CONSTELLATION BRANDS INC-A (STZ) Stock Fundamental Analysis
NYSE:STZ - New York Stock Exchange, Inc. - US21036P1084 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to STZ. STZ was compared to 33 industry peers in the Beverages industry. STZ has an average financial health and profitability rating. STZ is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year STZ was profitable.
In the past year STZ had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: STZ reported negative net income in multiple years.
STZ had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
STZ has a Return On Assets of -0.38%. This is in the lower half of the industry: STZ underperforms 75.76% of its industry peers.
STZ has a worse Return On Equity (-1.18%) than 75.76% of its industry peers.
STZ has a Return On Invested Capital of 15.10%. This is amongst the best in the industry. STZ outperforms 81.82% of its industry peers.
STZ had an Average Return On Invested Capital over the past 3 years of 12.24%. This is in line with the industry average of 11.37%.
The last Return On Invested Capital (15.10%) for STZ is above the 3 year average (12.24%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.38% | ||
| ROE | -1.18% | ||
| ROIC | 15.1% |
ROA(3y)2.02%
ROA(5y)2.65%
ROE(3y)5.23%
ROE(5y)6.01%
ROIC(3y)12.24%
ROIC(5y)11.12%
1.3 Margins
STZ's Operating Margin of 34.30% is amongst the best of the industry. STZ outperforms 100.00% of its industry peers.
In the last couple of years the Operating Margin of STZ has grown nicely.
STZ has a Gross Margin of 52.26%. This is in the better half of the industry: STZ outperforms 66.67% of its industry peers.
STZ's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 34.3% | ||
| PM (TTM) | N/A | ||
| GM | 52.26% |
OM growth 3Y0.41%
OM growth 5Y2.07%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.64%
GM growth 5Y0.98%
2. Health
2.1 Basic Checks
STZ has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
STZ has less shares outstanding than it did 1 year ago.
The number of shares outstanding for STZ has been reduced compared to 5 years ago.
The debt/assets ratio for STZ is higher compared to a year ago.
2.2 Solvency
STZ has an Altman-Z score of 3.03. This indicates that STZ is financially healthy and has little risk of bankruptcy at the moment.
STZ has a Altman-Z score of 3.03. This is in the better half of the industry: STZ outperforms 60.61% of its industry peers.
STZ has a debt to FCF ratio of 5.93. This is a neutral value as STZ would need 5.93 years to pay back of all of its debts.
The Debt to FCF ratio of STZ (5.93) is better than 60.61% of its industry peers.
STZ has a Debt/Equity ratio of 1.47. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.47, STZ is not doing good in the industry: 75.76% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.47 | ||
| Debt/FCF | 5.93 | ||
| Altman-Z | 3.03 |
ROIC/WACC1.59
WACC9.5%
2.3 Liquidity
STZ has a Current Ratio of 0.92. This is a bad value and indicates that STZ is not financially healthy enough and could expect problems in meeting its short term obligations.
STZ's Current ratio of 0.92 is on the low side compared to the rest of the industry. STZ is outperformed by 66.67% of its industry peers.
A Quick Ratio of 0.56 indicates that STZ may have some problems paying its short term obligations.
STZ has a Quick ratio of 0.56. This is in the lower half of the industry: STZ underperforms 72.73% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.92 | ||
| Quick Ratio | 0.56 |
3. Growth
3.1 Past
STZ shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 14.18%, which is quite good.
Measured over the past years, STZ shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.57% on average per year.
Looking at the last year, STZ shows a small growth in Revenue. The Revenue has grown by 2.48% in the last year.
The Revenue has been growing slightly by 4.12% on average over the past years.
EPS 1Y (TTM)14.18%
EPS 3Y10.52%
EPS 5Y8.57%
EPS Q2Q%16.37%
Revenue 1Y (TTM)2.48%
Revenue growth 3Y4.99%
Revenue growth 5Y4.12%
Sales Q2Q%1.17%
3.2 Future
The Earnings Per Share is expected to grow by 5.65% on average over the next years.
Based on estimates for the next years, STZ will show a small growth in Revenue. The Revenue will grow by 2.72% on average per year.
EPS Next Y-6.57%
EPS Next 2Y0.85%
EPS Next 3Y1.82%
EPS Next 5Y5.65%
Revenue Next Year-6.51%
Revenue Next 2Y-2.64%
Revenue Next 3Y-0.99%
Revenue Next 5Y2.72%
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.
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
Based on the Price/Earnings ratio of 11.97, the valuation of STZ can be described as reasonable.
84.85% of the companies in the same industry are more expensive than STZ, based on the Price/Earnings ratio.
STZ is valuated cheaply when we compare the Price/Earnings ratio to 26.31, which is the current average of the S&P500 Index.
STZ is valuated correctly with a Price/Forward Earnings ratio of 12.82.
84.85% of the companies in the same industry are more expensive than STZ, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 22.13. STZ is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.97 | ||
| Fwd PE | 12.82 |
4.2 Price Multiples
STZ's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. STZ is cheaper than 72.73% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, STZ is valued a bit cheaper than 78.79% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.14 | ||
| EV/EBITDA | 10.35 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)1.4
EPS Next 2Y0.85%
EPS Next 3Y1.82%
5. Dividend
5.1 Amount
STZ has a Yearly Dividend Yield of 2.39%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.02, STZ pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.39, STZ has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.39% |
5.2 History
The dividend of STZ is nicely growing with an annual growth rate of 6.29%!
