WALKER & DUNLOP INC (WD) Stock Fundamental Analysis
NYSE:WD - New York Stock Exchange, Inc. - US93148P1021 - Common Stock - Currency: USD
Overall WD gets a fundamental rating of 5 out of 10. We evaluated WD against 101 industry peers in the Financial Services industry. While WD seems to be doing ok healthwise, there are quite some concerns on its profitability. WD has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
WD had positive earnings in the past year.
In the past year WD had a positive cash flow from operations.
Each year in the past 5 years WD has been profitable.
The reported operating cash flow has been mixed in the past 5 years: WD reported negative operating cash flow in multiple years.
1.2 Ratios
WD's Return On Assets of 2.68% is fine compared to the rest of the industry. WD outperforms 63.37% of its industry peers.
The Return On Equity of WD (6.71%) is worse than 61.39% of its industry peers.
Looking at the Return On Invested Capital, with a value of 3.81%, WD is in line with its industry, outperforming 53.47% of the companies in the same industry.
WD had an Average Return On Invested Capital over the past 3 years of 4.31%. This is significantly below the industry average of 11.84%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.68% | ||
| ROE | 6.71% | ||
| ROIC | 3.81% |
ROA(3y)3.38%
ROA(5y)4.04%
ROE(3y)8.14%
ROE(5y)12.19%
ROIC(3y)4.31%
ROIC(5y)4.87%
1.3 Margins
WD has a Profit Margin of 8.62%. This is comparable to the rest of the industry: WD outperforms 45.54% of its industry peers.
In the last couple of years the Profit Margin of WD has declined.
WD has a Operating Margin of 15.82%. This is comparable to the rest of the industry: WD outperforms 50.49% of its industry peers.
In the last couple of years the Operating Margin of WD has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.82% | ||
| PM (TTM) | 8.62% | ||
| GM | N/A |
OM growth 3Y-17.2%
OM growth 5Y-11.53%
PM growth 3Y-22.94%
PM growth 5Y-14.57%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), WD is destroying value.
The number of shares outstanding for WD has been increased compared to 1 year ago.
WD has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, WD has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.59, we must say that WD is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.59, WD is in the better half of the industry, outperforming 72.28% of the companies in the same industry.
The Debt to FCF ratio of WD is 13.31, which is on the high side as it means it would take WD, 13.31 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 13.31, WD perfoms like the industry average, outperforming 51.49% of the companies in the same industry.
A Debt/Equity ratio of 0.89 indicates that WD is somewhat dependend on debt financing.
The Debt to Equity ratio of WD (0.89) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.89 | ||
| Debt/FCF | 13.31 | ||
| Altman-Z | 1.59 |
ROIC/WACC0.4
WACC9.51%
2.3 Liquidity
A Current Ratio of 5.72 indicates that WD has no problem at all paying its short term obligations.
WD has a Current ratio of 5.72. This is amongst the best in the industry. WD outperforms 95.05% of its industry peers.
A Quick Ratio of 5.72 indicates that WD has no problem at all paying its short term obligations.
WD has a better Quick ratio (5.72) than 95.05% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 5.72 | ||
| Quick Ratio | 5.72 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 34.67% over the past year.
WD shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -10.16% yearly.
The Revenue has been growing slightly by 7.40% in the past year.
The Revenue has been growing slightly by 6.74% on average over the past years.
EPS 1Y (TTM)34.67%
EPS 3Y-26.85%
EPS 5Y-10.16%
EPS Q2Q%142.86%
Revenue 1Y (TTM)7.4%
Revenue growth 3Y-3.47%
Revenue growth 5Y6.74%
Sales Q2Q%10.01%
3.2 Future
The Earnings Per Share is expected to grow by 22.83% on average over the next years. This is a very strong growth
Based on estimates for the next years, WD will show a small growth in Revenue. The Revenue will grow by 5.66% on average per year.
EPS Next Y34.79%
EPS Next 2Y27.03%
EPS Next 3Y22.83%
EPS Next 5YN/A
Revenue Next Year6.63%
Revenue Next 2Y5.68%
Revenue Next 3Y5.66%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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 stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 19.38, WD is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of WD is on the same level as its industry peers.
When comparing the Price/Earnings ratio of WD to the average of the S&P500 Index (24.29), we can say WD is valued slightly cheaper.
The Price/Forward Earnings ratio is 13.89, which indicates a correct valuation of WD.
WD's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 20.42. WD is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.38 | ||
| Fwd PE | 13.89 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WD is valued a bit cheaper than 73.27% of the companies in the same industry.
WD's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. WD is cheaper than 62.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.87 | ||
| EV/EBITDA | 8.25 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as WD's earnings are expected to grow with 22.83% in the coming years.
PEG (NY)0.56
PEG (5Y)N/A
EPS Next 2Y27.03%
EPS Next 3Y22.83%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.61%, WD has a reasonable but not impressive dividend return.
The stock price of WD dropped by -24.19% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
WD's Dividend Yield is rather good when compared to the industry average which is at 4.97. WD pays more dividend than 80.20% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.43, WD pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.61% |
5.2 History
The dividend of WD is nicely growing with an annual growth rate of 16.43%!
WD has been paying a dividend for over 5 years, so it has already some track record.
As WD did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)16.43%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
75.56% of the earnings are spent on dividend by WD. This is not a sustainable payout ratio.
