WENDY'S CO/THE (WEN) Stock Fundamental Analysis
NASDAQ:WEN - Nasdaq - US95058W1009 - Common Stock - Currency: USD
Overall WEN gets a fundamental rating of 5 out of 10. We evaluated WEN against 132 industry peers in the Hotels, Restaurants & Leisure industry. While WEN has a great profitability rating, there are quite some concerns on its financial health. WEN has a bad growth rate and is valued cheaply.
1. Profitability
1.1 Basic Checks
In the past year WEN was profitable.
In the past year WEN had a positive cash flow from operations.
Each year in the past 5 years WEN has been profitable.
In the past 5 years WEN always reported a positive cash flow from operatings.
1.2 Ratios
WEN has a better Return On Assets (3.89%) than 61.36% of its industry peers.
The Return On Equity of WEN (147.11%) is better than 100.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 6.04%, WEN is in line with its industry, outperforming 55.30% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for WEN is significantly below the industry average of 13.91%.
The last Return On Invested Capital (6.04%) for WEN is above the 3 year average (5.43%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.89% | ||
| ROE | 147.11% | ||
| ROIC | 6.04% |
ROA(3y)3.68%
ROA(5y)3.46%
ROE(3y)59.67%
ROE(5y)49.27%
ROIC(3y)5.43%
ROIC(5y)5.17%
1.3 Margins
WEN has a Profit Margin of 8.57%. This is in the better half of the industry: WEN outperforms 67.42% of its industry peers.
WEN's Profit Margin has improved in the last couple of years.
WEN has a better Operating Margin (16.79%) than 73.48% of its industry peers.
WEN's Operating Margin has been stable in the last couple of years.
WEN has a Gross Margin of 63.24%. This is in the better half of the industry: WEN outperforms 78.03% of its industry peers.
WEN's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.79% | ||
| PM (TTM) | 8.57% | ||
| GM | 63.24% |
OM growth 3Y-1.47%
OM growth 5Y0.74%
PM growth 3Y-6.44%
PM growth 5Y1.55%
GM growth 3Y-1.04%
GM growth 5Y0.27%
2. Health
2.1 Basic Checks
WEN has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for WEN has been reduced compared to 1 year ago.
The number of shares outstanding for WEN has been reduced compared to 5 years ago.
WEN has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.13, we must say that WEN is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.13, WEN is doing worse than 63.64% of the companies in the same industry.
The Debt to FCF ratio of WEN is 13.58, which is on the high side as it means it would take WEN, 13.58 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 13.58, WEN is in line with its industry, outperforming 51.52% of the companies in the same industry.
WEN has a Debt/Equity ratio of 24.88. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 24.88, WEN is doing worse than 68.94% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 24.88 | ||
| Debt/FCF | 13.58 | ||
| Altman-Z | 1.13 |
ROIC/WACC0.79
WACC7.64%
2.3 Liquidity
A Current Ratio of 1.49 indicates that WEN should not have too much problems paying its short term obligations.
WEN has a Current ratio of 1.49. This is in the better half of the industry: WEN outperforms 75.00% of its industry peers.
WEN has a Quick Ratio of 1.47. This is a normal value and indicates that WEN is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Quick ratio value of 1.47, WEN is doing good in the industry, outperforming 77.27% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.49 | ||
| Quick Ratio | 1.47 |
3. Growth
3.1 Past
WEN shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.02%.
WEN shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.13% yearly.
The Revenue has been growing slightly by 2.18% in the past year.
Measured over the past years, WEN shows a small growth in Revenue. The Revenue has been growing by 5.62% on average per year.
EPS 1Y (TTM)-2.02%
EPS 3Y6.84%
EPS 5Y11.13%
EPS Q2Q%-13.04%
Revenue 1Y (TTM)2.18%
Revenue growth 3Y5.8%
Revenue growth 5Y5.62%
Sales Q2Q%-2.11%
3.2 Future
The Earnings Per Share is expected to grow by 7.70% on average over the next years.
The Revenue is expected to grow by 3.11% on average over the next years.
EPS Next Y-3.91%
EPS Next 2Y2.81%
EPS Next 3Y4.32%
EPS Next 5Y7.7%
Revenue Next Year-1.6%
Revenue Next 2Y1.21%
Revenue Next 3Y1.76%
Revenue Next 5Y3.11%
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.
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
A Price/Earnings ratio of 10.84 indicates a reasonable valuation of WEN.
Based on the Price/Earnings ratio, WEN is valued cheaply inside the industry as 93.18% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.19, WEN is valued rather cheaply.
A Price/Forward Earnings ratio of 9.94 indicates a reasonable valuation of WEN.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WEN indicates a rather cheap valuation: WEN is cheaper than 88.64% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 35.33. WEN is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.84 | ||
| Fwd PE | 9.94 |
4.2 Price Multiples
WEN's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. WEN is cheaper than 72.73% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, WEN is valued cheaply inside the industry as 97.73% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.2 | ||
| EV/EBITDA | 9.54 |
4.3 Compensation for Growth
WEN has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.97
EPS Next 2Y2.81%
EPS Next 3Y4.32%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 7.88%, WEN is a good candidate for dividend investing.
WEN's Dividend Yield is rather good when compared to the industry average which is at 3.47. WEN pays more dividend than 96.97% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.35, WEN pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.88% |
5.2 History
The dividend of WEN is nicely growing with an annual growth rate of 32.37%!
WEN has paid a dividend for at least 10 years, which is a reliable track record.
