Dividend Yield of 4.72, LW pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.35, LW pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.88% |
5.2 History
The dividend of LW is nicely growing with an annual growth rate of 9.19%!
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)9.19%
Div Incr Years7
Div Non Decr Years7
5.3 Sustainability
LW pays out 56.32% of its income as dividend. 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.
DP56.32%
EPS Next 2Y-16.28%
EPS Next 3Y-7.99%
51.32
-0.06 (-0.12%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners96.55%
Inst Owner Change0.16%
Ins Owners2.36%
Ins Owner Change-0.07%
Market Cap7.24B
Analysts76
Price Target65.01 (26.68%)
Short Float %3.85%
Short Ratio3.11
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.88% |
Yearly Dividend1.2
Dividend Growth(5Y)9.19%
DP56.32%
Div Incr Years7
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-6.9%
Min EPS beat(2)-36.69%
Max EPS beat(2)22.88%
EPS beat(4)1
Avg EPS beat(4)-13.74%
Min EPS beat(4)-39.85%
Max EPS beat(4)22.88%
EPS beat(8)3
Avg EPS beat(8)-1.96%
EPS beat(12)7
Avg EPS beat(12)13.62%
EPS beat(16)10
Avg EPS beat(16)14.21%
Revenue beat(2)0
Avg Revenue beat(2)-4.04%
Min Revenue beat(2)-7.14%
Max Revenue beat(2)-0.94%
Revenue beat(4)1
Avg Revenue beat(4)-3.23%
Min Revenue beat(4)-8.1%
Max Revenue beat(4)3.25%
Revenue beat(8)1
Avg Revenue beat(8)-3.63%
Revenue beat(12)4
Avg Revenue beat(12)-1.24%
Revenue beat(16)5
Avg Revenue beat(16)-1.24%
PT rev (1m)-0.58%
PT rev (3m)-1.54%
EPS NQ rev (1m)-0.84%
EPS NQ rev (3m)-0.84%
EPS NY rev (1m)-0.14%
EPS NY rev (3m)1.33%
Revenue NQ rev (1m)0.12%
Revenue NQ rev (3m)0.12%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.69 | ||
| Fwd PE | 14.47 | ||
| P/S | 1.13 | ||
| P/FCF | 131.92 | ||
| P/OCF | 9.03 | ||
| P/B | 4.43 | ||
| P/tB | 14.28 | ||
| EV/EBITDA | 9.2 |
EPS(TTM)3.27
EY6.37%
EPS(NY)3.55
Fwd EY6.91%
FCF(TTM)0.39
FCFY0.76%
OCF(TTM)5.68
OCFY11.07%
SpS45.26
BVpS11.58
TBVpS3.59
PEG (NY)N/A
PEG (5Y)1.66
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.94% | ||
| ROE | 22.47% | ||
| ROCE | 13.6% | ||
| ROIC | 9.17% | ||
| ROICexc | 9.27% | ||
| ROICexgc | 11.33% | ||
| OM | 12.35% | ||
| PM (TTM) | 5.75% | ||
| GM | 22.61% | ||
| FCFM | 0.86% |
ROA(3y)10.06%
ROA(5y)9.11%
ROE(3y)55.93%
ROE(5y)77.28%
ROIC(3y)11.5%
ROIC(5y)10.81%
ROICexc(3y)12.37%
ROICexc(5y)12.84%
ROICexgc(3y)15.2%
ROICexgc(5y)15.33%
ROCE(3y)16.24%
ROCE(5y)15.46%
ROICexcg growth 3Y4.73%
ROICexcg growth 5Y-5.56%
ROICexc growth 3Y2.18%
ROICexc growth 5Y-7.67%
OM growth 3Y8.95%
OM growth 5Y-1.27%
PM growth 3Y9.02%
PM growth 5Y-2.07%
GM growth 3Y6.42%
GM growth 5Y0.45%
F-Score5
Asset Turnover0.86
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.55 | ||
| Debt/FCF | 77.32 | ||
| Debt/EBITDA | 3.5 | ||
| Cap/Depr | 186.78% | ||
| Cap/Sales | 11.7% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 67.45% | ||
| Profit Quality | 14.96% | ||
| Current Ratio | 1.35 | ||
| Quick Ratio | 0.58 | ||
| Altman-Z | 2.58 |
F-Score5
WACC7.26%
ROIC/WACC1.26
Cap/Depr(3y)271.04%
Cap/Depr(5y)202.57%
Cap/Sales(3y)12.19%
Cap/Sales(5y)9.3%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-40.55%
EPS 3Y32.81%
EPS 5Y9.46%
EPS Q2Q%-8.33%
EPS Next Y-36.47%
EPS Next 2Y-16.28%
EPS Next 3Y-7.99%
EPS Next 5Y7.03%
Revenue 1Y (TTM)-2.49%
Revenue growth 3Y20.78%
Revenue growth 5Y11.48%
Sales Q2Q%4.27%
Revenue Next Year-2.95%
Revenue Next 2Y-0.99%
Revenue Next 3Y0.4%
Revenue Next 5Y4.18%
EBIT growth 1Y-27.06%
EBIT growth 3Y31.59%
EBIT growth 5Y10.06%
EBIT Next Year2.43%
EBIT Next 3Y4.31%
EBIT Next 5Y4.9%
FCF growth 1Y1860.71%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y38.47%
OCF growth 3Y13%
OCF growth 5Y3.23%