WESCO INTERNATIONAL INC (WCC) Stock Fundamental Analysis
NYSE:WCC - New York Stock Exchange, Inc. - US95082P1057 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to WCC. WCC was compared to 48 industry peers in the Trading Companies & Distributors industry. Both the profitability and the financial health of WCC get a neutral evaluation. Nothing too spectacular is happening here. WCC has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year WCC was profitable.
WCC had a positive operating cash flow in the past year.
WCC had positive earnings in each of the past 5 years.
WCC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
WCC's Return On Assets of 4.27% is fine compared to the rest of the industry. WCC outperforms 60.42% of its industry peers.
With a Return On Equity value of 13.16%, WCC perfoms like the industry average, outperforming 56.25% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 8.32%, WCC is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for WCC is in line with the industry average of 9.62%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.27% | ||
| ROE | 13.16% | ||
| ROIC | 8.32% |
ROA(3y)4.84%
ROA(5y)3.67%
ROE(3y)15.12%
ROE(5y)11.65%
ROIC(3y)9.61%
ROIC(5y)8.15%
1.3 Margins
Looking at the Profit Margin, with a value of 3.04%, WCC is in line with its industry, outperforming 52.08% of the companies in the same industry.
WCC's Profit Margin has improved in the last couple of years.
WCC has a Operating Margin (5.73%) which is in line with its industry peers.
In the last couple of years the Operating Margin of WCC has grown nicely.
Looking at the Gross Margin, with a value of 21.55%, WCC is doing worse than 75.00% of the companies in the same industry.
WCC's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.73% | ||
| PM (TTM) | 3.04% | ||
| GM | 21.55% |
OM growth 3Y3.9%
OM growth 5Y7.19%
PM growth 3Y10.55%
PM growth 5Y2.55%
GM growth 3Y1.24%
GM growth 5Y2.69%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so WCC is destroying value.
Compared to 1 year ago, WCC has less shares outstanding
The number of shares outstanding for WCC has been increased compared to 5 years ago.
WCC has a better debt/assets ratio than last year.
2.2 Solvency
WCC has an Altman-Z score of 3.06. This indicates that WCC is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.06, WCC is in line with its industry, outperforming 45.83% of the companies in the same industry.
WCC has a debt to FCF ratio of 17.90. This is a negative value and a sign of low solvency as WCC would need 17.90 years to pay back of all of its debts.
WCC's Debt to FCF ratio of 17.90 is in line compared to the rest of the industry. WCC outperforms 47.92% of its industry peers.
A Debt/Equity ratio of 1.02 is on the high side and indicates that WCC has dependencies on debt financing.
With a Debt to Equity ratio value of 1.02, WCC is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.02 | ||
| Debt/FCF | 17.9 | ||
| Altman-Z | 3.06 |
ROIC/WACC0.83
WACC9.97%
2.3 Liquidity
WCC has a Current Ratio of 2.15. This indicates that WCC is financially healthy and has no problem in meeting its short term obligations.
WCC has a Current ratio (2.15) which is in line with its industry peers.
WCC has a Quick Ratio of 1.23. This is a normal value and indicates that WCC is financially healthy and should not expect problems in meeting its short term obligations.
WCC has a Quick ratio of 1.23. This is comparable to the rest of the industry: WCC outperforms 50.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.15 | ||
| Quick Ratio | 1.23 |
3. Growth
3.1 Past
WCC shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.45%.
Measured over the past years, WCC shows a quite strong growth in Earnings Per Share. The EPS has been growing by 18.60% on average per year.
WCC shows a decrease in Revenue. In the last year, the revenue decreased by -2.53%.
WCC shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 21.15% yearly.
EPS 1Y (TTM)-2.45%
EPS 3Y7.07%
EPS 5Y18.6%
EPS Q2Q%5.61%
Revenue 1Y (TTM)-2.53%
Revenue growth 3Y6.2%
Revenue growth 5Y21.15%
Sales Q2Q%7.66%
3.2 Future
WCC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.04% yearly.
Based on estimates for the next years, WCC will show a small growth in Revenue. The Revenue will grow by 4.55% on average per year.
EPS Next Y8.42%
EPS Next 2Y13.74%
EPS Next 3Y15.05%
EPS Next 5Y8.04%
Revenue Next Year3.65%
Revenue Next 2Y4%
Revenue Next 3Y4.04%
Revenue Next 5Y4.55%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less 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
WCC is valuated correctly with a Price/Earnings ratio of 16.49.
WCC's Price/Earnings ratio is a bit cheaper when compared to the industry. WCC is cheaper than 75.00% of the companies in the same industry.
WCC is valuated rather cheaply when we compare the Price/Earnings ratio to 27.25, which is the current average of the S&P500 Index.
WCC is valuated correctly with a Price/Forward Earnings ratio of 12.84.
Based on the Price/Forward Earnings ratio, WCC is valued a bit cheaper than 77.08% of the companies in the same industry.
WCC is valuated cheaply when we compare the Price/Forward Earnings ratio to 36.80, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.49 | ||
| Fwd PE | 12.84 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WCC indicates a somewhat cheap valuation: WCC is cheaper than 68.75% of the companies listed in the same industry.
WCC's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.46 | ||
| EV/EBITDA | 10.16 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates WCC does not grow enough to justify the current Price/Earnings ratio.
WCC has a very decent profitability rating, which may justify a higher PE ratio.
WCC's earnings are expected to grow with 15.05% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.96
PEG (5Y)0.89
EPS Next 2Y13.74%
EPS Next 3Y15.05%
5. Dividend
5.1 Amount
WCC has a yearly dividend return of 0.85%, which is pretty low.
