WENDY'S CO/THE (WEN) Stock Fundamental Analysis
USA - NASDAQ:WEN - US95058W1009 - Common Stock
8.71 USD
-0.12 (-1.36%)
8.6798 USD
-0.03 (-0.35%)
We assign a fundamental rating of 5 out of 10 to WEN. WEN was compared to 135 industry peers in the Hotels, Restaurants & Leisure industry. While WEN belongs to the best of the industry regarding profitability, there are concerns on its financial health. WEN is cheap, but on the other hand it scores bad on growth.
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.
In the past 5 years WEN has always been profitable.
WEN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of WEN (3.92%) is comparable to the rest of the industry.
WEN has a Return On Equity of 170.14%. This is amongst the best in the industry. WEN outperforms 99.26% of its industry peers.
With a Return On Invested Capital value of 6.16%, WEN perfoms like the industry average, outperforming 56.30% of the companies in the same industry.
WEN had an Average Return On Invested Capital over the past 3 years of 5.43%. This is significantly below the industry average of 15.69%.
The last Return On Invested Capital (6.16%) for WEN is above the 3 year average (5.43%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.92% | ||
| ROE | 170.14% | ||
| ROIC | 6.16% |
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
With a decent Profit Margin value of 8.63%, WEN is doing good in the industry, outperforming 69.63% of the companies in the same industry.
WEN's Profit Margin has improved in the last couple of years.
WEN has a Operating Margin of 17.15%. This is in the better half of the industry: WEN outperforms 74.81% of its industry peers.
In the last couple of years the Operating Margin of WEN has remained more or less at the same level.
WEN has a Gross Margin of 63.17%. This is in the better half of the industry: WEN outperforms 76.30% of its industry peers.
WEN's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.15% | ||
| PM (TTM) | 8.63% | ||
| GM | 63.17% |
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.
Compared to 1 year ago, WEN has less shares outstanding
WEN has less shares outstanding than it did 5 years ago.
WEN has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.09, we must say that WEN is in the distress zone and has some risk of bankruptcy.
WEN's Altman-Z score of 1.09 is on the low side compared to the rest of the industry. WEN is outperformed by 65.19% of its industry peers.
WEN has a debt to FCF ratio of 13.03. This is a negative value and a sign of low solvency as WEN would need 13.03 years to pay back of all of its debts.
With a Debt to FCF ratio value of 13.03, WEN perfoms like the industry average, outperforming 51.85% of the companies in the same industry.
WEN has a Debt/Equity ratio of 28.74. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of WEN (28.74) is worse than 68.89% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 28.74 | ||
| Debt/FCF | 13.03 | ||
| Altman-Z | 1.09 |
ROIC/WACC0.95
WACC6.51%
2.3 Liquidity
A Current Ratio of 1.45 indicates that WEN should not have too much problems paying its short term obligations.
WEN's Current ratio of 1.45 is fine compared to the rest of the industry. WEN outperforms 71.85% of its industry peers.
WEN has a Quick Ratio of 1.43. This is a normal value and indicates that WEN is financially healthy and should not expect problems in meeting its short term obligations.
WEN's Quick ratio of 1.43 is fine compared to the rest of the industry. WEN outperforms 74.81% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.45 | ||
| Quick Ratio | 1.43 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 1.02% over the past year.
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.
The Revenue has been growing slightly by 1.31% in the past year.
WEN shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.62% yearly.
EPS 1Y (TTM)1.02%
EPS 3Y6.84%
EPS 5Y11.13%
EPS Q2Q%7.41%
Revenue 1Y (TTM)1.31%
Revenue growth 3Y5.8%
Revenue growth 5Y5.62%
Sales Q2Q%-1.72%
3.2 Future
Based on estimates for the next years, WEN will show a small growth in Earnings Per Share. The EPS will grow by 7.17% on average per year.
The Revenue is expected to grow by 2.19% on average over the next years.
EPS Next Y-12.92%
EPS Next 2Y-2.54%
EPS Next 3Y1.81%
EPS Next 5Y7.17%
Revenue Next Year-3.95%
Revenue Next 2Y-0.44%
Revenue Next 3Y0.5%
Revenue Next 5Y2.19%
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
With a Price/Earnings ratio of 8.80, the valuation of WEN can be described as very reasonable.
WEN's Price/Earnings ratio is rather cheap when compared to the industry. WEN is cheaper than 94.81% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.02. WEN is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 9.17, the valuation of WEN can be described as very reasonable.
Based on the Price/Forward Earnings ratio, WEN is valued cheaply inside the industry as 89.63% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of WEN to the average of the S&P500 Index (22.57), we can say WEN is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.8 | ||
| Fwd PE | 9.17 |
4.2 Price Multiples
71.85% of the companies in the same industry are more expensive than WEN, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, WEN is valued cheaply inside the industry as 97.78% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.46 | ||
| EV/EBITDA | 8.77 |
4.3 Compensation for Growth
The decent profitability rating of WEN may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.79
EPS Next 2Y-2.54%
EPS Next 3Y1.81%
5. Dividend
5.1 Amount
WEN has a Yearly Dividend Yield of 6.34%, which is a nice return.
