CONSTELLATION BRANDS INC-A (STZ) Stock Fundamental Analysis
NYSE:STZ - New York Stock Exchange, Inc. - US21036P1084 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to STZ. STZ was compared to 32 industry peers in the Beverages industry. STZ has only an average score on both its financial health and profitability. STZ is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year STZ was profitable.
In the past year STZ had a positive cash flow from operations.
In multiple years STZ reported negative net income over the last 5 years.
STZ had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
STZ has a Return On Assets of 3.01%. This is in the lower half of the industry: STZ underperforms 65.52% of its industry peers.
STZ's Return On Equity of 8.78% is in line compared to the rest of the industry. STZ outperforms 48.28% of its industry peers.
STZ has a better Return On Invested Capital (13.42%) than 75.86% of its industry peers.
STZ had an Average Return On Invested Capital over the past 3 years of 10.51%. This is below the industry average of 13.22%.
The 3 year average ROIC (10.51%) for STZ is below the current ROIC(13.42%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.01% | ||
| ROE | 8.78% | ||
| ROIC | 13.42% |
ROA(3y)2.09%
ROA(5y)2.72%
ROE(3y)5.51%
ROE(5y)6.23%
ROIC(3y)10.51%
ROIC(5y)9.67%
1.3 Margins
With a Profit Margin value of 6.74%, STZ perfoms like the industry average, outperforming 41.38% of the companies in the same industry.
In the last couple of years the Profit Margin of STZ has declined.
The Operating Margin of STZ (34.03%) is better than 96.55% of its industry peers.
STZ's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 51.49%, STZ is in the better half of the industry, outperforming 62.07% of the companies in the same industry.
In the last couple of years the Gross Margin of STZ has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 34.03% | ||
| PM (TTM) | 6.74% | ||
| GM | 51.49% |
OM growth 3Y-0.41%
OM growth 5Y0.34%
PM growth 3Y-9.24%
PM growth 5Y-16.35%
GM growth 3Y-1.01%
GM growth 5Y0.04%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so STZ is creating value.
Compared to 1 year ago, STZ has about the same amount of shares outstanding.
STZ has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, STZ has an improved debt to assets ratio.
2.2 Solvency
STZ has an Altman-Z score of 3.04. This indicates that STZ is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.04, STZ is in line with its industry, outperforming 55.17% of the companies in the same industry.
STZ has a debt to FCF ratio of 6.80. This is a slightly negative value and a sign of low solvency as STZ would need 6.80 years to pay back of all of its debts.
STZ's Debt to FCF ratio of 6.80 is in line compared to the rest of the industry. STZ outperforms 58.62% of its industry peers.
STZ has a Debt/Equity ratio of 1.42. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of STZ (1.42) is worse than 72.41% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.42 | ||
| Debt/FCF | 6.8 | ||
| Altman-Z | 3.04 |
ROIC/WACC1.86
WACC7.21%
2.3 Liquidity
STZ has a Current Ratio of 1.10. This is a normal value and indicates that STZ is financially healthy and should not expect problems in meeting its short term obligations.
STZ has a worse Current ratio (1.10) than 62.07% of its industry peers.
STZ has a Quick Ratio of 1.10. This is a bad value and indicates that STZ is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.46, STZ is not doing good in the industry: 79.31% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.1 | ||
| Quick Ratio | 0.46 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 13.75% over the past year.
Measured over the past 5 years, STZ shows a small growth in Earnings Per Share. The EPS has been growing by 5.38% on average per year.
Looking at the last year, STZ shows a small growth in Revenue. The Revenue has grown by 3.70% in the last year.
STZ shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.18% yearly.
EPS 1Y (TTM)13.75%
EPS 3Y6.55%
EPS 5Y5.38%
EPS Q2Q%1.88%
Revenue 1Y (TTM)3.7%
Revenue growth 3Y4.96%
Revenue growth 5Y4.18%
Sales Q2Q%-0.29%
3.2 Future
The Earnings Per Share is expected to grow by 11.52% on average over the next years. This is quite good.
Based on estimates for the next years, STZ will show a small growth in Revenue. The Revenue will grow by 5.85% on average per year.
EPS Next Y13.01%
EPS Next 2Y10.31%
EPS Next 3Y9.74%
EPS Next 5Y11.52%
Revenue Next Year2.77%
Revenue Next 2Y3.44%
Revenue Next 3Y4.05%
Revenue Next 5Y5.85%
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 accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
STZ is valuated correctly with a Price/Earnings ratio of 13.08.
Based on the Price/Earnings ratio, STZ is valued cheaper than 86.21% of the companies in the same industry.
STZ is valuated cheaply when we compare the Price/Earnings ratio to 29.75, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 11.94, which indicates a very decent valuation of STZ.
Based on the Price/Forward Earnings ratio, STZ is valued cheaply inside the industry as 86.21% of the companies are valued more expensively.
STZ is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.08 | ||
| Fwd PE | 11.94 |
4.2 Price Multiples
STZ's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. STZ is cheaper than 68.97% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of STZ indicates a somewhat cheap valuation: STZ is cheaper than 79.31% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.61 | ||
| EV/EBITDA | 10.81 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEG (NY)1.01
PEG (5Y)2.43
EPS Next 2Y10.31%
EPS Next 3Y9.74%
5. Dividend
5.1 Amount
STZ has a Yearly Dividend Yield of 2.33%.
The stock price of STZ dropped by -26.66% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
STZ's Dividend Yield is comparable with the industry average which is at 3.17.