WEN has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)32.37%
Div Incr Years0
Div Non Decr Years4
5.3 Sustainability
105.69% of the earnings are spent on dividend by WEN. This is not a sustainable payout ratio.
The dividend of WEN is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP105.69%
EPS Next 2Y2.81%
EPS Next 3Y4.32%
10.51
-0.39 (-3.58%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners92.16%
Inst Owner Change0%
Ins Owners8.94%
Ins Owner Change0.72%
Market Cap2.02B
Analysts65.45
Price Target14.5 (37.96%)
Short Float %12.2%
Short Ratio3.31
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.88% |
Yearly Dividend1
Dividend Growth(5Y)32.37%
DP105.69%
Div Incr Years0
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.04%
Min EPS beat(2)-0.22%
Max EPS beat(2)2.3%
EPS beat(4)1
Avg EPS beat(4)-0.74%
Min EPS beat(4)-3.06%
Max EPS beat(4)2.3%
EPS beat(8)4
Avg EPS beat(8)0.19%
EPS beat(12)8
Avg EPS beat(12)1.77%
EPS beat(16)11
Avg EPS beat(16)4.43%
Revenue beat(2)1
Avg Revenue beat(2)-0.24%
Min Revenue beat(2)-1.35%
Max Revenue beat(2)0.88%
Revenue beat(4)2
Avg Revenue beat(4)-0.62%
Min Revenue beat(4)-2.13%
Max Revenue beat(4)0.88%
Revenue beat(8)2
Avg Revenue beat(8)-1.31%
Revenue beat(12)3
Avg Revenue beat(12)-1.2%
Revenue beat(16)5
Avg Revenue beat(16)-0.66%
PT rev (1m)-1.73%
PT rev (3m)-16.84%
EPS NQ rev (1m)-0.44%
EPS NQ rev (3m)-8.39%
EPS NY rev (1m)-0.36%
EPS NY rev (3m)-5.37%
Revenue NQ rev (1m)-0.18%
Revenue NQ rev (3m)-3.06%
Revenue NY rev (1m)-0.14%
Revenue NY rev (3m)-2.55%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.84 | ||
| Fwd PE | 9.94 | ||
| P/S | 0.9 | ||
| P/FCF | 8.2 | ||
| P/OCF | 5.92 | ||
| P/B | 15.5 | ||
| P/tB | N/A | ||
| EV/EBITDA | 9.54 |
EPS(TTM)0.97
EY9.23%
EPS(NY)1.06
Fwd EY10.06%
FCF(TTM)1.28
FCFY12.19%
OCF(TTM)1.77
OCFY16.88%
SpS11.64
BVpS0.68
TBVpS-9.51
PEG (NY)N/A
PEG (5Y)0.97
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.89% | ||
| ROE | 147.11% | ||
| ROCE | 8.37% | ||
| ROIC | 6.04% | ||
| ROICexc | 6.53% | ||
| ROICexgc | 12.35% | ||
| OM | 16.79% | ||
| PM (TTM) | 8.57% | ||
| GM | 63.24% | ||
| FCFM | 11.01% |
ROA(3y)3.68%
ROA(5y)3.46%
ROE(3y)59.67%
ROE(5y)49.27%
ROIC(3y)5.43%
ROIC(5y)5.17%
ROICexc(3y)6.13%
ROICexc(5y)5.72%
ROICexgc(3y)11.48%
ROICexgc(5y)10.67%
ROCE(3y)7.51%
ROCE(5y)7.16%
ROICexcg growth 3Y6.48%
ROICexcg growth 5Y7.52%
ROICexc growth 3Y6.19%
ROICexc growth 5Y7.2%
OM growth 3Y-1.47%
OM growth 5Y0.74%
PM growth 3Y-6.44%
PM growth 5Y1.55%
GM growth 3Y-1.04%
GM growth 5Y0.27%
F-Score6
Asset Turnover0.45
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 24.88 | ||
| Debt/FCF | 13.58 | ||
| Debt/EBITDA | 6.06 | ||
| Cap/Depr | 59.35% | ||
| Cap/Sales | 4.24% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 63.71% | ||
| Profit Quality | 128.41% | ||
| Current Ratio | 1.49 | ||
| Quick Ratio | 1.47 | ||
| Altman-Z | 1.13 |
F-Score6
WACC7.64%
ROIC/WACC0.79
Cap/Depr(3y)59.99%
Cap/Depr(5y)58.81%
Cap/Sales(3y)4.06%
Cap/Sales(5y)4.05%
Profit Quality(3y)119.97%
Profit Quality(5y)135.28%
High Growth Momentum
Growth
EPS 1Y (TTM)-2.02%
EPS 3Y6.84%
EPS 5Y11.13%
EPS Q2Q%-13.04%
EPS Next Y-3.91%
EPS Next 2Y2.81%
EPS Next 3Y4.32%
EPS Next 5Y7.7%
Revenue 1Y (TTM)2.18%
Revenue growth 3Y5.8%
Revenue growth 5Y5.62%
Sales Q2Q%-2.11%
Revenue Next Year-1.6%
Revenue Next 2Y1.21%
Revenue Next 3Y1.76%
Revenue Next 5Y3.11%
EBIT growth 1Y-2.02%
EBIT growth 3Y4.25%
EBIT growth 5Y6.41%
EBIT Next Year43.02%
EBIT Next 3Y15.67%
EBIT Next 5Y12.09%
FCF growth 1Y19.08%
FCF growth 3Y-0.86%
FCF growth 5Y4.01%
OCF growth 1Y16.73%
OCF growth 3Y0.91%
OCF growth 5Y4.22%