The stock price of WEN dropped by -20.96% 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 7.00. WEN pays more dividend than 96.30% of the companies in the same industry.
WEN's Dividend Yield is rather good when compared to the S&P500 average which is at 2.43.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.34% |
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
92.71% 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.
DP92.71%
EPS Next 2Y-2.54%
EPS Next 3Y1.81%
8.71
-0.12 (-1.36%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners98.47%
Inst Owner Change0.02%
Ins Owners8.86%
Ins Owner Change0.55%
Market Cap1.66B
Analysts63.03
Price Target11.39 (30.77%)
Short Float %12.56%
Short Ratio2.96
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.34% |
Yearly Dividend1
Dividend Growth(5Y)32.37%
DP92.71%
Div Incr Years0
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)6.16%
Min EPS beat(2)-0.22%
Max EPS beat(2)12.55%
EPS beat(4)2
Avg EPS beat(4)3.16%
Min EPS beat(4)-1.97%
Max EPS beat(4)12.55%
EPS beat(8)4
Avg EPS beat(8)1.42%
EPS beat(12)8
Avg EPS beat(12)2.26%
EPS beat(16)11
Avg EPS beat(16)2.12%
Revenue beat(2)0
Avg Revenue beat(2)-0.96%
Min Revenue beat(2)-1.35%
Max Revenue beat(2)-0.56%
Revenue beat(4)2
Avg Revenue beat(4)-0.23%
Min Revenue beat(4)-1.35%
Max Revenue beat(4)0.88%
Revenue beat(8)2
Avg Revenue beat(8)-1.14%
Revenue beat(12)3
Avg Revenue beat(12)-1.13%
Revenue beat(16)4
Avg Revenue beat(16)-1.05%
PT rev (1m)-3.11%
PT rev (3m)-21.43%
EPS NQ rev (1m)-1.01%
EPS NQ rev (3m)-21.45%
EPS NY rev (1m)-0.64%
EPS NY rev (3m)-9.76%
Revenue NQ rev (1m)-0.33%
Revenue NQ rev (3m)-4.22%
Revenue NY rev (1m)-0.28%
Revenue NY rev (3m)-2.78%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.8 | ||
| Fwd PE | 9.17 | ||
| P/S | 0.75 | ||
| P/FCF | 6.46 | ||
| P/OCF | 4.66 | ||
| P/B | 14.7 | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.77 |
EPS(TTM)0.99
EY11.37%
EPS(NY)0.95
Fwd EY10.9%
FCF(TTM)1.35
FCFY15.48%
OCF(TTM)1.87
OCFY21.44%
SpS11.68
BVpS0.59
TBVpS-9.63
PEG (NY)N/A
PEG (5Y)0.79
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.92% | ||
| ROE | 170.14% | ||
| ROCE | 8.52% | ||
| ROIC | 6.16% | ||
| ROICexc | 6.57% | ||
| ROICexgc | 12.26% | ||
| OM | 17.15% | ||
| PM (TTM) | 8.63% | ||
| GM | 63.17% | ||
| FCFM | 11.54% |
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 | 28.74 | ||
| Debt/FCF | 13.03 | ||
| Debt/EBITDA | 5.99 | ||
| Cap/Depr | 62% | ||
| Cap/Sales | 4.45% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 65.75% | ||
| Profit Quality | 133.75% | ||
| Current Ratio | 1.45 | ||
| Quick Ratio | 1.43 | ||
| Altman-Z | 1.09 |
F-Score6
WACC6.51%
ROIC/WACC0.95
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)1.02%
EPS 3Y6.84%
EPS 5Y11.13%
EPS Q2Q%7.41%
EPS Next Y-12.92%
EPS Next 2Y-2.54%
EPS Next 3Y1.81%
EPS Next 5Y7.17%
Revenue 1Y (TTM)1.31%
Revenue growth 3Y5.8%
Revenue growth 5Y5.62%
Sales Q2Q%-1.72%
Revenue Next Year-3.95%
Revenue Next 2Y-0.44%
Revenue Next 3Y0.5%
Revenue Next 5Y2.19%
EBIT growth 1Y2.22%
EBIT growth 3Y4.25%
EBIT growth 5Y6.41%
EBIT Next Year37.36%
EBIT Next 3Y13.87%
EBIT Next 5Y10.94%
FCF growth 1Y17.59%
FCF growth 3Y-0.86%
FCF growth 5Y4.01%
OCF growth 1Y17.36%
OCF growth 3Y0.91%
OCF growth 5Y4.22%