ZIMMER BIOMET HOLDINGS INC (ZBH) Stock Fundamental Analysis
NYSE:ZBH - New York Stock Exchange, Inc. - US98956P1021 - Common Stock - Currency: USD
ZBH gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 189 industry peers in the Health Care Equipment & Supplies industry. While ZBH has a great profitability rating, there are some minor concerns on its financial health. ZBH is valued quite cheap, while showing a decent growth score. This is a good combination! Finally ZBH also has an excellent dividend rating. With these ratings, ZBH could be worth investigating further for value and dividend investing!.
1. Profitability
1.1 Basic Checks
In the past year ZBH was profitable.
ZBH had a positive operating cash flow in the past year.
Of the past 5 years ZBH 4 years were profitable.
ZBH had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ZBH has a Return On Assets of 4.12%. This is amongst the best in the industry. ZBH outperforms 81.48% of its industry peers.
With an excellent Return On Equity value of 7.37%, ZBH belongs to the best of the industry, outperforming 82.01% of the companies in the same industry.
With a decent Return On Invested Capital value of 5.99%, ZBH is doing good in the industry, outperforming 79.89% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ZBH is in line with the industry average of 7.87%.
The 3 year average ROIC (5.98%) for ZBH is below the current ROIC(5.99%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.12% | ||
| ROE | 7.37% | ||
| ROIC | 5.99% |
ROA(3y)3.36%
ROA(5y)2.25%
ROE(3y)5.79%
ROE(5y)3.88%
ROIC(3y)5.98%
ROIC(5y)4.96%
1.3 Margins
ZBH has a Profit Margin of 11.86%. This is amongst the best in the industry. ZBH outperforms 88.89% of its industry peers.
In the last couple of years the Profit Margin of ZBH has declined.
ZBH has a better Operating Margin (19.59%) than 93.12% of its industry peers.
In the last couple of years the Operating Margin of ZBH has grown nicely.
With an excellent Gross Margin value of 71.05%, ZBH belongs to the best of the industry, outperforming 80.95% of the companies in the same industry.
ZBH's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.59% | ||
| PM (TTM) | 11.86% | ||
| GM | 71.05% |
OM growth 3Y9.41%
OM growth 5Y4.28%
PM growth 3Y26.01%
PM growth 5Y-3.65%
GM growth 3Y0.08%
GM growth 5Y0.05%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ZBH is destroying value.
The number of shares outstanding for ZBH has been reduced compared to 1 year ago.
Compared to 5 years ago, ZBH has less shares outstanding
ZBH has a worse debt/assets ratio than last year.
2.2 Solvency
ZBH has an Altman-Z score of 2.57. This is not the best score and indicates that ZBH is in the grey zone with still only limited risk for bankruptcy at the moment.
ZBH has a Altman-Z score of 2.57. This is in the better half of the industry: ZBH outperforms 67.20% of its industry peers.
The Debt to FCF ratio of ZBH is 6.53, which is on the high side as it means it would take ZBH, 6.53 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 6.53, ZBH is in the better half of the industry, outperforming 78.31% of the companies in the same industry.
ZBH has a Debt/Equity ratio of 0.53. This is a neutral value indicating ZBH is somewhat dependend on debt financing.
The Debt to Equity ratio of ZBH (0.53) is worse than 61.90% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 6.53 | ||
| Altman-Z | 2.57 |
ROIC/WACC0.79
WACC7.59%
2.3 Liquidity
A Current Ratio of 2.44 indicates that ZBH has no problem at all paying its short term obligations.
ZBH has a Current ratio (2.44) which is comparable to the rest of the industry.
A Quick Ratio of 1.46 indicates that ZBH should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.46, ZBH is doing worse than 62.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.44 | ||
| Quick Ratio | 1.46 |
3. Growth
3.1 Past
ZBH shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.42%.
Measured over the past 5 years, ZBH shows a small growth in Earnings Per Share. The EPS has been growing by 0.33% on average per year.
The Revenue has been growing slightly by 3.30% in the past year.
ZBH shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.77% yearly.
EPS 1Y (TTM)3.42%
EPS 3Y2.77%
EPS 5Y0.33%
EPS Q2Q%-6.7%
Revenue 1Y (TTM)3.3%
Revenue growth 3Y3.99%
Revenue growth 5Y-0.77%
Sales Q2Q%1.05%
3.2 Future
Based on estimates for the next years, ZBH will show a small growth in Earnings Per Share. The EPS will grow by 7.76% on average per year.
ZBH is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.62% yearly.
EPS Next Y0.79%
EPS Next 2Y2.49%
EPS Next 3Y4.99%
EPS Next 5Y7.76%
Revenue Next Year6.58%
Revenue Next 2Y6.06%
Revenue Next 3Y5.62%
Revenue Next 5Y4.62%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 11.65, the valuation of ZBH can be described as very reasonable.
ZBH's Price/Earnings ratio is rather cheap when compared to the industry. ZBH is cheaper than 92.59% of the companies in the same industry.
When comparing the Price/Earnings ratio of ZBH to the average of the S&P500 Index (25.91), we can say ZBH is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 10.91, the valuation of ZBH can be described as reasonable.
Based on the Price/Forward Earnings ratio, ZBH is valued cheaply inside the industry as 91.01% of the companies are valued more expensively.
ZBH is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.85, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.65 | ||
| Fwd PE | 10.91 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ZBH is valued cheaper than 91.01% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ZBH is valued cheaply inside the industry as 87.83% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.49 | ||
| EV/EBITDA | 9.49 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ZBH does not grow enough to justify the current Price/Earnings ratio.
