LAMB WESTON HOLDINGS INC (LW)
US5132721045 - Common Stock
We assign a fundamental rating of 5 out of 10 to LW. LW was compared to 91 industry peers in the Food Products industry. LW has an excellent profitability rating, but there are concerns on its financial health. LW has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
LW had positive earnings in the past year.
LW had a positive operating cash flow in the past year.
LW had positive earnings in each of the past 5 years.
LW had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
LW has a better Return On Assets (8.23%) than 84.44% of its industry peers.
The Return On Equity of LW (33.66%) is better than 97.78% of its industry peers.
Looking at the Return On Invested Capital, with a value of 10.94%, LW belongs to the top of the industry, outperforming 84.44% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for LW is above the industry average of 8.95%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.23% | ||
| ROE | 33.66% | ||
| ROIC | 10.94% |
ROA(3y)10.06%
ROA(5y)9.11%
ROE(3y)55.93%
ROE(5y)77.28%
ROIC(3y)11.5%
ROIC(5y)10.81%
1.3 Margins
LW has a better Profit Margin (9.57%) than 83.33% of its industry peers.
LW's Profit Margin has declined in the last couple of years.
The Operating Margin of LW (14.63%) is better than 83.33% of its industry peers.
LW's Operating Margin has been stable in the last couple of years.
The Gross Margin of LW (25.14%) is better than 61.11% of its industry peers.
LW's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.63% | ||
| PM (TTM) | 9.57% | ||
| GM | 25.14% |
OM growth 3Y8.95%
OM growth 5Y-1.27%
PM growth 3Y9.02%
PM growth 5Y-2.07%
GM growth 3Y6.42%
GM growth 5Y0.45%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so LW is still creating some value.
The number of shares outstanding for LW has been reduced compared to 1 year ago.
Compared to 5 years ago, LW has less shares outstanding
Compared to 1 year ago, LW has an improved debt to assets ratio.
2.2 Solvency
LW has an Altman-Z score of 2.98. This is not the best score and indicates that LW is in the grey zone with still only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.98, LW is in the better half of the industry, outperforming 67.78% of the companies in the same industry.
A Debt/Equity ratio of 2.16 is on the high side and indicates that LW has dependencies on debt financing.
With a Debt to Equity ratio value of 2.16, LW is not doing good in the industry: 88.89% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.16 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.98 |
ROIC/WACC1.42
WACC7.7%
2.3 Liquidity
LW has a Current Ratio of 1.19. This is a normal value and indicates that LW is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.19, LW is not doing good in the industry: 67.78% of the companies in the same industry are doing better.
LW has a Quick Ratio of 1.19. This is a bad value and indicates that LW is not financially healthy enough and could expect problems in meeting its short term obligations.
LW's Quick ratio of 0.54 is on the low side compared to the rest of the industry. LW is outperformed by 71.11% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.19 | ||
| Quick Ratio | 0.54 |
3. Growth
3.1 Past
The earnings per share for LW have decreased strongly by -25.18% in the last year.
Measured over the past years, LW shows a quite strong growth in Earnings Per Share. The EPS has been growing by 9.46% on average per year.
LW shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.61%.
LW shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.48% yearly.
EPS 1Y (TTM)-25.18%
EPS 3Y32.81%
EPS 5Y9.46%
EPS Q2Q%-55.21%
Revenue 1Y (TTM)9.61%
Revenue growth 3Y20.78%
Revenue growth 5Y11.48%
Sales Q2Q%-0.67%
3.2 Future
The Earnings Per Share is expected to grow by 8.77% on average over the next years. This is quite good.
The Revenue is expected to grow by 4.84% on average over the next years.
EPS Next Y-13.61%
EPS Next 2Y0.65%
EPS Next 3Y3.27%
EPS Next 5Y8.77%
Revenue Next Year1.5%
Revenue Next 2Y2.91%
Revenue Next 3Y3.14%
Revenue Next 5Y4.84%
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 stable.
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
LW is valuated rather expensively with a Price/Earnings ratio of 18.14.
66.67% of the companies in the same industry are more expensive than LW, based on the Price/Earnings ratio.
LW's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.53.
With a Price/Forward Earnings ratio of 14.72, LW is valued correctly.
76.67% of the companies in the same industry are more expensive than LW, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of LW to the average of the S&P500 Index (23.40), we can say LW is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.14 | ||
| Fwd PE | 14.72 |
4.2 Price Multiples
LW's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. LW is cheaper than 62.22% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 11.12 |
4.3 Compensation for Growth
LW has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.92
EPS Next 2Y0.65%
EPS Next 3Y3.27%
5. Dividend
5.1 Amount
LW has a Yearly Dividend Yield of 1.79%. Purely for dividend investing, there may be better candidates out there.
LW's Dividend Yield is a higher than the industry average which is at 3.79.
Compared to an average S&P500 Dividend Yield of 2.22, LW has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.79% |
5.2 History
The dividend of LW is nicely growing with an annual growth rate of 9.19%!
LW has been paying a dividend for over 5 years, so it has already some track record.
LW has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)9.19%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
29.91% of the earnings are spent on dividend by LW. This is a low number and sustainable payout ratio.
LW's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP29.91%
EPS Next 2Y0.65%
EPS Next 3Y3.27%
LAMB WESTON HOLDINGS INC
NYSE:LW (11/15/2024, 8:24:13 PM)
After market: 75.65 +0.18 (+0.24%)75.47
-4.94 (-6.14%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap10.76B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.79% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.14 | ||
| Fwd PE | 14.72 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)1.92
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.23% | ||
| ROE | 33.66% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 14.63% | ||
| PM (TTM) | 9.57% | ||
| GM | 25.14% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.86
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.16 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.19 | ||
| Quick Ratio | 0.54 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)-25.18%
EPS 3Y32.81%
EPS 5Y
EPS Q2Q%
EPS Next Y-13.61%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)9.61%
Revenue growth 3Y20.78%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y