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 89 industry peers in the Food Products industry. While LW belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. LW 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 LW was profitable.
In the past year LW had a positive cash flow from operations.
Each year in the past 5 years LW has been profitable.
In the past 5 years LW always reported a positive cash flow from operatings.
1.2 Ratios
LW's Return On Assets of 4.94% is fine compared to the rest of the industry. LW outperforms 67.42% of its industry peers.
The Return On Equity of LW (22.47%) is better than 93.26% of its industry peers.
Looking at the Return On Invested Capital, with a value of 9.17%, LW belongs to the top of the industry, outperforming 83.15% of the companies in the same industry.
LW had an Average Return On Invested Capital over the past 3 years of 11.50%. This is above the industry average of 7.60%.
| 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
The Profit Margin of LW (5.75%) is better than 73.03% of its industry peers.
LW's Profit Margin has declined in the last couple of years.
The Operating Margin of LW (12.35%) is better than 79.78% of its industry peers.
In the last couple of years the Operating Margin of LW has remained more or less at the same level.
With a Gross Margin value of 22.61%, LW perfoms like the industry average, outperforming 51.69% of the companies in the same industry.
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.
Compared to 1 year ago, LW has less shares outstanding
Compared to 5 years ago, LW has less shares outstanding
Compared to 1 year ago, LW has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.65 indicates that LW is not a great score, but indicates only limited risk for bankruptcy at the moment.
LW has a better Altman-Z score (2.65) than 65.17% of its industry peers.
LW has a debt to FCF ratio of 77.32. This is a negative value and a sign of low solvency as LW would need 77.32 years to pay back of all of its debts.
LW has a Debt to FCF ratio (77.32) which is comparable to the rest of the industry.
A Debt/Equity ratio of 2.55 is on the high side and indicates that LW has dependencies on debt financing.
LW has a Debt to Equity ratio of 2.55. This is amonst the worse of the industry: LW underperforms 88.76% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.55 | ||
| Debt/FCF | 77.32 | ||
| Altman-Z | 2.65 |
ROIC/WACC0.98
WACC9.41%
2.3 Liquidity
A Current Ratio of 1.35 indicates that LW should not have too much problems paying its short term obligations.
LW has a Current ratio (1.35) which is in line with its industry peers.
A Quick Ratio of 0.58 indicates that LW may have some problems paying its short term obligations.
The Quick ratio of LW (0.58) is worse than 67.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.35 | ||
| Quick Ratio | 0.58 |
3. Growth
3.1 Past
The earnings per share for LW have decreased strongly by -40.55% in the last year.
LW shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.46% yearly.
Looking at the last year, LW shows a decrease in Revenue. The Revenue has decreased by -2.49% in the last year.
The Revenue has been growing by 11.48% on average over the past years. This is quite good.
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.
LW is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.18% yearly.
EPS Next Y-36.38%
EPS Next 2Y-15.58%
EPS Next 3Y-7.78%
EPS Next 5Y7.03%
Revenue Next Year-2.95%
Revenue Next 2Y-0.85%
Revenue Next 3Y0.46%
Revenue Next 5Y4.18%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 16.76, LW is valued correctly.
61.80% of the companies in the same industry are more expensive than LW, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 26.31. LW is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 15.20, LW is valued correctly.
67.42% of the companies in the same industry are more expensive than LW, based on the Price/Forward Earnings ratio.
LW is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.13, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.76 | ||
| Fwd PE | 15.2 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, LW is valued a bit cheaper than the industry average as 62.92% of the companies are valued more expensively.
LW's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 140.86 | ||
| EV/EBITDA | 9.78 |
4.3 Compensation for Growth
LW has a very decent profitability rating, which may justify a higher PE ratio.
LW's earnings are expected to decrease with -7.78% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)1.77
EPS Next 2Y-15.58%
EPS Next 3Y-7.78%
5. Dividend
5.1 Amount
LW has a Yearly Dividend Yield of 2.68%.
LW's Dividend Yield is a higher than the industry average which is at 4.69.
LW's Dividend Yield is comparable with the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.68% |
5.2 History
On average, the dividend of LW grows each year by 9.19%, 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)9.19%
Div Incr Years7
Div Non Decr Years7
5.3 Sustainability
56.32% of the earnings are spent on dividend by LW. This is a bit on the high side, but may be sustainable.
The dividend of LW is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP56.32%
EPS Next 2Y-15.58%
EPS Next 3Y-7.78%
54.8
-1.48 (-2.63%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners100.67%
Inst Owner Change-5.24%
Ins Owners1.73%
Ins Owner Change0.39%
Market Cap7.73B
Analysts75.24
Price Target65.39 (19.32%)
Short Float %3.32%
Short Ratio2.01
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.68% |
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)-2.29%
PT rev (3m)-4.96%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-21.74%
EPS NY rev (1m)0%
EPS NY rev (3m)1.25%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.27%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)0.14%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.76 | ||
| Fwd PE | 15.2 | ||
| P/S | 1.21 | ||
| P/FCF | 140.86 | ||
| P/OCF | 9.64 | ||
| P/B | 4.73 | ||
| P/tB | 15.25 | ||
| EV/EBITDA | 9.78 |
EPS(TTM)3.27
EY5.97%
EPS(NY)3.61
Fwd EY6.58%
FCF(TTM)0.39
FCFY0.71%
OCF(TTM)5.68
OCFY10.37%
SpS45.26
BVpS11.58
TBVpS3.59
PEG (NY)N/A
PEG (5Y)1.77
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 | 2.65 |
F-Score5
WACC9.41%
ROIC/WACC0.98
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-36.38%
EPS Next 2Y-15.58%
EPS Next 3Y-7.78%
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-0.85%
Revenue Next 3Y0.46%
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%