The dividend of WD is growing, but earnings are growing more, so the dividend growth is sustainable.
DP75.56%
EPS Next 2Y27.03%
EPS Next 3Y22.83%
71.52
-1.05 (-1.45%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners84.94%
Inst Owner Change0.52%
Ins Owners3.46%
Ins Owner Change8.45%
Market Cap2.43B
Analysts80
Price Target107.1 (49.75%)
Short Float %2.5%
Short Ratio3.53
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.61% |
Yearly Dividend2.68
Dividend Growth(5Y)16.43%
DP75.56%
Div Incr Years6
Div Non Decr Years6
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-6.91%
Min EPS beat(2)-18.5%
Max EPS beat(2)4.68%
EPS beat(4)1
Avg EPS beat(4)-16.58%
Min EPS beat(4)-34.4%
Max EPS beat(4)4.68%
EPS beat(8)2
Avg EPS beat(8)-14.92%
EPS beat(12)3
Avg EPS beat(12)-15.11%
EPS beat(16)5
Avg EPS beat(16)-12.68%
Revenue beat(2)1
Avg Revenue beat(2)1.41%
Min Revenue beat(2)-3.56%
Max Revenue beat(2)6.37%
Revenue beat(4)1
Avg Revenue beat(4)-4.57%
Min Revenue beat(4)-16.81%
Max Revenue beat(4)6.37%
Revenue beat(8)2
Avg Revenue beat(8)-4.58%
Revenue beat(12)3
Avg Revenue beat(12)-5.53%
Revenue beat(16)5
Avg Revenue beat(16)-3.71%
PT rev (1m)-3.08%
PT rev (3m)-10%
EPS NQ rev (1m)-9.26%
EPS NQ rev (3m)-29.15%
EPS NY rev (1m)-2.39%
EPS NY rev (3m)-15.5%
Revenue NQ rev (1m)-3.63%
Revenue NQ rev (3m)-8.89%
Revenue NY rev (1m)-0.73%
Revenue NY rev (3m)-4.46%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.38 | ||
| Fwd PE | 13.89 | ||
| P/S | 1.79 | ||
| P/FCF | 20.87 | ||
| P/OCF | 18.78 | ||
| P/B | 1.39 | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.25 |
EPS(TTM)3.69
EY5.16%
EPS(NY)5.15
Fwd EY7.2%
FCF(TTM)3.43
FCFY4.79%
OCF(TTM)3.81
OCFY5.32%
SpS40.05
BVpS51.45
TBVpS-3.83
PEG (NY)0.56
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.68% | ||
| ROE | 6.71% | ||
| ROCE | 5.03% | ||
| ROIC | 3.81% | ||
| ROICexc | 4.08% | ||
| ROICexgc | 8.85% | ||
| OM | 15.82% | ||
| PM (TTM) | 8.62% | ||
| GM | N/A | ||
| FCFM | 8.56% |
ROA(3y)3.38%
ROA(5y)4.04%
ROE(3y)8.14%
ROE(5y)12.19%
ROIC(3y)4.31%
ROIC(5y)4.87%
ROICexc(3y)4.62%
ROICexc(5y)5.21%
ROICexgc(3y)10.7%
ROICexgc(5y)10.36%
ROCE(3y)5.69%
ROCE(5y)6.46%
ROICexcg growth 3Y-11.67%
ROICexcg growth 5Y-10.48%
ROICexc growth 3Y-14.61%
ROICexc growth 5Y-13.84%
OM growth 3Y-17.2%
OM growth 5Y-11.53%
PM growth 3Y-22.94%
PM growth 5Y-14.57%
GM growth 3YN/A
GM growth 5YN/A
F-Score6
Asset Turnover0.31
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.89 | ||
| Debt/FCF | 13.31 | ||
| Debt/EBITDA | 3.42 | ||
| Cap/Depr | 5.46% | ||
| Cap/Sales | 0.95% | ||
| Interest Coverage | 2.04 | ||
| Cash Conversion | 28.57% | ||
| Profit Quality | 99.23% | ||
| Current Ratio | 5.72 | ||
| Quick Ratio | 5.72 | ||
| Altman-Z | 1.59 |
F-Score6
WACC9.51%
ROIC/WACC0.4
Cap/Depr(3y)7.32%
Cap/Depr(5y)5.62%
Cap/Sales(3y)1.48%
Cap/Sales(5y)1.09%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)34.67%
EPS 3Y-26.85%
EPS 5Y-10.16%
EPS Q2Q%142.86%
EPS Next Y34.79%
EPS Next 2Y27.03%
EPS Next 3Y22.83%
EPS Next 5YN/A
Revenue 1Y (TTM)7.4%
Revenue growth 3Y-3.47%
Revenue growth 5Y6.74%
Sales Q2Q%10.01%
Revenue Next Year6.63%
Revenue Next 2Y5.68%
Revenue Next 3Y5.66%
Revenue Next 5YN/A
EBIT growth 1Y4.38%
EBIT growth 3Y-20.07%
EBIT growth 5Y-5.56%
EBIT Next Year370.91%
EBIT Next 3Y73.56%
EBIT Next 5YN/A
FCF growth 1Y796.2%
FCF growth 3Y-48.68%
FCF growth 5Y-22.74%
OCF growth 1Y25072.8%
OCF growth 3Y-47.03%
OCF growth 5Y-21.27%