KLG gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 87 industry peers in the Food Products industry. There are concerns on the financial health of KLG while its profitability can be described as average. KLG is valued correctly, but it does not seem to be growing.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year KLG was profitable.
In the past year KLG had a positive cash flow from operations.
KLG had positive earnings in 4 of the past 5 years.
Each year in the past 5 years KLG had a positive operating cash flow.

1.2 Ratios

Looking at the Return On Assets, with a value of 1.60%, KLG is in line with its industry, outperforming 43.82% of the companies in the same industry.
KLG has a better Return On Equity (9.86%) than 71.91% of its industry peers.
Looking at the Return On Invested Capital, with a value of 9.68%, KLG belongs to the top of the industry, outperforming 82.02% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for KLG is significantly below the industry average of 27.79%.

		Industry Rank	Sector Rank
ROA	1.6%
ROE	9.86%
ROIC	9.68%

ROA(3y)2.58%

ROA(5y)7.05%

ROE(3y)18.58%

ROE(5y)24.2%

ROIC(3y)10.53%

ROIC(5y)12.48%

1.3 Margins

With a Profit Margin value of 1.31%, KLG perfoms like the industry average, outperforming 42.70% of the companies in the same industry.
In the last couple of years the Profit Margin of KLG has declined.
KLG has a Operating Margin of 6.49%. This is in the better half of the industry: KLG outperforms 66.29% of its industry peers.
In the last couple of years the Operating Margin of KLG has grown nicely.
KLG has a better Gross Margin (30.40%) than 69.66% of its industry peers.
In the last couple of years the Gross Margin of KLG has grown nicely.

		Industry Rank	Sector Rank
OM	6.49%
PM (TTM)	1.31%
GM	30.4%

OM growth 3Y62.88%

OM growth 5YN/A

PM growth 3Y-26.09%

PM growth 5YN/A

GM growth 3Y8.37%

GM growth 5YN/A

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so KLG is still creating some value.
Compared to 1 year ago, KLG has more shares outstanding
The debt/assets ratio for KLG is higher compared to a year ago.

2.2 Solvency

KLG has an Altman-Z score of 2.17. This is not the best score and indicates that KLG is in the grey zone with still only limited risk for bankruptcy at the moment.
KLG has a Altman-Z score (2.17) which is comparable to the rest of the industry.
A Debt/Equity ratio of 2.05 is on the high side and indicates that KLG has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 2.05, KLG is doing worse than 86.52% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	2.05
Debt/FCF	N/A
Altman-Z	2.17

ROIC/WACC1.2

WACC8.08%

2.3 Liquidity

KLG has a Current Ratio of 0.99. This is a bad value and indicates that KLG is not financially healthy enough and could expect problems in meeting its short term obligations.
KLG has a Current ratio of 0.99. This is in the lower half of the industry: KLG underperforms 78.65% of its industry peers.
A Quick Ratio of 0.47 indicates that KLG may have some problems paying its short term obligations.
KLG has a Quick ratio of 0.47. This is in the lower half of the industry: KLG underperforms 76.40% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	0.99
Quick Ratio	0.47

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The earnings per share for KLG have decreased by -0.07% in the last year.
The earnings per share for KLG have been decreasing by -23.66% on average. This is quite bad
KLG shows a decrease in Revenue. In the last year, the revenue decreased by -4.30%.
The Revenue has been growing slightly by 3.25% on average over the past years.

EPS 1Y (TTM)-0.07%

EPS 3Y-23.66%

EPS 5YN/A

EPS Q2Q%-40.91%

Revenue 1Y (TTM)-4.3%

Revenue growth 3Y3.25%

Revenue growth 5YN/A

Sales Q2Q%-8.78%

3.2 Future

KLG is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.93% yearly.
KLG is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.80% yearly.

EPS Next Y-5.74%

EPS Next 2Y-1.29%

EPS Next 3Y4.27%

EPS Next 5Y12.93%

Revenue Next Year-4.2%

Revenue Next 2Y-3.55%

Revenue Next 3Y-2.39%

Revenue Next 5Y-0.8%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

KLG is valuated correctly with a Price/Earnings ratio of 15.54.
69.66% of the companies in the same industry are more expensive than KLG, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of KLG to the average of the S&P500 Index (27.21), we can say KLG is valued slightly cheaper.
The Price/Forward Earnings ratio is 15.33, which indicates a correct valuation of KLG.
Based on the Price/Forward Earnings ratio, KLG is valued a bit cheaper than 70.79% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.98, KLG is valued a bit cheaper.

		Industry Rank	Sector Rank
PE	15.54
Fwd PE	15.33

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of KLG is on the same level as its industry peers.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	10.26

4.3 Compensation for Growth

The decent profitability rating of KLG may justify a higher PE ratio.

PEG (NY)N/A

PEG (5Y)N/A

EPS Next 2Y-1.29%

EPS Next 3Y4.27%

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5. Dividend

5.1 Amount

KLG has a Yearly Dividend Yield of 2.87%.
KLG's Dividend Yield is a higher than the industry average which is at 2.29.
KLG's Dividend Yield is rather good when compared to the S&P500 average which is at 1.81.

		Industry Rank	Sector Rank
Dividend Yield	2.87%

5.2 History

KLG has been paying a dividend for less than 5 years, so it still needs to build a track record.

Dividend Growth(5Y)N/A

Div Incr Years1

Div Non Decr Years1

5.3 Sustainability

KLG pays out 164.71% of its income as dividend. This is not a sustainable payout ratio.

DP164.71%

EPS Next 2Y-1.29%

EPS Next 3Y4.27%

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WK KELLOGG CO / KLG FAQ

Can you provide the ChartMill fundamental rating for WK KELLOGG CO?

ChartMill assigns a fundamental rating of 3 / 10 to KLG.

What is the valuation status of WK KELLOGG CO (KLG) stock?

ChartMill assigns a valuation rating of 4 / 10 to WK KELLOGG CO (KLG). This can be considered as Fairly Valued.

Can you provide the profitability details for WK KELLOGG CO?

WK KELLOGG CO (KLG) has a profitability rating of 6 / 10.

Can you provide the financial health for KLG stock?

The financial health rating of WK KELLOGG CO (KLG) is 1 / 10.

What is the expected EPS growth for WK KELLOGG CO (KLG) stock?

The Earnings per Share (EPS) of WK KELLOGG CO (KLG) is expected to decline by -5.74% in the next year.