WESTROCK CO (WRK) Stock Fundamental Analysis
NYSE:WRK - New York Stock Exchange, Inc. - US96145D1054 - Common Stock - Currency: USD
Taking everything into account, WRK scores 2 out of 10 in our fundamental rating. WRK was compared to 23 industry peers in the Containers & Packaging industry. WRK may be in some trouble as it scores bad on both profitability and health. WRK does not seem to be growing, but still is valued expensively.
1. Profitability
1.1 Basic Checks
WRK had positive earnings in the past year.
WRK had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: WRK reported negative net income in multiple years.
WRK had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
WRK has a Return On Assets of 1.13%. This is in the lower half of the industry: WRK underperforms 65.22% of its industry peers.
WRK's Return On Equity of 3.03% is on the low side compared to the rest of the industry. WRK is outperformed by 65.22% of its industry peers.
With a Return On Invested Capital value of 3.67%, WRK is not doing good in the industry: 73.91% of the companies in the same industry are doing better.
WRK had an Average Return On Invested Capital over the past 3 years of 4.59%. This is below the industry average of 7.70%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.13% | ||
| ROE | 3.03% | ||
| ROIC | 3.67% |
ROA(3y)0.06%
ROA(5y)0.13%
ROE(3y)-0.3%
ROE(5y)0%
ROIC(3y)4.59%
ROIC(5y)4.4%
1.3 Margins
Looking at the Profit Margin, with a value of 1.57%, WRK is doing worse than 65.22% of the companies in the same industry.
The Operating Margin of WRK (5.37%) is worse than 73.91% of its industry peers.
In the last couple of years the Operating Margin of WRK has declined.
WRK's Gross Margin of 17.67% is on the low side compared to the rest of the industry. WRK is outperformed by 78.26% of its industry peers.
In the last couple of years the Gross Margin of WRK has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.37% | ||
| PM (TTM) | 1.57% | ||
| GM | 17.67% |
OM growth 3Y-3.18%
OM growth 5Y-8.29%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.99%
GM growth 5Y-3.08%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so WRK is destroying value.
The number of shares outstanding for WRK has been increased compared to 1 year ago.
Compared to 5 years ago, WRK has more shares outstanding
Compared to 1 year ago, WRK has a worse debt to assets ratio.
2.2 Solvency
WRK has an Altman-Z score of 1.40. This is a bad value and indicates that WRK is not financially healthy and even has some risk of bankruptcy.
WRK has a worse Altman-Z score (1.40) than 78.26% of its industry peers.
WRK has a debt to FCF ratio of 19.15. This is a negative value and a sign of low solvency as WRK would need 19.15 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 19.15, WRK is doing worse than 65.22% of the companies in the same industry.
WRK has a Debt/Equity ratio of 0.77. This is a neutral value indicating WRK is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.77, WRK is in the better half of the industry, outperforming 73.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | 19.15 | ||
| Altman-Z | 1.4 |
ROIC/WACC0.51
WACC7.16%
2.3 Liquidity
WRK has a Current Ratio of 1.34. This is a normal value and indicates that WRK is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of WRK (1.34) is comparable to the rest of the industry.
WRK has a Quick Ratio of 1.34. This is a bad value and indicates that WRK is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of WRK (0.85) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.34 | ||
| Quick Ratio | 0.85 |
3. Growth
3.1 Past
WRK shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -46.62%.
WRK shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -5.84% yearly.
Looking at the last year, WRK shows a decrease in Revenue. The Revenue has decreased by -7.89% in the last year.
WRK shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.52% yearly.
EPS 1Y (TTM)-46.62%
EPS 3Y3.3%
EPS 5Y-5.84%
EPS Q2Q%-49.35%
Revenue 1Y (TTM)-7.89%
Revenue growth 3Y4.93%
Revenue growth 5Y4.52%
Sales Q2Q%-10.44%
3.2 Future
Based on estimates for the next years, WRK will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.14% on average per year.
The Revenue is expected to grow by 1.08% on average over the next years.
EPS Next Y-28.93%
EPS Next 2Y9.37%
EPS Next 3Y11.37%
EPS Next 5Y11.14%
Revenue Next Year-4.97%
Revenue Next 2Y-0.29%
Revenue Next 3Y0.27%
Revenue Next 5Y1.08%
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 decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
WRK is valuated rather expensively with a Price/Earnings ratio of 22.49.
WRK's Price/Earnings ratio is a bit more expensive when compared to the industry. WRK is more expensive than 65.22% of the companies in the same industry.
WRK is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.85, which is the current average of the S&P500 Index.
WRK is valuated correctly with a Price/Forward Earnings ratio of 14.26.
WRK's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of WRK to the average of the S&P500 Index (20.77), we can say WRK is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.49 | ||
| Fwd PE | 14.26 |
4.2 Price Multiples
WRK's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. WRK is cheaper than 60.87% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, WRK is valued a bit more expensive than 65.22% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.18 | ||
| EV/EBITDA | 8.46 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y9.37%
EPS Next 3Y11.37%
5. Dividend
5.1 Amount
WRK has a Yearly Dividend Yield of 2.43%.
Compared to an average industry Dividend Yield of 3.23, WRK pays a bit more dividend than its industry peers.
WRK's Dividend Yield is comparable with the S&P500 average which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.43% |
5.2 History
The dividend of WRK decreases each year by -8.63%.
