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 4 out of 10 to WCC. WCC was compared to 49 industry peers in the Trading Companies & Distributors industry. WCC has only an average score on both its financial health and profitability. WCC has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
WCC had positive earnings in the past year.
In the past year WCC had a positive cash flow from operations.
Each year in the past 5 years WCC has been profitable.
WCC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 4.27%, WCC is in line with its industry, outperforming 57.14% of the companies in the same industry.
Looking at the Return On Equity, with a value of 13.16%, WCC is in line with its industry, outperforming 51.02% 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 67.35% 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 9.65%.
| 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 44.90% of the companies in the same industry.
In the last couple of years the Profit Margin of WCC has grown nicely.
WCC has a worse Operating Margin (5.73%) than 61.22% of its industry peers.
In the last couple of years the Operating Margin of WCC has grown nicely.
WCC's Gross Margin of 21.55% is on the low side compared to the rest of the industry. WCC is outperformed by 75.51% of its industry peers.
In the last couple of years the Gross Margin of WCC has grown nicely.
| 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
WCC has more shares outstanding than it did 5 years ago.
WCC has a better debt/assets ratio than last year.
2.2 Solvency
WCC has an Altman-Z score of 2.97. This is not the best score and indicates that WCC is in the grey zone with still only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.97, WCC perfoms like the industry average, outperforming 48.98% 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 44.90% of its industry peers.
WCC has a Debt/Equity ratio of 1.02. This is a high value indicating a heavy dependency on external financing.
WCC has a Debt to Equity ratio of 1.02. This is in the lower half of the industry: WCC underperforms 65.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.02 | ||
| Debt/FCF | 17.9 | ||
| Altman-Z | 2.97 |
ROIC/WACC0.85
WACC9.75%
2.3 Liquidity
A Current Ratio of 2.15 indicates that WCC has no problem at all paying its short term obligations.
WCC has a Current ratio of 2.15. This is comparable to the rest of the industry: WCC outperforms 53.06% of its industry peers.
A Quick Ratio of 1.23 indicates that WCC should not have too much problems paying its short term obligations.
WCC's Quick ratio of 1.23 is in line compared to the rest of the industry. WCC outperforms 44.90% 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 -7.53%.
The Earnings Per Share has been growing by 18.60% on average over the past years. This is quite good.
The Revenue has decreased by -1.80% in the past year.
The Revenue has been growing by 21.15% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)-7.53%
EPS 3Y7.07%
EPS 5Y18.6%
EPS Q2Q%-3.91%
Revenue 1Y (TTM)-1.8%
Revenue growth 3Y6.2%
Revenue growth 5Y21.15%
Sales Q2Q%-0.12%
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 8.23% yearly.
Based on estimates for the next years, WCC will show a small growth in Revenue. The Revenue will grow by 4.73% on average per year.
EPS Next Y8.72%
EPS Next 2Y13.74%
EPS Next 3Y15.05%
EPS Next 5Y8.23%
Revenue Next Year3.47%
Revenue Next 2Y3.87%
Revenue Next 3Y4.03%
Revenue Next 5Y4.73%
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
With a Price/Earnings ratio of 14.24, WCC is valued correctly.
Based on the Price/Earnings ratio, WCC is valued a bit cheaper than 79.59% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.46. WCC is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 10.93, which indicates a very decent valuation of WCC.
Based on the Price/Forward Earnings ratio, WCC is valued a bit cheaper than the industry average as 79.59% of the companies are valued more expensively.
WCC's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.30.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.24 | ||
| Fwd PE | 10.93 |
4.2 Price Multiples
WCC's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. WCC is cheaper than 67.35% of the companies in the same industry.
WCC's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. WCC is cheaper than 61.22% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.32 | ||
| EV/EBITDA | 9.01 |
4.3 Compensation for Growth
WCC's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
WCC's earnings are expected to grow with 15.05% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.63
PEG (5Y)0.77
EPS Next 2Y13.74%
EPS Next 3Y15.05%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.06%, WCC has a reasonable but not impressive dividend return.
WCC's Dividend Yield is a higher than the industry average which is at 2.70.
With a Dividend Yield of 1.06, WCC pays less dividend than the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.06% |
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
21.14% of the earnings are spent on dividend by WCC. This is a low number and sustainable payout ratio.
DP21.14%
EPS Next 2Y13.74%
EPS Next 3Y15.05%
173.18
+7.72 (+4.67%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners97.16%
Inst Owner Change2.36%
Ins Owners1.73%
Ins Owner Change2.61%
Market Cap8.45B
Analysts85
Price Target207.26 (19.68%)
Short Float %2.91%
Short Ratio1.77
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.06% |
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)-6.42%
PT rev (3m)-11.89%
EPS NQ rev (1m)-3.09%
EPS NQ rev (3m)-3.09%
EPS NY rev (1m)-2.35%
EPS NY rev (3m)-2.19%
Revenue NQ rev (1m)2.87%
Revenue NQ rev (3m)2.69%
Revenue NY rev (1m)0.66%
Revenue NY rev (3m)0.62%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.24 | ||
| Fwd PE | 10.93 | ||
| P/S | 0.39 | ||
| P/FCF | 29.32 | ||
| P/OCF | 22.07 | ||
| P/B | 1.68 | ||
| P/tB | N/A | ||
| EV/EBITDA | 9.01 |
EPS(TTM)12.16
EY7.02%
EPS(NY)15.85
Fwd EY9.15%
FCF(TTM)5.91
FCFY3.41%
OCF(TTM)7.85
OCFY4.53%
SpS446.98
BVpS103.18
TBVpS-1.92
PEG (NY)1.63
PEG (5Y)0.77
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 | 2.97 |
F-Score6
WACC9.75%
ROIC/WACC0.85
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)-7.53%
EPS 3Y7.07%
EPS 5Y18.6%
EPS Q2Q%-3.91%
EPS Next Y8.72%
EPS Next 2Y13.74%
EPS Next 3Y15.05%
EPS Next 5Y8.23%
Revenue 1Y (TTM)-1.8%
Revenue growth 3Y6.2%
Revenue growth 5Y21.15%
Sales Q2Q%-0.12%
Revenue Next Year3.47%
Revenue Next 2Y3.87%
Revenue Next 3Y4.03%
Revenue Next 5Y4.73%
EBIT growth 1Y-10.12%
EBIT growth 3Y10.33%
EBIT growth 5Y29.86%
EBIT Next Year17.25%
EBIT Next 3Y11.21%
EBIT Next 5Y6.77%
FCF growth 1Y269.02%
FCF growth 3Y333.07%
FCF growth 5Y41.05%
OCF growth 1Y628.5%
OCF growth 3Y154.08%
OCF growth 5Y37.46%