STZ's Dividend Yield is comparable with the S&P500 average which is at 2.30.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.33% |
5.2 History
The dividend of STZ has a limited annual growth rate of 4.06%.
STZ has been paying a dividend for at least 10 years, so it has a reliable track record.
STZ has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)4.06%
Div Incr Years9
Div Non Decr Years9
5.3 Sustainability
STZ pays out 104.04% of its income as dividend. This is not a sustainable payout ratio.
The dividend of STZ is growing, but earnings are growing more, so the dividend growth is sustainable.
DP104.04%
EPS Next 2Y10.31%
EPS Next 3Y9.74%
175.28
-0.22 (-0.13%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners79.59%
Inst Owner Change1.38%
Ins Owners0.09%
Ins Owner Change-0.35%
Market Cap31.68B
Analysts76
Price Target247.24 (41.05%)
Short Float %1.56%
Short Ratio1.09
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.33% |
Yearly Dividend3.57
Dividend Growth(5Y)4.06%
DP104.04%
Div Incr Years9
Div Non Decr Years9
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.94%
Min EPS beat(2)-2.92%
Max EPS beat(2)4.79%
EPS beat(4)3
Avg EPS beat(4)2.85%
Min EPS beat(4)-2.92%
Max EPS beat(4)7.4%
EPS beat(8)7
Avg EPS beat(8)4.42%
EPS beat(12)10
Avg EPS beat(12)5.02%
EPS beat(16)12
Avg EPS beat(16)4.49%
Revenue beat(2)0
Avg Revenue beat(2)-2%
Min Revenue beat(2)-3.72%
Max Revenue beat(2)-0.28%
Revenue beat(4)1
Avg Revenue beat(4)-1.05%
Min Revenue beat(4)-3.72%
Max Revenue beat(4)1.1%
Revenue beat(8)2
Avg Revenue beat(8)-1.21%
Revenue beat(12)6
Avg Revenue beat(12)0.61%
Revenue beat(16)9
Avg Revenue beat(16)0.79%
PT rev (1m)-0.8%
PT rev (3m)-16.84%
EPS NQ rev (1m)-0.36%
EPS NQ rev (3m)-6.75%
EPS NY rev (1m)0.01%
EPS NY rev (3m)-1.57%
Revenue NQ rev (1m)-0.14%
Revenue NQ rev (3m)-4.06%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)-1.68%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.08 | ||
| Fwd PE | 11.94 | ||
| P/S | 3.11 | ||
| P/FCF | 18.61 | ||
| P/OCF | 10.59 | ||
| P/B | 4.05 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.81 |
EPS(TTM)13.4
EY7.64%
EPS(NY)14.67
Fwd EY8.37%
FCF(TTM)9.42
FCFY5.37%
OCF(TTM)16.55
OCFY9.44%
SpS56.35
BVpS43.26
TBVpS-2.84
PEG (NY)1.01
PEG (5Y)2.43
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.01% | ||
| ROE | 8.78% | ||
| ROCE | 17.76% | ||
| ROIC | 13.42% | ||
| ROICexc | 13.46% | ||
| ROICexgc | 22.81% | ||
| OM | 34.03% | ||
| PM (TTM) | 6.74% | ||
| GM | 51.49% | ||
| FCFM | 16.71% |
ROA(3y)2.09%
ROA(5y)2.72%
ROE(3y)5.51%
ROE(5y)6.23%
ROIC(3y)10.51%
ROIC(5y)9.67%
ROICexc(3y)10.59%
ROICexc(5y)9.75%
ROICexgc(3y)19.84%
ROICexgc(5y)17.72%
ROCE(3y)13.65%
ROCE(5y)12.46%
ROICexcg growth 3Y12.46%
ROICexcg growth 5Y10.13%
ROICexc growth 3Y8.59%
ROICexc growth 5Y8.1%
OM growth 3Y-0.41%
OM growth 5Y0.34%
PM growth 3Y-9.24%
PM growth 5Y-16.35%
GM growth 3Y-1.01%
GM growth 5Y0.04%
F-Score7
Asset Turnover0.45
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.42 | ||
| Debt/FCF | 6.8 | ||
| Debt/EBITDA | 2.83 | ||
| Cap/Depr | 288.17% | ||
| Cap/Sales | 12.65% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 76.44% | ||
| Profit Quality | 248% | ||
| Current Ratio | 1.1 | ||
| Quick Ratio | 0.46 | ||
| Altman-Z | 3.04 |
F-Score7
WACC7.21%
ROIC/WACC1.86
Cap/Depr(3y)284.81%
Cap/Depr(5y)272.44%
Cap/Sales(3y)11.78%
Cap/Sales(5y)10.82%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)13.75%
EPS 3Y6.55%
EPS 5Y5.38%
EPS Q2Q%1.88%
EPS Next Y13.01%
EPS Next 2Y10.31%
EPS Next 3Y9.74%
EPS Next 5Y11.52%
Revenue 1Y (TTM)3.7%
Revenue growth 3Y4.96%
Revenue growth 5Y4.18%
Sales Q2Q%-0.29%
Revenue Next Year2.77%
Revenue Next 2Y3.44%
Revenue Next 3Y4.05%
Revenue Next 5Y5.85%
EBIT growth 1Y10.02%
EBIT growth 3Y4.54%
EBIT growth 5Y4.54%
EBIT Next Year22.28%
EBIT Next 3Y10.92%
EBIT Next 5Y10.41%
FCF growth 1Y19.02%
FCF growth 3Y-8.03%
FCF growth 5Y2.13%
OCF growth 1Y17.66%
OCF growth 3Y-0.32%
OCF growth 5Y4.36%