WALKER & DUNLOP INC (WD) Stock Fundamental Analysis
NYSE:WD - New York Stock Exchange, Inc. - US93148P1021 - Common Stock - Currency: USD
Overall WD gets a fundamental rating of 4 out of 10. We evaluated WD against 101 industry peers in the Financial Services industry. WD scores quite bad on profitability, while its financial health is fine. Not spectacular, but in line with the averages. WD has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year WD was profitable.
WD had a positive operating cash flow in the past year.
WD had positive earnings in each of the past 5 years.
In multiple years WD reported negative operating cash flow during the last 5 years.
1.2 Ratios
WD has a Return On Assets (2.68%) which is in line with its industry peers.
WD has a Return On Equity of 6.71%. This is in the lower half of the industry: WD underperforms 61.39% of its industry peers.
WD has a Return On Invested Capital (3.81%) which is comparable to the rest of the industry.
WD had an Average Return On Invested Capital over the past 3 years of 4.31%. This is below the industry average of 7.70%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.68% | ||
| ROE | 6.71% | ||
| ROIC | 3.81% |
ROA(3y)3.38%
ROA(5y)4.04%
ROE(3y)8.14%
ROE(5y)12.19%
ROIC(3y)4.31%
ROIC(5y)4.87%
1.3 Margins
The Profit Margin of WD (8.62%) is comparable to the rest of the industry.
WD's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 15.82%, WD is in line with its industry, outperforming 50.49% of the companies in the same industry.
In the last couple of years the Operating Margin of WD has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.82% | ||
| PM (TTM) | 8.62% | ||
| GM | N/A |
OM growth 3Y-17.2%
OM growth 5Y-11.53%
PM growth 3Y-22.94%
PM growth 5Y-14.57%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), WD is destroying value.
The number of shares outstanding for WD has been increased compared to 1 year ago.
Compared to 5 years ago, WD has more shares outstanding
The debt/assets ratio for WD is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.60, we must say that WD is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.60, WD is in the better half of the industry, outperforming 70.30% of the companies in the same industry.
The Debt to FCF ratio of WD is 13.31, which is on the high side as it means it would take WD, 13.31 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 13.31, WD is in line with its industry, outperforming 51.49% of the companies in the same industry.
WD has a Debt/Equity ratio of 0.89. This is a neutral value indicating WD is somewhat dependend on debt financing.
WD has a Debt to Equity ratio (0.89) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.89 | ||
| Debt/FCF | 13.31 | ||
| Altman-Z | 1.6 |
ROIC/WACC0.45
WACC8.47%
2.3 Liquidity
A Current Ratio of 5.72 indicates that WD has no problem at all paying its short term obligations.
WD has a Current ratio of 5.72. This is amongst the best in the industry. WD outperforms 95.05% of its industry peers.
WD has a Quick Ratio of 5.72. This indicates that WD is financially healthy and has no problem in meeting its short term obligations.
Looking at the Quick ratio, with a value of 5.72, WD belongs to the top of the industry, outperforming 95.05% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 5.72 | ||
| Quick Ratio | 5.72 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 0.31% over the past year.
The earnings per share for WD have been decreasing by -10.16% on average. This is quite bad
WD shows a strong growth in Revenue. In the last year, the Revenue has grown by 29.04%.
The Revenue has been growing slightly by 6.74% on average over the past years.
EPS 1Y (TTM)0.31%
EPS 3Y-26.85%
EPS 5Y-10.16%
EPS Q2Q%41.94%
Revenue 1Y (TTM)29.04%
Revenue growth 3Y-3.47%
Revenue growth 5Y6.74%
Sales Q2Q%24.46%
3.2 Future
Based on estimates for the next years, WD will show a very strong growth in Earnings Per Share. The EPS will grow by 22.83% on average per year.
The Revenue is expected to grow by 6.72% on average over the next years.
EPS Next Y34.79%
EPS Next 2Y27.03%
EPS Next 3Y22.83%
EPS Next 5YN/A
Revenue Next Year7.42%
Revenue Next 2Y6.22%
Revenue Next 3Y6.72%
Revenue Next 5YN/A
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 stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 23.11, WD is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of WD indicates a slightly more expensive valuation: WD is more expensive than 61.39% of the companies listed in the same industry.
WD's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.29.
With a Price/Forward Earnings ratio of 17.14, WD is valued on the expensive side.
WD's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 21.08. WD is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.11 | ||
| Fwd PE | 17.14 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WD indicates a somewhat cheap valuation: WD is cheaper than 72.28% of the companies listed in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as WD.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.51 | ||
| EV/EBITDA | 8.34 |
4.3 Compensation for Growth
WD's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
WD's earnings are expected to grow with 22.83% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.66
PEG (5Y)N/A
EPS Next 2Y27.03%
EPS Next 3Y22.83%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.64%, WD has a reasonable but not impressive dividend return.
In the last 3 months the price of WD has falen by -22.68%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 4.55, WD pays a better dividend. On top of this WD pays more dividend than 80.20% of the companies listed in the same industry.
WD's Dividend Yield is a higher than the S&P500 average which is at 2.52.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.64% |
5.2 History
On average, the dividend of WD grows each year by 16.43%, which is quite nice.
WD has been paying a dividend for over 5 years, so it has already some track record.