WRK has been paying a dividend for at least 10 years, so it has a reliable track record.
WRK has decreased its dividend in the last 3 years.
Dividend Growth(5Y)-8.63%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
WRK pays out 97.28% of its income as dividend. This is not a sustainable payout ratio.
DP97.28%
EPS Next 2Y9.37%
EPS Next 3Y11.37%
51.51
+1.76 (+3.54%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryContainers & Packaging
Earnings (Last)
Earnings (Next)
Inst Owners6.59%
Inst Owner Change0%
Ins Owners1.02%
Ins Owner Change0%
Market Cap13.30B
Analysts71.67
Price Target54.37 (5.55%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.43% |
Yearly Dividend1.1
Dividend Growth(5Y)-8.63%
DP97.28%
Div Incr Years2
Div Non Decr Years2
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)12.23%
Min EPS beat(2)-42.7%
Max EPS beat(2)67.16%
EPS beat(4)3
Avg EPS beat(4)30%
Min EPS beat(4)-42.7%
Max EPS beat(4)86.52%
EPS beat(8)6
Avg EPS beat(8)21.28%
EPS beat(12)10
Avg EPS beat(12)16.22%
EPS beat(16)13
Avg EPS beat(16)16.85%
Revenue beat(2)0
Avg Revenue beat(2)-3.05%
Min Revenue beat(2)-4.6%
Max Revenue beat(2)-1.49%
Revenue beat(4)0
Avg Revenue beat(4)-2.82%
Min Revenue beat(4)-4.6%
Max Revenue beat(4)-1.49%
Revenue beat(8)0
Avg Revenue beat(8)-2.32%
Revenue beat(12)3
Avg Revenue beat(12)-1.06%
Revenue beat(16)4
Avg Revenue beat(16)-1%
PT rev (1m)0%
PT rev (3m)19.62%
EPS NQ rev (1m)1.19%
EPS NQ rev (3m)-0.7%
EPS NY rev (1m)0.37%
EPS NY rev (3m)1.56%
Revenue NQ rev (1m)0.1%
Revenue NQ rev (3m)-0.92%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.49 | ||
| Fwd PE | 14.26 | ||
| P/S | 0.68 | ||
| P/FCF | 28.18 | ||
| P/OCF | 8.32 | ||
| P/B | 1.32 | ||
| P/tB | 3.94 | ||
| EV/EBITDA | 8.46 |
EPS(TTM)2.29
EY4.45%
EPS(NY)3.61
Fwd EY7.01%
FCF(TTM)1.83
FCFY3.55%
OCF(TTM)6.19
OCFY12.02%
SpS75.37
BVpS38.99
TBVpS13.08
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.13% | ||
| ROE | 3.03% | ||
| ROCE | 4.72% | ||
| ROIC | 3.67% | ||
| ROICexc | 3.76% | ||
| ROICexgc | 5.44% | ||
| OM | 5.37% | ||
| PM (TTM) | 1.57% | ||
| GM | 17.67% | ||
| FCFM | 2.43% |
ROA(3y)0.06%
ROA(5y)0.13%
ROE(3y)-0.3%
ROE(5y)0%
ROIC(3y)4.59%
ROIC(5y)4.4%
ROICexc(3y)4.65%
ROICexc(5y)4.44%
ROICexgc(3y)7.13%
ROICexgc(5y)7.05%
ROCE(3y)5.89%
ROCE(5y)5.66%
ROICexcg growth 3Y3.04%
ROICexcg growth 5Y-7.16%
ROICexc growth 3Y6.65%
ROICexc growth 5Y-4.49%
OM growth 3Y-3.18%
OM growth 5Y-8.29%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.99%
GM growth 5Y-3.08%
F-Score5
Asset Turnover0.72
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | 19.15 | ||
| Debt/EBITDA | 2.99 | ||
| Cap/Depr | 73.32% | ||
| Cap/Sales | 5.79% | ||
| Interest Coverage | 2.19 | ||
| Cash Conversion | 61.92% | ||
| Profit Quality | 154.77% | ||
| Current Ratio | 1.34 | ||
| Quick Ratio | 0.85 | ||
| Altman-Z | 1.4 |
F-Score5
WACC7.16%
ROIC/WACC0.51
Cap/Depr(3y)62.72%
Cap/Depr(5y)68.91%
Cap/Sales(3y)4.68%
Cap/Sales(5y)5.42%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-46.62%
EPS 3Y3.3%
EPS 5Y-5.84%
EPS Q2Q%-49.35%
EPS Next Y-28.93%
EPS Next 2Y9.37%
EPS Next 3Y11.37%
EPS Next 5Y11.14%
Revenue 1Y (TTM)-7.89%
Revenue growth 3Y4.93%
Revenue growth 5Y4.52%
Sales Q2Q%-10.44%
Revenue Next Year-4.97%
Revenue Next 2Y-0.29%
Revenue Next 3Y0.27%
Revenue Next 5Y1.08%
EBIT growth 1Y-34.44%
EBIT growth 3Y1.6%
EBIT growth 5Y-4.15%
EBIT Next Year97.6%
EBIT Next 3Y34.37%
EBIT Next 5Y20.78%
FCF growth 1Y-60.82%
FCF growth 3Y-14.38%
FCF growth 5Y-5.94%
OCF growth 1Y-22.8%
OCF growth 3Y-4.07%
OCF growth 5Y-1.09%