STZ has paid a dividend for at least 10 years, which is a reliable track record.
STZ has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)6.29%
Div Incr Years9
Div Non Decr Years9
5.3 Sustainability
The earnings of STZ are negative and hence is the payout ratio. STZ will probably not be able to sustain this dividend level.
STZ's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP-899.02%
EPS Next 2Y0.85%
EPS Next 3Y1.82%
164.88
-4.93 (-2.9%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners79.59%
Inst Owner Change0.64%
Ins Owners0.09%
Ins Owner Change0.07%
Market Cap29.35B
Analysts74
Price Target219.85 (33.34%)
Short Float %3.53%
Short Ratio2.43
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.39% |
Yearly Dividend4.05
Dividend Growth(5Y)6.29%
DP-899.02%
Div Incr Years9
Div Non Decr Years9
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)5.7%
Min EPS beat(2)-2.92%
Max EPS beat(2)14.31%
EPS beat(4)3
Avg EPS beat(4)4.58%
Min EPS beat(4)-2.92%
Max EPS beat(4)14.31%
EPS beat(8)7
Avg EPS beat(8)5.21%
EPS beat(12)10
Avg EPS beat(12)5.25%
EPS beat(16)12
Avg EPS beat(16)4.38%
Revenue beat(2)1
Avg Revenue beat(2)-1.55%
Min Revenue beat(2)-3.72%
Max Revenue beat(2)0.61%
Revenue beat(4)1
Avg Revenue beat(4)-1.17%
Min Revenue beat(4)-3.72%
Max Revenue beat(4)0.61%
Revenue beat(8)3
Avg Revenue beat(8)-0.9%
Revenue beat(12)6
Avg Revenue beat(12)0.39%
Revenue beat(16)9
Avg Revenue beat(16)0.6%
PT rev (1m)0.47%
PT rev (3m)-10.79%
EPS NQ rev (1m)-0.85%
EPS NQ rev (3m)-9.92%
EPS NY rev (1m)-2.09%
EPS NY rev (3m)-12.32%
Revenue NQ rev (1m)-0.19%
Revenue NQ rev (3m)-6.6%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)-10.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.97 | ||
| Fwd PE | 12.82 | ||
| P/S | 2.88 | ||
| P/FCF | 15.14 | ||
| P/OCF | 9.31 | ||
| P/B | 4.27 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.35 |
EPS(TTM)13.77
EY8.35%
EPS(NY)12.87
Fwd EY7.8%
FCF(TTM)10.89
FCFY6.6%
OCF(TTM)17.71
OCFY10.74%
SpS57.35
BVpS38.66
TBVpS-4.37
PEG (NY)N/A
PEG (5Y)1.4
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.38% | ||
| ROE | -1.18% | ||
| ROCE | 19.88% | ||
| ROIC | 15.1% | ||
| ROICexc | 15.16% | ||
| ROICexgc | 26.01% | ||
| OM | 34.3% | ||
| PM (TTM) | N/A | ||
| GM | 52.26% | ||
| FCFM | 18.98% |
ROA(3y)2.02%
ROA(5y)2.65%
ROE(3y)5.23%
ROE(5y)6.01%
ROIC(3y)12.24%
ROIC(5y)11.12%
ROICexc(3y)12.3%
ROICexc(5y)11.2%
ROICexgc(3y)22.37%
ROICexgc(5y)20.22%
ROCE(3y)15.97%
ROCE(5y)14.37%
ROICexcg growth 3Y11.53%
ROICexcg growth 5Y13.24%
ROICexc growth 3Y14.12%
ROICexc growth 5Y13.2%
OM growth 3Y0.41%
OM growth 5Y2.07%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.64%
GM growth 5Y0.98%
F-Score5
Asset Turnover0.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.47 | ||
| Debt/FCF | 5.93 | ||
| Debt/EBITDA | 2.56 | ||
| Cap/Depr | 272.4% | ||
| Cap/Sales | 11.89% | ||
| Interest Coverage | 8.42 | ||
| Cash Conversion | 79.85% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.92 | ||
| Quick Ratio | 0.56 | ||
| Altman-Z | 3.03 |
F-Score5
WACC9.5%
ROIC/WACC1.59
Cap/Depr(3y)275.65%
Cap/Depr(5y)283.18%
Cap/Sales(3y)11.86%
Cap/Sales(5y)11.45%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)14.18%
EPS 3Y10.52%
EPS 5Y8.57%
EPS Q2Q%16.37%
EPS Next Y-6.57%
EPS Next 2Y0.85%
EPS Next 3Y1.82%
EPS Next 5Y5.65%
Revenue 1Y (TTM)2.48%
Revenue growth 3Y4.99%
Revenue growth 5Y4.12%
Sales Q2Q%1.17%
Revenue Next Year-6.51%
Revenue Next 2Y-2.64%
Revenue Next 3Y-0.99%
Revenue Next 5Y2.72%
EBIT growth 1Y7.54%
EBIT growth 3Y5.43%
EBIT growth 5Y6.27%
EBIT Next Year4.53%
EBIT Next 3Y4.78%
EBIT Next 5Y3.88%
FCF growth 1Y28.27%
FCF growth 3Y4.91%
FCF growth 5Y1.21%
OCF growth 1Y13.39%
OCF growth 3Y5.23%
OCF growth 5Y4.32%