WENDY'S CO/THE (WEN) Stock Fundamental Analysis
NASDAQ:WEN - Nasdaq - US95058W1009 - Common Stock - Currency: USD
WEN gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 133 industry peers in the Hotels, Restaurants & Leisure industry. WEN has an excellent profitability rating, but there are concerns on its financial health. WEN has a valuation in line with the averages, but on the other hand it scores bad on growth.
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.
Each year in the past 5 years WEN had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 3.89%, WEN is in the better half of the industry, outperforming 61.65% of the companies in the same industry.
WEN has a Return On Equity of 147.11%. This is amongst the best in the industry. WEN outperforms 100.00% of its industry peers.
WEN has a Return On Invested Capital (6.04%) which is in line with its industry peers.
WEN had an Average Return On Invested Capital over the past 3 years of 5.43%. This is significantly below the industry average of 13.81%.
The 3 year average ROIC (5.43%) for WEN is below the current ROIC(6.04%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.89% | ||
| ROE | 147.11% | ||
| ROIC | 6.04% |
ROA(3y)3.68%
ROA(5y)3.46%
ROE(3y)59.67%
ROE(5y)49.27%
ROIC(3y)5.43%
ROIC(5y)5.17%
1.3 Margins
Looking at the Profit Margin, with a value of 8.57%, WEN is in the better half of the industry, outperforming 68.42% of the companies in the same industry.
WEN's Profit Margin has improved in the last couple of years.
WEN's Operating Margin of 16.79% is fine compared to the rest of the industry. WEN outperforms 72.93% of its industry peers.
WEN's Operating Margin has been stable in the last couple of years.
The Gross Margin of WEN (63.24%) is better than 76.69% 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 | 16.79% | ||
| PM (TTM) | 8.57% | ||
| GM | 63.24% |
OM growth 3Y-1.47%
OM growth 5Y0.74%
PM growth 3Y-6.44%
PM growth 5Y1.55%
GM growth 3Y-1.04%
GM growth 5Y0.27%
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.
The number of shares outstanding for WEN has been reduced compared to 5 years ago.
WEN has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.15, we must say that WEN is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of WEN (1.15) is worse than 62.41% of its industry peers.
WEN has a debt to FCF ratio of 13.58. This is a negative value and a sign of low solvency as WEN would need 13.58 years to pay back of all of its debts.
WEN has a Debt to FCF ratio (13.58) which is comparable to the rest of the industry.
A Debt/Equity ratio of 24.88 is on the high side and indicates that WEN has dependencies on debt financing.
WEN has a worse Debt to Equity ratio (24.88) than 69.17% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 24.88 | ||
| Debt/FCF | 13.58 | ||
| Altman-Z | 1.15 |
ROIC/WACC0.96
WACC6.29%
2.3 Liquidity
WEN has a Current Ratio of 1.49. This is a normal value and indicates that WEN is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of WEN (1.49) is better than 74.44% of its industry peers.
WEN has a Quick Ratio of 1.47. This is a normal value and indicates that WEN is financially healthy and should not expect problems in meeting its short term obligations.
WEN has a Quick ratio of 1.47. This is in the better half of the industry: WEN outperforms 76.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.49 | ||
| Quick Ratio | 1.47 |
3. Growth
3.1 Past
The earnings per share for WEN have decreased by -2.02% in the last year.
WEN shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.13% yearly.
Looking at the last year, WEN shows a small growth in Revenue. The Revenue has grown by 2.18% in the last year.
Measured over the past years, WEN shows a small growth in Revenue. The Revenue has been growing by 5.62% on average per year.
EPS 1Y (TTM)-2.02%
EPS 3Y6.84%
EPS 5Y11.13%
EPS Q2Q%-13.04%
Revenue 1Y (TTM)2.18%
Revenue growth 3Y5.8%
Revenue growth 5Y5.62%
Sales Q2Q%-2.11%
3.2 Future
WEN is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.70% yearly.
WEN is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.11% yearly.
EPS Next Y-3.51%
EPS Next 2Y3.15%
EPS Next 3Y4.6%
EPS Next 5Y7.7%
Revenue Next Year-1.2%
Revenue Next 2Y1.3%
Revenue Next 3Y1.86%
Revenue Next 5Y3.11%
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 decreasing.
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 12.04, WEN is valued correctly.
Based on the Price/Earnings ratio, WEN is valued cheaply inside the industry as 91.73% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of WEN to the average of the S&P500 Index (27.45), we can say WEN is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 10.98, the valuation of WEN can be described as reasonable.
WEN's Price/Forward Earnings ratio is rather cheap when compared to the industry. WEN is cheaper than 86.47% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of WEN to the average of the S&P500 Index (21.90), we can say WEN is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.04 | ||
| Fwd PE | 10.98 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WEN indicates a somewhat cheap valuation: WEN is cheaper than 71.43% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, WEN is valued cheaper than 93.98% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.12 | ||
| EV/EBITDA | 9.81 |
4.3 Compensation for Growth
The decent profitability rating of WEN may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.08
EPS Next 2Y3.15%
EPS Next 3Y4.6%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 7.57%, WEN is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.71, WEN pays a better dividend. On top of this WEN pays more dividend than 96.24% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, WEN pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.57% |
5.2 History
On average, the dividend of WEN grows each year by 32.37%, 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)32.37%
Div Incr Years0
Div Non Decr Years4
5.3 Sustainability
WEN pays out 105.69% of its income as dividend. This is not a sustainable payout ratio.