ZBH has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)14.65
PEG (5Y)35.49
EPS Next 2Y2.49%
EPS Next 3Y4.99%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.01%, ZBH has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.82, ZBH pays a better dividend. On top of this ZBH pays more dividend than 93.65% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, ZBH's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.01% |
5.2 History
The dividend of ZBH has a limited annual growth rate of 0.19%.
ZBH has been paying a dividend for at least 10 years, so it has a reliable track record.
ZBH has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)0.19%
Div Incr Years0
Div Non Decr Years11
5.3 Sustainability
21.28% of the earnings are spent on dividend by ZBH. This is a low number and sustainable payout ratio.
ZBH's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP21.28%
EPS Next 2Y2.49%
EPS Next 3Y4.99%
91.67
-1.07 (-1.15%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Equipment & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners93.34%
Inst Owner Change1.54%
Ins Owners0.08%
Ins Owner Change13.43%
Market Cap18.14B
Analysts70.29
Price Target113.86 (24.21%)
Short Float %3.17%
Short Ratio2.75
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.01% |
Yearly Dividend0.97
Dividend Growth(5Y)0.19%
DP21.28%
Div Incr Years0
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.45%
Min EPS beat(2)-0.34%
Max EPS beat(2)1.25%
EPS beat(4)2
Avg EPS beat(4)0.07%
Min EPS beat(4)-0.7%
Max EPS beat(4)1.25%
EPS beat(8)5
Avg EPS beat(8)0.74%
EPS beat(12)9
Avg EPS beat(12)2.68%
EPS beat(16)12
Avg EPS beat(16)2.85%
Revenue beat(2)0
Avg Revenue beat(2)-0.39%
Min Revenue beat(2)-0.53%
Max Revenue beat(2)-0.26%
Revenue beat(4)1
Avg Revenue beat(4)-0.27%
Min Revenue beat(4)-0.92%
Max Revenue beat(4)0.62%
Revenue beat(8)3
Avg Revenue beat(8)-0.09%
Revenue beat(12)7
Avg Revenue beat(12)1%
Revenue beat(16)8
Avg Revenue beat(16)-1.56%
PT rev (1m)-7.72%
PT rev (3m)-10.29%
EPS NQ rev (1m)-1.61%
EPS NQ rev (3m)-1.85%
EPS NY rev (1m)-2.78%
EPS NY rev (3m)-3.21%
Revenue NQ rev (1m)3.34%
Revenue NQ rev (3m)3.44%
Revenue NY rev (1m)3.56%
Revenue NY rev (3m)2.05%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.65 | ||
| Fwd PE | 10.91 | ||
| P/S | 2.36 | ||
| P/FCF | 16.49 | ||
| P/OCF | 10.96 | ||
| P/B | 1.46 | ||
| P/tB | N/A | ||
| EV/EBITDA | 9.49 |
EPS(TTM)7.87
EY8.59%
EPS(NY)8.4
Fwd EY9.17%
FCF(TTM)5.56
FCFY6.06%
OCF(TTM)8.36
OCFY9.12%
SpS38.91
BVpS62.65
TBVpS-5.37
PEG (NY)14.65
PEG (5Y)35.49
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.12% | ||
| ROE | 7.37% | ||
| ROCE | 7.58% | ||
| ROIC | 5.99% | ||
| ROICexc | 6.44% | ||
| ROICexgc | 23.6% | ||
| OM | 19.59% | ||
| PM (TTM) | 11.86% | ||
| GM | 71.05% | ||
| FCFM | 14.29% |
ROA(3y)3.36%
ROA(5y)2.25%
ROE(3y)5.79%
ROE(5y)3.88%
ROIC(3y)5.98%
ROIC(5y)4.96%
ROICexc(3y)6.12%
ROICexc(5y)5.09%
ROICexgc(3y)23.89%
ROICexgc(5y)20.99%
ROCE(3y)7.57%
ROCE(5y)6.28%
ROICexcg growth 3Y6.94%
ROICexcg growth 5Y-1.82%
ROICexc growth 3Y16.05%
ROICexc growth 5Y5.83%
OM growth 3Y9.41%
OM growth 5Y4.28%
PM growth 3Y26.01%
PM growth 5Y-3.65%
GM growth 3Y0.08%
GM growth 5Y0.05%
F-Score5
Asset Turnover0.35
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 6.53 | ||
| Debt/EBITDA | 2.61 | ||
| Cap/Depr | 54.76% | ||
| Cap/Sales | 7.2% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 65.63% | ||
| Profit Quality | 120.41% | ||
| Current Ratio | 2.44 | ||
| Quick Ratio | 1.46 | ||
| Altman-Z | 2.57 |
F-Score5
WACC7.59%
ROIC/WACC0.79
Cap/Depr(3y)60.17%
Cap/Depr(5y)52.93%
Cap/Sales(3y)7.84%
Cap/Sales(5y)7.09%
Profit Quality(3y)183.11%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)3.42%
EPS 3Y2.77%
EPS 5Y0.33%
EPS Q2Q%-6.7%
EPS Next Y0.79%
EPS Next 2Y2.49%
EPS Next 3Y4.99%
EPS Next 5Y7.76%
Revenue 1Y (TTM)3.3%
Revenue growth 3Y3.99%
Revenue growth 5Y-0.77%
Sales Q2Q%1.05%
Revenue Next Year6.58%
Revenue Next 2Y6.06%
Revenue Next 3Y5.62%
Revenue Next 5Y4.62%
EBIT growth 1Y1.15%
EBIT growth 3Y13.78%
EBIT growth 5Y3.48%
EBIT Next Year33.3%
EBIT Next 3Y13.4%
EBIT Next 5Y9.77%
FCF growth 1Y26.08%
FCF growth 3Y-5.87%
FCF growth 5Y0.84%
OCF growth 1Y22.05%
OCF growth 3Y0%
OCF growth 5Y-1.11%