VALVOLINE INC (VVV) Stock Fundamental Analysis
NYSE:VVV - US92047W1018 - Common Stock
39.27 USD
-0.58 (-1.46%)
39.27 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to VVV. VVV was compared to 123 industry peers in the Specialty Retail industry. VVV scores excellent on profitability, but there are concerns on its financial health. While showing a medium growth rate, VVV is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year VVV was profitable.
VVV had a positive operating cash flow in the past year.
VVV had positive earnings in each of the past 5 years.
Of the past 5 years VVV 4 years had a positive operating cash flow.
1.2 Ratios
The Return On Assets of VVV (10.85%) is better than 85.37% of its industry peers.
VVV has a Return On Equity of 88.65%. This is amongst the best in the industry. VVV outperforms 98.37% of its industry peers.
VVV has a better Return On Invested Capital (11.30%) than 79.67% of its industry peers.
VVV had an Average Return On Invested Capital over the past 3 years of 9.44%. This is below the industry average of 11.94%.
The 3 year average ROIC (9.44%) for VVV is below the current ROIC(11.30%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.85% | ||
| ROE | 88.65% | ||
| ROIC | 11.3% |
ROA(3y)23.41%
ROA(5y)18.75%
ROE(3y)317.01%
ROE(5y)N/A
ROIC(3y)9.44%
ROIC(5y)7.69%
1.3 Margins
With an excellent Profit Margin value of 16.43%, VVV belongs to the best of the industry, outperforming 97.56% of the companies in the same industry.
VVV's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 18.65%, VVV belongs to the top of the industry, outperforming 95.94% of the companies in the same industry.
VVV's Operating Margin has improved in the last couple of years.
VVV has a Gross Margin (38.49%) which is in line with its industry peers.
In the last couple of years the Gross Margin of VVV has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.65% | ||
| PM (TTM) | 16.43% | ||
| GM | 38.49% |
OM growth 3Y-1.2%
OM growth 5Y3.93%
PM growth 3Y-31.43%
PM growth 5Y8.46%
GM growth 3Y-2.85%
GM growth 5Y2.43%
2. Health
2.1 Basic Checks
VVV has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for VVV has been reduced compared to 1 year ago.
Compared to 5 years ago, VVV has less shares outstanding
Compared to 1 year ago, VVV has an improved debt to assets ratio.
2.2 Solvency
VVV has an Altman-Z score of 2.49. This is not the best score and indicates that VVV is in the grey zone with still only limited risk for bankruptcy at the moment.
VVV has a Altman-Z score (2.49) which is in line with its industry peers.
VVV has a debt to FCF ratio of 24.05. This is a negative value and a sign of low solvency as VVV would need 24.05 years to pay back of all of its debts.
VVV has a Debt to FCF ratio (24.05) which is in line with its industry peers.
A Debt/Equity ratio of 3.37 is on the high side and indicates that VVV has dependencies on debt financing.
The Debt to Equity ratio of VVV (3.37) is worse than 76.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.37 | ||
| Debt/FCF | 24.05 | ||
| Altman-Z | 2.49 |
ROIC/WACC1.23
WACC9.2%
2.3 Liquidity
A Current Ratio of 0.73 indicates that VVV may have some problems paying its short term obligations.
VVV has a worse Current ratio (0.73) than 86.99% of its industry peers.
VVV has a Quick Ratio of 0.73. This is a bad value and indicates that VVV is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.60, VVV is in line with its industry, outperforming 59.35% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.73 | ||
| Quick Ratio | 0.6 |
3. Growth
3.1 Past
VVV shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.00%.
Measured over the past 5 years, VVV shows a small growth in Earnings Per Share. The EPS has been growing by 2.47% on average per year.
The Revenue has been growing slightly by 7.53% in the past year.
VVV shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -7.49% yearly.
EPS 1Y (TTM)6%
EPS 3Y-6.49%
EPS 5Y2.47%
EPS Q2Q%4.44%
Revenue 1Y (TTM)7.53%
Revenue growth 3Y16%
Revenue growth 5Y-7.49%
Sales Q2Q%4.18%
3.2 Future
The Earnings Per Share is expected to grow by 13.47% on average over the next years. This is quite good.
The Revenue is expected to grow by 10.85% on average over the next years. This is quite good.
EPS Next Y4.03%
EPS Next 2Y10.49%
EPS Next 3Y13.47%
EPS Next 5YN/A
Revenue Next Year5.94%
Revenue Next 2Y10.03%
Revenue Next 3Y10.85%
Revenue Next 5YN/A
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 accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
VVV is valuated rather expensively with a Price/Earnings ratio of 24.70.
Based on the Price/Earnings ratio, VVV is valued a bit cheaper than the industry average as 67.48% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.03, VVV is valued at the same level.
Based on the Price/Forward Earnings ratio of 20.49, the valuation of VVV can be described as rather expensive.
VVV's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of VVV to the average of the S&P500 Index (22.63), we can say VVV is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.7 | ||
| Fwd PE | 20.49 |
4.2 Price Multiples
VVV's Enterprise Value to EBITDA is on the same level as the industry average.
VVV's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 111.17 | ||
| EV/EBITDA | 13.93 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
VVV has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as VVV's earnings are expected to grow with 13.47% in the coming years.
PEG (NY)6.12
PEG (5Y)10.02
EPS Next 2Y10.49%
EPS Next 3Y13.47%
5. Dividend
5.1 Amount
VVV has a Yearly Dividend Yield of 1.43%. Purely for dividend investing, there may be better candidates out there.