Compared to an average industry Dividend Yield of 2.05, WCC pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.34, WCC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.85% |
5.2 History
WCC has paid a dividend for less than 5 years, so there is no long track record yet.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
WCC pays out 21.14% of its income as dividend. This is a sustainable payout ratio.
DP21.14%
EPS Next 2Y13.74%
EPS Next 3Y15.05%
203.49
-3.47 (-1.68%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners100.16%
Inst Owner Change1.99%
Ins Owners1.85%
Ins Owner Change2.31%
Market Cap9.93B
Analysts85
Price Target210.74 (3.56%)
Short Float %3.77%
Short Ratio2.92
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.85% |
Yearly Dividend2.79
Dividend Growth(5Y)N/A
DP21.14%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-4.37%
Min EPS beat(2)-5.55%
Max EPS beat(2)-3.19%
EPS beat(4)1
Avg EPS beat(4)-2.49%
Min EPS beat(4)-11.8%
Max EPS beat(4)10.59%
EPS beat(8)2
Avg EPS beat(8)-6.83%
EPS beat(12)6
Avg EPS beat(12)-3.06%
EPS beat(16)10
Avg EPS beat(16)5.69%
Revenue beat(2)2
Avg Revenue beat(2)0.62%
Min Revenue beat(2)0.54%
Max Revenue beat(2)0.69%
Revenue beat(4)3
Avg Revenue beat(4)0.54%
Min Revenue beat(4)-2.41%
Max Revenue beat(4)3.36%
Revenue beat(8)3
Avg Revenue beat(8)-0.78%
Revenue beat(12)6
Avg Revenue beat(12)-0.23%
Revenue beat(16)9
Avg Revenue beat(16)0.63%
PT rev (1m)1.88%
PT rev (3m)-4.85%
EPS NQ rev (1m)-0.24%
EPS NQ rev (3m)-4.1%
EPS NY rev (1m)0%
EPS NY rev (3m)-2.63%
Revenue NQ rev (1m)0.44%
Revenue NQ rev (3m)3.31%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)0.8%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.49 | ||
| Fwd PE | 12.84 | ||
| P/S | 0.46 | ||
| P/FCF | 34.46 | ||
| P/OCF | 25.93 | ||
| P/B | 1.97 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.16 |
EPS(TTM)12.34
EY6.06%
EPS(NY)15.85
Fwd EY7.79%
FCF(TTM)5.91
FCFY2.9%
OCF(TTM)7.85
OCFY3.86%
SpS446.98
BVpS103.18
TBVpS-1.92
PEG (NY)1.96
PEG (5Y)0.89
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.27% | ||
| ROE | 13.16% | ||
| ROCE | 10.88% | ||
| ROIC | 8.32% | ||
| ROICexc | 8.84% | ||
| ROICexgc | 16.84% | ||
| OM | 5.73% | ||
| PM (TTM) | 3.04% | ||
| GM | 21.55% | ||
| FCFM | 1.32% |
ROA(3y)4.84%
ROA(5y)3.67%
ROE(3y)15.12%
ROE(5y)11.65%
ROIC(3y)9.61%
ROIC(5y)8.15%
ROICexc(3y)10.13%
ROICexc(5y)8.54%
ROICexgc(3y)19.5%
ROICexgc(5y)17.57%
ROCE(3y)12.57%
ROCE(5y)10.66%
ROICexcg growth 3Y1.25%
ROICexcg growth 5Y3.88%
ROICexc growth 3Y5.99%
ROICexc growth 5Y6.02%
OM growth 3Y3.9%
OM growth 5Y7.19%
PM growth 3Y10.55%
PM growth 5Y2.55%
GM growth 3Y1.24%
GM growth 5Y2.69%
F-Score6
Asset Turnover1.41
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.02 | ||
| Debt/FCF | 17.9 | ||
| Debt/EBITDA | 3.58 | ||
| Cap/Depr | 50.89% | ||
| Cap/Sales | 0.43% | ||
| Interest Coverage | 3.25 | ||
| Cash Conversion | 26.68% | ||
| Profit Quality | 43.49% | ||
| Current Ratio | 2.15 | ||
| Quick Ratio | 1.23 | ||
| Altman-Z | 3.06 |
F-Score6
WACC9.97%
ROIC/WACC0.83
Cap/Depr(3y)52.71%
Cap/Depr(5y)46.47%
Cap/Sales(3y)0.44%
Cap/Sales(5y)0.41%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-2.45%
EPS 3Y7.07%
EPS 5Y18.6%
EPS Q2Q%5.61%
EPS Next Y8.42%
EPS Next 2Y13.74%
EPS Next 3Y15.05%
EPS Next 5Y8.04%
Revenue 1Y (TTM)-2.53%
Revenue growth 3Y6.2%
Revenue growth 5Y21.15%
Sales Q2Q%7.66%
Revenue Next Year3.65%
Revenue Next 2Y4%
Revenue Next 3Y4.04%
Revenue Next 5Y4.55%
EBIT growth 1Y-10.12%
EBIT growth 3Y10.33%
EBIT growth 5Y29.86%
EBIT Next Year17.25%
EBIT Next 3Y11.21%
EBIT Next 5Y6.58%
FCF growth 1Y269.02%
FCF growth 3Y333.07%
FCF growth 5Y41.05%
OCF growth 1Y628.5%
OCF growth 3Y154.08%
OCF growth 5Y37.46%