WENDY'S CO/THE (WEN)
US95058W1009 - Common Stock
We assign a fundamental rating of 5 out of 10 to WEN. WEN was compared to 135 industry peers in the Hotels, Restaurants & Leisure industry. WEN has an excellent profitability rating, but there are some minor concerns on its financial health. WEN is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
WEN had positive earnings in the past year.
WEN had a positive operating cash flow in the past year.
WEN had positive earnings in each of the past 5 years.
WEN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
WEN has a better Return On Assets (3.82%) than 61.19% of its industry peers.
With an excellent Return On Equity value of 74.58%, WEN belongs to the best of the industry, outperforming 97.01% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 5.61%, WEN is in line with its industry, outperforming 49.25% of the companies in the same industry.
WEN had an Average Return On Invested Capital over the past 3 years of 5.24%. This is significantly below the industry average of 10.46%.
The 3 year average ROIC (5.24%) for WEN is below the current ROIC(5.61%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.82% | ||
| ROE | 74.58% | ||
| ROIC | 5.61% |
ROA(3y)3.7%
ROA(5y)3.24%
ROE(3y)50%
ROE(5y)39.59%
ROIC(3y)5.24%
ROIC(5y)4.91%
1.3 Margins
WEN's Profit Margin of 8.76% is fine compared to the rest of the industry. WEN outperforms 73.13% of its industry peers.
In the last couple of years the Profit Margin of WEN has declined.
With a decent Operating Margin value of 16.31%, WEN is doing good in the industry, outperforming 70.15% of the companies in the same industry.
In the last couple of years the Operating Margin of WEN has grown nicely.
WEN has a better Gross Margin (63.04%) than 76.12% of its industry peers.
In the last couple of years the Gross Margin of WEN has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.31% | ||
| PM (TTM) | 8.76% | ||
| GM | 63.04% |
OM growth 3Y1.91%
OM growth 5Y1.57%
PM growth 3Y11.31%
PM growth 5Y-20.19%
GM growth 3Y-0.3%
GM growth 5Y-0.47%
2. Health
2.1 Basic Checks
WEN has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for WEN has been reduced compared to 1 year ago.
WEN has less shares outstanding than it did 5 years ago.
The debt/assets ratio for WEN is higher compared to a year ago.
2.2 Solvency
WEN has an Altman-Z score of 1.33. This is a bad value and indicates that WEN is not financially healthy and even has some risk of bankruptcy.
WEN has a Altman-Z score of 1.33. This is comparable to the rest of the industry: WEN outperforms 45.52% of its industry peers.
The Debt to FCF ratio of WEN is 11.87, which is on the high side as it means it would take WEN, 11.87 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 11.87, WEN perfoms like the industry average, outperforming 58.96% of the companies in the same industry.
WEN has a Debt/Equity ratio of 12.64. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of WEN (12.64) is worse than 67.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 12.64 | ||
| Debt/FCF | 11.87 | ||
| Altman-Z | 1.33 |
ROIC/WACC0.79
WACC7.07%
2.3 Liquidity
WEN has a Current Ratio of 2.10. This indicates that WEN is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of WEN (2.10) is better than 87.31% of its industry peers.
WEN has a Quick Ratio of 2.08. This indicates that WEN is financially healthy and has no problem in meeting its short term obligations.
WEN has a better Quick ratio (2.08) than 88.81% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.1 | ||
| Quick Ratio | 2.08 |
3. Growth
3.1 Past
The earnings per share for WEN have decreased by -2.04% in the last year.
The Earnings Per Share has been growing by 10.83% on average over the past years. This is quite good.
WEN shows a small growth in Revenue. In the last year, the Revenue has grown by 1.63%.
WEN shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.53% yearly.
EPS 1Y (TTM)-2.04%
EPS 3Y19.39%
EPS 5Y10.83%
EPS Q2Q%-7.41%
Revenue 1Y (TTM)1.63%
Revenue growth 3Y7.96%
Revenue growth 5Y6.53%
Sales Q2Q%2.94%
3.2 Future
Based on estimates for the next years, WEN will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.50% on average per year.
Based on estimates for the next years, WEN will show a small growth in Revenue. The Revenue will grow by 3.95% on average per year.
EPS Next Y3.73%
EPS Next 2Y4.33%
EPS Next 3Y7.63%
EPS Next 5Y11.5%
Revenue Next Year2.13%
Revenue Next 2Y2.1%
Revenue Next 3Y2.74%
Revenue Next 5Y3.95%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same 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.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 18.67, WEN is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of WEN indicates a somewhat cheap valuation: WEN is cheaper than 79.10% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of WEN to the average of the S&P500 Index (28.65), we can say WEN is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 16.97, the valuation of WEN can be described as correct.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WEN indicates a somewhat cheap valuation: WEN is cheaper than 73.88% of the companies listed in the same industry.
WEN is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.56, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.67 | ||
| Fwd PE | 16.97 |
4.2 Price Multiples
WEN's Enterprise Value to EBITDA ratio is in line with the industry average.
87.31% of the companies in the same industry are more expensive than WEN, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.01 | ||
| EV/EBITDA | 12.48 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
WEN has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)5.01
PEG (5Y)1.72
EPS Next 2Y4.33%
EPS Next 3Y7.63%
5. Dividend
5.1 Amount
WEN has a Yearly Dividend Yield of 5.41%, which is a nice return.
WEN's Dividend Yield is rather good when compared to the industry average which is at 2.83. WEN pays more dividend than 94.78% of the companies in the same industry.
WEN's Dividend Yield is rather good when compared to the S&P500 average which is at 2.23.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.41% |
5.2 History
On average, the dividend of WEN grows each year by 20.25%, which is quite nice.
WEN has been paying a dividend for at least 10 years, so it has a reliable track record.
WEN has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)20.25%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
105.67% of the earnings are spent on dividend by WEN. This is not a sustainable payout ratio.
WEN's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP105.67%
EPS Next 2Y4.33%
EPS Next 3Y7.63%
WENDY'S CO/THE
NASDAQ:WEN (11/20/2024, 8:00:02 PM)
After market: 17.7757 -0.14 (-0.81%)17.92
-0.1 (-0.55%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap3.65B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.41% |
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)
Max EPS beat(2)
EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
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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Min Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
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Revenue beat(16)
Avg Revenue beat(16)
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 | 18.67 | ||
| Fwd PE | 16.97 | ||
| 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)5.01
PEG (5Y)1.72
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.82% | ||
| ROE | 74.58% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 16.31% | ||
| PM (TTM) | 8.76% | ||
| GM | 63.04% | ||
| 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 Turnover0.44
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 12.64 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.1 | ||
| Quick Ratio | 2.08 | ||
| 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)-2.04%
EPS 3Y19.39%
EPS 5Y
EPS Q2Q%
EPS Next Y3.73%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)1.63%
Revenue growth 3Y7.96%
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