As WD did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)16.43%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
75.56% of the earnings are spent on dividend by WD. This is not a sustainable payout ratio.
The dividend of WD is growing, but earnings are growing more, so the dividend growth is sustainable.
DP75.56%
EPS Next 2Y27.03%
EPS Next 3Y22.83%
73.72
+0.07 (+0.1%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners84.94%
Inst Owner Change0.26%
Ins Owners3.46%
Ins Owner Change8.45%
Market Cap2.50B
Analysts80
Price Target110.5 (49.89%)
Short Float %2.62%
Short Ratio3.9
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.64% |
Yearly Dividend2.68
Dividend Growth(5Y)16.43%
DP75.56%
Div Incr Years6
Div Non Decr Years6
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-6.91%
Min EPS beat(2)-18.5%
Max EPS beat(2)4.68%
EPS beat(4)1
Avg EPS beat(4)-16.58%
Min EPS beat(4)-34.4%
Max EPS beat(4)4.68%
EPS beat(8)2
Avg EPS beat(8)-14.92%
EPS beat(12)3
Avg EPS beat(12)-15.11%
EPS beat(16)5
Avg EPS beat(16)-12.68%
Revenue beat(2)1
Avg Revenue beat(2)1.41%
Min Revenue beat(2)-3.56%
Max Revenue beat(2)6.37%
Revenue beat(4)1
Avg Revenue beat(4)-4.57%
Min Revenue beat(4)-16.81%
Max Revenue beat(4)6.37%
Revenue beat(8)2
Avg Revenue beat(8)-4.58%
Revenue beat(12)3
Avg Revenue beat(12)-5.53%
Revenue beat(16)5
Avg Revenue beat(16)-3.71%
PT rev (1m)0%
PT rev (3m)-12.16%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-22.71%
EPS NY rev (1m)-6.7%
EPS NY rev (3m)-17.67%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-5.69%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-3.75%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.11 | ||
| Fwd PE | 17.14 | ||
| P/S | 1.84 | ||
| P/FCF | 21.51 | ||
| P/OCF | 19.36 | ||
| P/B | 1.43 | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.34 |
EPS(TTM)3.19
EY4.33%
EPS(NY)4.3
Fwd EY5.83%
FCF(TTM)3.43
FCFY4.65%
OCF(TTM)3.81
OCFY5.17%
SpS40.05
BVpS51.45
TBVpS-3.83
PEG (NY)0.66
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.68% | ||
| ROE | 6.71% | ||
| ROCE | 5.03% | ||
| ROIC | 3.81% | ||
| ROICexc | 4.08% | ||
| ROICexgc | 8.85% | ||
| OM | 15.82% | ||
| PM (TTM) | 8.62% | ||
| GM | N/A | ||
| FCFM | 8.56% |
ROA(3y)3.38%
ROA(5y)4.04%
ROE(3y)8.14%
ROE(5y)12.19%
ROIC(3y)4.31%
ROIC(5y)4.87%
ROICexc(3y)4.62%
ROICexc(5y)5.21%
ROICexgc(3y)10.7%
ROICexgc(5y)10.36%
ROCE(3y)5.69%
ROCE(5y)6.46%
ROICexcg growth 3Y-11.67%
ROICexcg growth 5Y-10.48%
ROICexc growth 3Y-14.61%
ROICexc growth 5Y-13.84%
OM growth 3Y-17.2%
OM growth 5Y-11.53%
PM growth 3Y-22.94%
PM growth 5Y-14.57%
GM growth 3YN/A
GM growth 5YN/A
F-Score6
Asset Turnover0.31
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.89 | ||
| Debt/FCF | 13.31 | ||
| Debt/EBITDA | 3.42 | ||
| Cap/Depr | 5.46% | ||
| Cap/Sales | 0.95% | ||
| Interest Coverage | 2.04 | ||
| Cash Conversion | 28.57% | ||
| Profit Quality | 99.23% | ||
| Current Ratio | 5.72 | ||
| Quick Ratio | 5.72 | ||
| Altman-Z | 1.6 |
F-Score6
WACC8.47%
ROIC/WACC0.45
Cap/Depr(3y)7.32%
Cap/Depr(5y)5.62%
Cap/Sales(3y)1.48%
Cap/Sales(5y)1.09%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)0.31%
EPS 3Y-26.85%
EPS 5Y-10.16%
EPS Q2Q%41.94%
EPS Next Y34.79%
EPS Next 2Y27.03%
EPS Next 3Y22.83%
EPS Next 5YN/A
Revenue 1Y (TTM)29.04%
Revenue growth 3Y-3.47%
Revenue growth 5Y6.74%
Sales Q2Q%24.46%
Revenue Next Year7.42%
Revenue Next 2Y6.22%
Revenue Next 3Y6.72%
Revenue Next 5YN/A
EBIT growth 1Y4.38%
EBIT growth 3Y-20.07%
EBIT growth 5Y-5.56%
EBIT Next Year370.91%
EBIT Next 3Y73.56%
EBIT Next 5YN/A
FCF growth 1Y796.2%
FCF growth 3Y-48.68%
FCF growth 5Y-22.74%
OCF growth 1Y25072.8%
OCF growth 3Y-47.03%
OCF growth 5Y-21.27%