VVV's Dividend Yield is a higher than the industry average which is at 5.70.
VVV's Dividend Yield is slightly below the S&P500 average, which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.43% |
5.2 History
VVV has been paying a dividend for over 5 years, so it has already some track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
DP0%
EPS Next 2Y10.49%
EPS Next 3Y13.47%
39.27
-0.58 (-1.46%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners104.79%
Inst Owner Change7.73%
Ins Owners0.26%
Ins Owner Change1.42%
Market Cap4.99B
Analysts77.89
Price Target45.09 (14.82%)
Short Float %7.51%
Short Ratio4.9
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.43% |
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.68%
Min EPS beat(2)-6.75%
Max EPS beat(2)3.39%
EPS beat(4)3
Avg EPS beat(4)2.61%
Min EPS beat(4)-6.75%
Max EPS beat(4)7.74%
EPS beat(8)4
Avg EPS beat(8)0.42%
EPS beat(12)6
Avg EPS beat(12)-0.89%
EPS beat(16)9
Avg EPS beat(16)-0.29%
Revenue beat(2)0
Avg Revenue beat(2)-0.93%
Min Revenue beat(2)-1.46%
Max Revenue beat(2)-0.39%
Revenue beat(4)1
Avg Revenue beat(4)0.09%
Min Revenue beat(4)-1.46%
Max Revenue beat(4)2.56%
Revenue beat(8)1
Avg Revenue beat(8)-0.8%
Revenue beat(12)2
Avg Revenue beat(12)-5.43%
Revenue beat(16)2
Avg Revenue beat(16)-31.04%
PT rev (1m)2.81%
PT rev (3m)2.61%
EPS NQ rev (1m)0.47%
EPS NQ rev (3m)0.37%
EPS NY rev (1m)1.6%
EPS NY rev (3m)0.73%
Revenue NQ rev (1m)-0.14%
Revenue NQ rev (3m)-2.61%
Revenue NY rev (1m)0.17%
Revenue NY rev (3m)0.12%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.7 | ||
| Fwd PE | 20.49 | ||
| P/S | 2.95 | ||
| P/FCF | 111.17 | ||
| P/OCF | 18.05 | ||
| P/B | 15.92 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.93 |
EPS(TTM)1.59
EY4.05%
EPS(NY)1.92
Fwd EY4.88%
FCF(TTM)0.35
FCFY0.9%
OCF(TTM)2.18
OCFY5.54%
SpS13.31
BVpS2.47
TBVpS-3.14
PEG (NY)6.12
PEG (5Y)10.02
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.85% | ||
| ROE | 88.65% | ||
| ROCE | 14.13% | ||
| ROIC | 11.3% | ||
| ROICexc | 11.65% | ||
| ROICexgc | 17.37% | ||
| OM | 18.65% | ||
| PM (TTM) | 16.43% | ||
| GM | 38.49% | ||
| FCFM | 2.65% |
ROA(3y)23.41%
ROA(5y)18.75%
ROE(3y)317.01%
ROE(5y)N/A
ROIC(3y)9.44%
ROIC(5y)7.69%
ROICexc(3y)10.86%
ROICexc(5y)8.92%
ROICexgc(3y)16.64%
ROICexgc(5y)13.28%
ROCE(3y)11.8%
ROCE(5y)9.62%
ROICexcg growth 3Y28.72%
ROICexcg growth 5Y-9.33%
ROICexc growth 3Y23.11%
ROICexc growth 5Y-9.61%
OM growth 3Y-1.2%
OM growth 5Y3.93%
PM growth 3Y-31.43%
PM growth 5Y8.46%
GM growth 3Y-2.85%
GM growth 5Y2.43%
F-Score7
Asset Turnover0.66
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.37 | ||
| Debt/FCF | 24.05 | ||
| Debt/EBITDA | 2.45 | ||
| Cap/Depr | 200.78% | ||
| Cap/Sales | 13.69% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 64.18% | ||
| Profit Quality | 16.15% | ||
| Current Ratio | 0.73 | ||
| Quick Ratio | 0.6 | ||
| Altman-Z | 2.49 |
F-Score7
WACC9.2%
ROIC/WACC1.23
Cap/Depr(3y)200.01%
Cap/Depr(5y)197.07%
Cap/Sales(3y)12.35%
Cap/Sales(5y)14.34%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)6%
EPS 3Y-6.49%
EPS 5Y2.47%
EPS Q2Q%4.44%
EPS Next Y4.03%
EPS Next 2Y10.49%
EPS Next 3Y13.47%
EPS Next 5YN/A
Revenue 1Y (TTM)7.53%
Revenue growth 3Y16%
Revenue growth 5Y-7.49%
Sales Q2Q%4.18%
Revenue Next Year5.94%
Revenue Next 2Y10.03%
Revenue Next 3Y10.85%
Revenue Next 5YN/A
EBIT growth 1Y4.33%
EBIT growth 3Y14.61%
EBIT growth 5Y-3.86%
EBIT Next Year38.52%
EBIT Next 3Y23.24%
EBIT Next 5YN/A
FCF growth 1Y140.41%
FCF growth 3Y-46.11%
FCF growth 5Y-28.45%
OCF growth 1Y517.41%
OCF growth 3Y-13.1%
OCF growth 5Y-3.99%