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 134 industry peers in the Hotels, Restaurants & Leisure industry. WEN scores excellent on profitability, but there are concerns on its financial health. WEN has a bad growth rate and is valued cheaply.
1. Profitability
1.1 Basic Checks
WEN had positive earnings in the past year.
In the past year WEN had a positive cash flow from operations.
Each year in the past 5 years WEN has been profitable.
WEN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
WEN has a better Return On Assets (3.89%) than 62.69% of its industry peers.
WEN's Return On Equity of 147.11% is amongst the best of the industry. WEN outperforms 100.00% of its industry peers.
WEN has a Return On Invested Capital (6.04%) which is in line with its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for WEN is significantly below the industry average of 13.88%.
The 3 year average ROIC (5.43%) for WEN is below the current ROIC(6.04%), indicating increased profibility in the last year.
| 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 67.91% of its industry peers.
In the last couple of years the Profit Margin of WEN has grown nicely.
Looking at the Operating Margin, with a value of 16.79%, WEN is in the better half of the industry, outperforming 73.13% of the companies in the same industry.
In the last couple of years the Operating Margin of WEN has remained more or less at the same level.
With a decent Gross Margin value of 63.24%, WEN is doing good in the industry, outperforming 76.12% of the companies in the same industry.
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so WEN is destroying value.
Compared to 1 year ago, WEN has less shares outstanding
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
WEN has an Altman-Z score of 1.14. This is a bad value and indicates that WEN is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.14, WEN is doing worse than 60.45% of the companies in the same industry.
WEN has a debt to FCF ratio of 13.58. This is a negative value and a sign of low solvency as WEN would need 13.58 years to pay back of 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 50.75% of the companies in the same industry.
A Debt/Equity ratio of 24.88 is on the high side and indicates that WEN has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 24.88, WEN is doing worse than 67.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 24.88 | ||
| Debt/FCF | 13.58 | ||
| Altman-Z | 1.14 |
ROIC/WACC0.82
WACC7.36%
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 better Current ratio (1.49) than 73.88% 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.
Looking at the Quick ratio, with a value of 1.47, WEN is in the better half of the industry, outperforming 74.63% 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%.
Measured over the past years, WEN shows a quite strong growth in Earnings Per Share. The EPS has been growing by 11.13% on average per year.
Looking at the last year, WEN shows a small growth in Revenue. The Revenue has grown by 2.18% in the last 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
Based on estimates for the next years, WEN will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.08% on average per year.
Based on estimates for the next years, WEN will show a small growth in Revenue. The Revenue will grow by 3.35% on average per year.
EPS Next Y-3.56%
EPS Next 2Y3.14%
EPS Next 3Y4.63%
EPS Next 5Y8.08%
Revenue Next Year-1.46%
Revenue Next 2Y1.3%
Revenue Next 3Y1.84%
Revenue Next 5Y3.35%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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
WEN is valuated reasonably with a Price/Earnings ratio of 11.45.
Compared to the rest of the industry, the Price/Earnings ratio of WEN indicates a rather cheap valuation: WEN is cheaper than 88.06% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 26.19. WEN is valued rather cheaply when compared to this.
WEN is valuated reasonably with a Price/Forward Earnings ratio of 10.44.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WEN indicates a rather cheap valuation: WEN is cheaper than 85.07% of the companies listed in the same industry.
WEN is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.13, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.45 | ||
| Fwd PE | 10.44 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WEN is valued a bit cheaper than 68.66% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, WEN is valued cheaper than 95.52% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.67 | ||
| EV/EBITDA | 9.61 |
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)1.03
EPS Next 2Y3.14%
EPS Next 3Y4.63%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 7.66%, WEN is a good candidate for dividend investing.
The stock price of WEN dropped by -28.32% 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.
WEN's Dividend Yield is rather good when compared to the industry average which is at 3.87. WEN pays more dividend than 95.52% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, WEN pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.66% |
5.2 History
On average, the dividend of WEN grows each year by 32.37%, which is quite nice.
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 Years3
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 2Y3.14%
EPS Next 3Y4.63%
11.11
-0.07 (-0.63%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners92.71%
Inst Owner Change3.48%
Ins Owners8.32%
Ins Owner Change0.69%
Market Cap2.13B
Analysts64.85
Price Target15.17 (36.54%)
Short Float %9.74%
Short Ratio3.3
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.66% |
Yearly Dividend1
Dividend Growth(5Y)32.37%
DP105.69%
Div Incr Years3
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)-12.97%
PT rev (3m)-12.97%
EPS NQ rev (1m)-7.85%
EPS NQ rev (3m)-10.6%
EPS NY rev (1m)-4.43%
EPS NY rev (3m)-4.78%
Revenue NQ rev (1m)-2.88%
Revenue NQ rev (3m)-3.75%
Revenue NY rev (1m)-2.11%
Revenue NY rev (3m)-2.84%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.45 | ||
| Fwd PE | 10.44 | ||
| P/S | 0.95 | ||
| P/FCF | 8.67 | ||
| P/OCF | 6.26 | ||
| P/B | 16.38 | ||
| P/tB | N/A | ||
| EV/EBITDA | 9.61 |
EPS(TTM)0.97
EY8.73%
EPS(NY)1.06
Fwd EY9.57%
FCF(TTM)1.28
FCFY11.53%
OCF(TTM)1.77
OCFY15.97%
SpS11.64
BVpS0.68
TBVpS-9.51
PEG (NY)N/A
PEG (5Y)1.03
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 | 1.14 |
F-Score6
WACC7.36%
ROIC/WACC0.82
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-3.56%
EPS Next 2Y3.14%
EPS Next 3Y4.63%
EPS Next 5Y8.08%
Revenue 1Y (TTM)2.18%
Revenue growth 3Y5.8%
Revenue growth 5Y5.62%
Sales Q2Q%-2.11%
Revenue Next Year-1.46%
Revenue Next 2Y1.3%
Revenue Next 3Y1.84%
Revenue Next 5Y3.35%
EBIT growth 1Y-2.02%
EBIT growth 3Y4.25%
EBIT growth 5Y6.41%
EBIT Next Year43.02%
EBIT Next 3Y15.67%
EBIT Next 5Y12.37%
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%