The dividend of WEN is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP105.69%
EPS Next 2Y3.15%
EPS Next 3Y4.6%
11.68
+0.02 (+0.17%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners92.16%
Inst Owner Change3.48%
Ins Owners8.94%
Ins Owner Change0.72%
Market Cap2.24B
Analysts65.45
Price Target14.5 (24.14%)
Short Float %10.3%
Short Ratio3.12
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.57% |
Yearly Dividend1
Dividend Growth(5Y)32.37%
DP105.69%
Div Incr Years0
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.04%
Min EPS beat(2)-0.22%
Max EPS beat(2)2.3%
EPS beat(4)1
Avg EPS beat(4)-0.74%
Min EPS beat(4)-3.06%
Max EPS beat(4)2.3%
EPS beat(8)4
Avg EPS beat(8)0.19%
EPS beat(12)8
Avg EPS beat(12)1.77%
EPS beat(16)11
Avg EPS beat(16)4.43%
Revenue beat(2)1
Avg Revenue beat(2)-0.24%
Min Revenue beat(2)-1.35%
Max Revenue beat(2)0.88%
Revenue beat(4)2
Avg Revenue beat(4)-0.62%
Min Revenue beat(4)-2.13%
Max Revenue beat(4)0.88%
Revenue beat(8)2
Avg Revenue beat(8)-1.31%
Revenue beat(12)3
Avg Revenue beat(12)-1.2%
Revenue beat(16)5
Avg Revenue beat(16)-0.66%
PT rev (1m)-4.45%
PT rev (3m)-16.84%
EPS NQ rev (1m)-0.15%
EPS NQ rev (3m)-7.99%
EPS NY rev (1m)0.05%
EPS NY rev (3m)-4.97%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.03%
Revenue NY rev (1m)0.27%
Revenue NY rev (3m)-2.41%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.04 | ||
| Fwd PE | 10.98 | ||
| P/S | 1 | ||
| P/FCF | 9.12 | ||
| P/OCF | 6.58 | ||
| P/B | 17.22 | ||
| P/tB | N/A | ||
| EV/EBITDA | 9.81 |
EPS(TTM)0.97
EY8.3%
EPS(NY)1.06
Fwd EY9.11%
FCF(TTM)1.28
FCFY10.97%
OCF(TTM)1.77
OCFY15.19%
SpS11.64
BVpS0.68
TBVpS-9.51
PEG (NY)N/A
PEG (5Y)1.08
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.89% | ||
| ROE | 147.11% | ||
| ROCE | 8.37% | ||
| ROIC | 6.04% | ||
| ROICexc | 6.53% | ||
| ROICexgc | 12.35% | ||
| OM | 16.79% | ||
| PM (TTM) | 8.57% | ||
| GM | 63.24% | ||
| FCFM | 11.01% |
ROA(3y)3.68%
ROA(5y)3.46%
ROE(3y)59.67%
ROE(5y)49.27%
ROIC(3y)5.43%
ROIC(5y)5.17%
ROICexc(3y)6.13%
ROICexc(5y)5.72%
ROICexgc(3y)11.48%
ROICexgc(5y)10.67%
ROCE(3y)7.51%
ROCE(5y)7.16%
ROICexcg growth 3Y6.48%
ROICexcg growth 5Y7.52%
ROICexc growth 3Y6.19%
ROICexc growth 5Y7.2%
OM growth 3Y-1.47%
OM growth 5Y0.74%
PM growth 3Y-6.44%
PM growth 5Y1.55%
GM growth 3Y-1.04%
GM growth 5Y0.27%
F-Score6
Asset Turnover0.45
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 24.88 | ||
| Debt/FCF | 13.58 | ||
| Debt/EBITDA | 6.06 | ||
| Cap/Depr | 59.35% | ||
| Cap/Sales | 4.24% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 63.71% | ||
| Profit Quality | 128.41% | ||
| Current Ratio | 1.49 | ||
| Quick Ratio | 1.47 | ||
| Altman-Z | 1.15 |
F-Score6
WACC6.29%
ROIC/WACC0.96
Cap/Depr(3y)59.99%
Cap/Depr(5y)58.81%
Cap/Sales(3y)4.06%
Cap/Sales(5y)4.05%
Profit Quality(3y)119.97%
Profit Quality(5y)135.28%
High Growth Momentum
Growth
EPS 1Y (TTM)-2.02%
EPS 3Y6.84%
EPS 5Y11.13%
EPS Q2Q%-13.04%
EPS Next Y-3.51%
EPS Next 2Y3.15%
EPS Next 3Y4.6%
EPS Next 5Y7.7%
Revenue 1Y (TTM)2.18%
Revenue growth 3Y5.8%
Revenue growth 5Y5.62%
Sales Q2Q%-2.11%
Revenue Next Year-1.2%
Revenue Next 2Y1.3%
Revenue Next 3Y1.86%
Revenue Next 5Y3.11%
EBIT growth 1Y-2.02%
EBIT growth 3Y4.25%
EBIT growth 5Y6.41%
EBIT Next Year43.02%
EBIT Next 3Y15.67%
EBIT Next 5Y12.09%
FCF growth 1Y19.08%
FCF growth 3Y-0.86%
FCF growth 5Y4.01%
OCF growth 1Y16.73%
OCF growth 3Y0.91%
OCF growth 5Y4.22%