WPP PLC-SPONSORED ADR (WPP) Stock Fundamental Analysis
NYSE:WPP - New York Stock Exchange, Inc. - US92937A1025 - ADR - Currency: USD
We assign a fundamental rating of 4 out of 10 to WPP. WPP was compared to 97 industry peers in the Media industry. WPP has a medium profitability rating, but doesn't score so well on its financial health evaluation. WPP has a bad growth rate and is valued cheaply.
1. Profitability
1.1 Basic Checks
WPP had positive earnings in the past year.
WPP had a positive operating cash flow in the past year.
Of the past 5 years WPP 4 years were profitable.
Each year in the past 5 years WPP had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 2.12%, WPP is in the better half of the industry, outperforming 73.20% of the companies in the same industry.
With an excellent Return On Equity value of 15.60%, WPP belongs to the best of the industry, outperforming 86.60% of the companies in the same industry.
WPP has a Return On Invested Capital of 7.82%. This is in the better half of the industry: WPP outperforms 79.38% of its industry peers.
WPP had an Average Return On Invested Capital over the past 3 years of 5.88%. This is in line with the industry average of 7.03%.
The 3 year average ROIC (5.88%) 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)5.88%
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 72.16% of its industry peers.
WPP's Profit Margin has declined in the last couple of years.
With a Operating Margin value of 8.99%, WPP perfoms like the industry average, outperforming 59.79% of the companies in the same industry.
WPP's Operating Margin has declined in the last couple of years.
WPP has a worse Gross Margin (16.63%) than 77.32% of its industry peers.
In the last couple of years the Gross Margin of WPP has declined.
| 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.
The number of shares outstanding for WPP has been increased compared to 1 year ago.
Compared to 5 years ago, WPP has less shares outstanding
Compared to 1 year ago, WPP has an improved debt to assets ratio.
2.2 Solvency
WPP has an Altman-Z score of 0.99. This is a bad value and indicates that WPP is not financially healthy and even has some risk of bankruptcy.
WPP has a Altman-Z score (0.99) which is in line with its industry peers.
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.
WPP's Debt to FCF ratio of 5.42 is fine compared to the rest of the industry. WPP outperforms 73.20% of its industry peers.
WPP has a Debt/Equity ratio of 1.59. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.59, WPP is not doing good in the industry: 62.89% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.59 | ||
| Debt/FCF | 5.42 | ||
| Altman-Z | 0.99 |
ROIC/WACC1.24
WACC6.29%
2.3 Liquidity
A Current Ratio of 0.88 indicates that WPP may have some problems paying its short term obligations.
WPP has a worse Current ratio (0.88) than 72.16% of its industry peers.
A Quick Ratio of 0.88 indicates that WPP may have some problems paying its short term obligations.
WPP has a Quick ratio of 0.88. This is in the lower half of the industry: WPP underperforms 71.13% of its industry peers.
| 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%.
Measured over the past years, WPP shows a decrease in Earnings Per Share. The EPS has been decreasing by -0.97% on average per year.
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
The Earnings Per Share is expected to decrease by -0.16% on average over the next years.
The Revenue is expected to grow by 2.31% on average over the next years.
EPS Next Y-0.54%
EPS Next 2Y0.6%
EPS Next 3Y1.57%
EPS Next 5Y-0.16%
Revenue Next Year-2.75%
Revenue Next 2Y-0.43%
Revenue Next 3Y0.49%
Revenue Next 5Y2.31%
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
WPP is valuated cheaply with a Price/Earnings ratio of 6.18.
Compared to the rest of the industry, the Price/Earnings ratio of WPP indicates a rather cheap valuation: WPP is cheaper than 87.63% of the companies listed in the same industry.
WPP is valuated cheaply when we compare the Price/Earnings ratio to 28.79, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 6.21, the valuation of WPP can be described as very cheap.
WPP's Price/Forward Earnings ratio is rather cheap when compared to the industry. WPP is cheaper than 95.88% of the companies in the same industry.
WPP's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.18 | ||
| Fwd PE | 6.21 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WPP is valued cheaper than 84.54% of the companies in the same industry.
WPP's Price/Free Cash Flow ratio is rather cheap when compared to the industry. WPP is cheaper than 86.60% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.13 | ||
| EV/EBITDA | 5.34 |
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
With a Yearly Dividend Yield of 7.04%, WPP is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 4.98, WPP pays a better dividend. On top of this WPP pays more dividend than 92.78% of the companies listed in the same industry.
WPP's Dividend Yield is rather good when compared to the S&P500 average which is at 2.47.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.04% |
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%
37.08
-0.43 (-1.15%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryMedia
Earnings (Last)
Earnings (Next)
Inst Owners68.91%
Inst Owner Change-0.1%
Ins Owners0.18%
Ins Owner Change0%
Market Cap8.00B
Analysts70.4
Price Target49.35 (33.09%)
Short Float %0.12%
Short Ratio0.75
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.04% |
Yearly Dividend2.68
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)-8.63%
PT rev (3m)-10.54%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)-1.78%
EPS NY rev (3m)-1.89%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0.1%
Revenue NY rev (3m)-2.91%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.18 | ||
| Fwd PE | 6.21 | ||
| P/S | 0.41 | ||
| P/FCF | 5.13 | ||
| P/OCF | 4.27 | ||
| P/B | 1.73 | ||
| P/tB | N/A | ||
| EV/EBITDA | 5.34 |
EPS(TTM)6
EY16.18%
EPS(NY)5.97
Fwd EY16.11%
FCF(TTM)7.23
FCFY19.5%
OCF(TTM)8.69
OCFY23.43%
SpS90.96
BVpS21.44
TBVpS-30.06
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)5.88%
ROIC(5y)N/A
ROICexc(3y)7.69%
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 3Y4.77%
ROICexc growth 5Y-10.11%
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 | 0.99 |
F-Score7
WACC6.29%
ROIC/WACC1.24
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-0.16%
Revenue 1Y (TTM)-0.7%
Revenue growth 3Y4.82%
Revenue growth 5Y2.18%
Sales Q2Q%-1.44%
Revenue Next Year-2.75%
Revenue Next 2Y-0.43%
Revenue Next 3Y0.49%
Revenue Next 5Y2.31%
EBIT growth 1Y149.53%
EBIT growth 3Y2.54%
EBIT growth 5Y0.45%
EBIT Next Year26.26%
EBIT Next 3Y9.86%
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%