WPP PLC-SPONSORED ADR (WPP) Stock Fundamental Analysis
NYSE:WPP - New York Stock Exchange, Inc. - US92937A1025 - ADR - Currency: USD
Overall WPP gets a fundamental rating of 4 out of 10. We evaluated WPP against 97 industry peers in the Media industry. There are concerns on the financial health of WPP while its profitability can be described as average. WPP is valued quite cheap, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
WPP had positive earnings in the past year.
In the past year WPP had a positive cash flow from operations.
WPP had positive earnings in 4 of the past 5 years.
In the past 5 years WPP always reported a positive cash flow from operatings.
1.2 Ratios
WPP has a Return On Assets of 2.12%. This is in the better half of the industry: WPP outperforms 70.10% of its industry peers.
WPP has a better Return On Equity (15.60%) than 83.51% of its industry peers.
Looking at the Return On Invested Capital, with a value of 7.82%, WPP is in the better half of the industry, outperforming 78.35% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for WPP is in line with the industry average of 7.63%.
The 3 year average ROIC (5.83%) for WPP is below the current ROIC(7.82%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.12% | ||
| ROE | 15.6% | ||
| ROIC | 7.82% |
ROA(3y)1.64%
ROA(5y)-0.2%
ROE(3y)12.47%
ROE(5y)-1.53%
ROIC(3y)5.83%
ROIC(5y)N/A
1.3 Margins
WPP has a Profit Margin of 3.68%. This is in the better half of the industry: WPP outperforms 70.10% of its industry peers.
WPP's Profit Margin has declined in the last couple of years.
WPP has a Operating Margin (8.99%) which is comparable to the rest of the industry.
In the last couple of years the Operating Margin of WPP has declined.
Looking at the Gross Margin, with a value of 16.63%, WPP is doing worse than 80.41% of the companies in the same industry.
WPP's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.99% | ||
| PM (TTM) | 3.68% | ||
| GM | 16.63% |
OM growth 3Y-2.17%
OM growth 5Y-1.7%
PM growth 3Y-9.63%
PM growth 5Y-10.43%
GM growth 3Y-1.15%
GM growth 5Y-1.79%
2. Health
2.1 Basic Checks
WPP has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, WPP has more shares outstanding
The number of shares outstanding for WPP has been reduced compared to 5 years ago.
The debt/assets ratio for WPP has been reduced compared to a year ago.
2.2 Solvency
WPP has an Altman-Z score of 0.98. This is a bad value and indicates that WPP is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of WPP (0.98) is comparable to the rest of the industry.
WPP has a debt to FCF ratio of 5.42. This is a neutral value as WPP would need 5.42 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 5.42, WPP is doing good in the industry, outperforming 71.13% of the companies in the same industry.
WPP has a Debt/Equity ratio of 1.59. This is a high value indicating a heavy dependency on external financing.
WPP's Debt to Equity ratio of 1.59 is on the low side compared to the rest of the industry. WPP is outperformed by 67.01% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.59 | ||
| Debt/FCF | 5.42 | ||
| Altman-Z | 0.98 |
ROIC/WACC1.19
WACC6.57%
2.3 Liquidity
WPP has a Current Ratio of 0.88. This is a bad value and indicates that WPP is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of WPP (0.88) is worse than 75.26% of its industry peers.
WPP has a Quick Ratio of 0.88. This is a bad value and indicates that WPP is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.88, WPP is doing worse than 74.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.88 | ||
| Quick Ratio | 0.88 |
3. Growth
3.1 Past
WPP shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -5.86%.
The Earnings Per Share has been decreasing by -0.97% on average over the past years.
Looking at the last year, WPP shows a decrease in Revenue. The Revenue has decreased by -0.70% in the last year.
WPP shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.18% yearly.
EPS 1Y (TTM)-5.86%
EPS 3Y4%
EPS 5Y-0.97%
EPS Q2Q%-5.44%
Revenue 1Y (TTM)-0.7%
Revenue growth 3Y4.82%
Revenue growth 5Y2.18%
Sales Q2Q%-1.44%
3.2 Future
WPP is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -0.23% yearly.
WPP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.31% yearly.
EPS Next Y-0.54%
EPS Next 2Y0.6%
EPS Next 3Y1.57%
EPS Next 5Y-0.23%
Revenue Next Year-5.23%
Revenue Next 2Y-1.94%
Revenue Next 3Y-0.27%
Revenue Next 5Y2.31%
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 accelerating.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 5.72, the valuation of WPP can be described as very cheap.
Compared to the rest of the industry, the Price/Earnings ratio of WPP indicates a rather cheap valuation: WPP is cheaper than 89.69% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.34, WPP is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 5.75, the valuation of WPP can be described as very cheap.
Based on the Price/Forward Earnings ratio, WPP is valued cheaper than 86.60% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of WPP to the average of the S&P500 Index (22.19), we can say WPP is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.72 | ||
| Fwd PE | 5.75 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WPP is valued cheaper than 88.66% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, WPP is valued cheaply inside the industry as 88.66% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.75 | ||
| EV/EBITDA | 5.1 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y0.6%
EPS Next 3Y1.57%
5. Dividend
5.1 Amount
WPP has a Yearly Dividend Yield of 7.06%, which is a nice return.
WPP's Dividend Yield is rather good when compared to the industry average which is at 4.98. WPP pays more dividend than 91.75% of the companies in the same industry.
WPP's Dividend Yield is rather good when compared to the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.06% |
5.2 History
The dividend of WPP decreases each year by -7.91%.
WPP has been paying a dividend for at least 10 years, so it has a reliable track record.
WPP has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)-7.91%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
WPP pays out 78.41% of its income as dividend. This is not a sustainable payout ratio.
The Dividend Rate of WPP has been decling, while earnings will also be declining. This means the current dividend is most likely not sustainable.
DP78.41%
EPS Next 2Y0.6%
EPS Next 3Y1.57%
34.74
-0.49 (-1.39%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryMedia
Earnings (Last)
Earnings (Next)
Inst Owners58.98%
Inst Owner Change0.6%
Ins Owners0.2%
Ins Owner Change0%
Market Cap7.50B
Analysts51.43
Price Target44.54 (28.21%)
Short Float %0.3%
Short Ratio1.99
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.06% |
Yearly Dividend2.73
Dividend Growth(5Y)-7.91%
DP78.41%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)N/A
Avg Revenue beat(2)N/A
Min Revenue beat(2)N/A
Max Revenue beat(2)N/A
Revenue beat(4)N/A
Avg Revenue beat(4)N/A
Min Revenue beat(4)N/A
Max Revenue beat(4)N/A
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)-9.76%
PT rev (3m)-17.55%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)0%
EPS NY rev (3m)-2.94%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0%
Revenue NY rev (3m)-2.46%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.72 | ||
| Fwd PE | 5.75 | ||
| P/S | 0.38 | ||
| P/FCF | 4.75 | ||
| P/OCF | 3.96 | ||
| P/B | 1.6 | ||
| P/tB | N/A | ||
| EV/EBITDA | 5.1 |
EPS(TTM)6.07
EY17.47%
EPS(NY)6.04
Fwd EY17.38%
FCF(TTM)7.31
FCFY21.04%
OCF(TTM)8.78
OCFY25.28%
SpS91.94
BVpS21.67
TBVpS-30.39
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.12% | ||
| ROE | 15.6% | ||
| ROCE | 13.26% | ||
| ROIC | 7.82% | ||
| ROICexc | 10.62% | ||
| ROICexgc | N/A | ||
| OM | 8.99% | ||
| PM (TTM) | 3.68% | ||
| GM | 16.63% | ||
| FCFM | 7.95% |
ROA(3y)1.64%
ROA(5y)-0.2%
ROE(3y)12.47%
ROE(5y)-1.53%
ROIC(3y)5.83%
ROIC(5y)N/A
ROICexc(3y)7.61%
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)10.2%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y3.97%
ROICexc growth 5Y-10.52%
OM growth 3Y-2.17%
OM growth 5Y-1.7%
PM growth 3Y-9.63%
PM growth 5Y-10.43%
GM growth 3Y-1.15%
GM growth 5Y-1.79%
F-Score7
Asset Turnover0.58
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.59 | ||
| Debt/FCF | 5.42 | ||
| Debt/EBITDA | 3.04 | ||
| Cap/Depr | 47.77% | ||
| Cap/Sales | 1.6% | ||
| Interest Coverage | 3.3 | ||
| Cash Conversion | 77.41% | ||
| Profit Quality | 216.24% | ||
| Current Ratio | 0.88 | ||
| Quick Ratio | 0.88 | ||
| Altman-Z | 0.98 |
F-Score7
WACC6.57%
ROIC/WACC1.19
Cap/Depr(3y)36.59%
Cap/Depr(5y)41.42%
Cap/Sales(3y)1.54%
Cap/Sales(5y)1.83%
Profit Quality(3y)403.67%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-5.86%
EPS 3Y4%
EPS 5Y-0.97%
EPS Q2Q%-5.44%
EPS Next Y-0.54%
EPS Next 2Y0.6%
EPS Next 3Y1.57%
EPS Next 5Y-0.23%
Revenue 1Y (TTM)-0.7%
Revenue growth 3Y4.82%
Revenue growth 5Y2.18%
Sales Q2Q%-1.44%
Revenue Next Year-5.23%
Revenue Next 2Y-1.94%
Revenue Next 3Y-0.27%
Revenue Next 5Y2.31%
EBIT growth 1Y149.53%
EBIT growth 3Y2.54%
EBIT growth 5Y0.45%
EBIT Next Year21.17%
EBIT Next 3Y8.43%
EBIT Next 5Y12.95%
FCF growth 1Y14.79%
FCF growth 3Y-12.34%
FCF growth 5Y-4.25%
OCF growth 1Y13.71%
OCF growth 3Y-11.52%
OCF growth 5Y-5.32%