WPP PLC-SPONSORED ADR (WPP) Stock Fundamental Analysis
NYSE:WPP - New York Stock Exchange, Inc. - US92937A1025 - ADR - Currency: USD
WPP gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 97 industry peers in the Media industry. There are concerns on the financial health of WPP while its profitability can be described as average. WPP is cheap, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year WPP was profitable.
WPP had a positive operating cash flow in the past year.
WPP had positive earnings in 4 of the past 5 years.
In the past 5 years WPP always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of WPP (2.12%) is better than 68.04% of its industry peers.
WPP has a better Return On Equity (15.60%) than 83.51% of its industry peers.
WPP's Return On Invested Capital of 7.82% is amongst the best of the industry. WPP outperforms 80.41% of its industry peers.
The Average Return On Invested Capital over the past 3 years for WPP is in line with the industry average of 7.56%.
The 3 year average ROIC (5.83%) for WPP is below the current ROIC(7.82%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.12% | ||
| ROE | 15.6% | ||
| ROIC | 7.82% |
ROA(3y)1.64%
ROA(5y)-0.2%
ROE(3y)12.47%
ROE(5y)-1.53%
ROIC(3y)5.83%
ROIC(5y)N/A
1.3 Margins
Looking at the Profit Margin, with a value of 3.68%, WPP is in the better half of the industry, outperforming 68.04% of the companies in the same industry.
In the last couple of years the Profit Margin of WPP has declined.
WPP has a Operating Margin of 8.99%. This is comparable to the rest of the industry: WPP outperforms 59.79% of its industry peers.
WPP's Operating Margin has declined in the last couple of years.
The Gross Margin of WPP (16.63%) is worse than 80.41% of its industry peers.
WPP's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.99% | ||
| PM (TTM) | 3.68% | ||
| GM | 16.63% |
OM growth 3Y-2.17%
OM growth 5Y-1.7%
PM growth 3Y-9.63%
PM growth 5Y-10.43%
GM growth 3Y-1.15%
GM growth 5Y-1.79%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so WPP is still creating some value.
WPP has more shares outstanding than it did 1 year ago.
WPP has less shares outstanding than it did 5 years ago.
The debt/assets ratio for WPP has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.95, we must say that WPP is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.95, WPP is in line with its industry, outperforming 47.42% of the companies in the same industry.
WPP has a debt to FCF ratio of 5.42. This is a neutral value as WPP would need 5.42 years to pay back of all of its debts.
WPP has a better Debt to FCF ratio (5.42) than 73.20% of its industry peers.
WPP has a Debt/Equity ratio of 1.59. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of WPP (1.59) is worse than 68.04% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.59 | ||
| Debt/FCF | 5.42 | ||
| Altman-Z | 0.95 |
ROIC/WACC1.25
WACC6.28%
2.3 Liquidity
A Current Ratio of 0.88 indicates that WPP may have some problems paying its short term obligations.
WPP has a Current ratio of 0.88. This is in the lower half of the industry: WPP underperforms 75.26% of its industry peers.
A Quick Ratio of 0.88 indicates that WPP may have some problems paying its short term obligations.
WPP's Quick ratio of 0.88 is on the low side compared to the rest of the industry. WPP is outperformed by 74.23% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.88 | ||
| Quick Ratio | 0.88 |
3. Growth
3.1 Past
WPP shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -5.86%.
The Earnings Per Share has been decreasing by -0.97% on average over the past years.
WPP shows a decrease in Revenue. In the last year, the revenue decreased by -0.70%.
Measured over the past years, WPP shows a small growth in Revenue. The Revenue has been growing by 2.18% on average per year.
EPS 1Y (TTM)-5.86%
EPS 3Y4%
EPS 5Y-0.97%
EPS Q2Q%-5.44%
Revenue 1Y (TTM)-0.7%
Revenue growth 3Y4.82%
Revenue growth 5Y2.18%
Sales Q2Q%-1.44%
3.2 Future
The Earnings Per Share is expected to decrease by -0.39% on average over the next years.
Based on estimates for the next years, WPP will show a small growth in Revenue. The Revenue will grow by 2.31% on average per year.
EPS Next Y-0.54%
EPS Next 2Y0.6%
EPS Next 3Y1.57%
EPS Next 5Y-0.39%
Revenue Next Year-5.23%
Revenue Next 2Y-1.94%
Revenue Next 3Y-0.27%
Revenue Next 5Y2.31%
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 stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 4.57, which indicates a rather cheap valuation of WPP.
Based on the Price/Earnings ratio, WPP is valued cheaply inside the industry as 92.78% of the companies are valued more expensively.
WPP is valuated cheaply when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 4.60, the valuation of WPP can be described as very cheap.
WPP's Price/Forward Earnings ratio is rather cheap when compared to the industry. WPP is cheaper than 91.75% of the companies in the same industry.
WPP is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.57 | ||
| Fwd PE | 4.6 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WPP is valued cheaply inside the industry as 90.72% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, WPP is valued cheaply inside the industry as 91.75% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3.8 | ||
| EV/EBITDA | 4.6 |
4.3 Compensation for Growth
The decent profitability rating of WPP may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y0.6%
EPS Next 3Y1.57%
5. Dividend
5.1 Amount
WPP has a Yearly Dividend Yield of 7.38%, which is a nice return.
In the last 3 months the price of WPP has falen by -20.69%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
WPP's Dividend Yield is rather good when compared to the industry average which is at 4.62. WPP pays more dividend than 94.85% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.37, WPP pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.38% |
5.2 History
The dividend of WPP decreases each year by -7.91%.
WPP has paid a dividend for at least 10 years, which is a reliable track record.
WPP has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)-7.91%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
78.41% of the earnings are spent on dividend by WPP. This is not a sustainable payout ratio.
The Dividend Rate of WPP has been decling, while earnings will also be declining. This means the current dividend is most likely not sustainable.
DP78.41%
EPS Next 2Y0.6%
EPS Next 3Y1.57%
27.99
-1.32 (-4.5%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryMedia
Earnings (Last)
Earnings (Next)
Inst Owners58.98%
Inst Owner Change0%
Ins Owners0.2%
Ins Owner Change0%
Market Cap6.04B
Analysts50.48
Price Target44.2 (57.91%)
Short Float %0.44%
Short Ratio2.97
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.38% |
Yearly Dividend2.75
Dividend Growth(5Y)-7.91%
DP78.41%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)N/A
Avg Revenue beat(2)N/A
Min Revenue beat(2)N/A
Max Revenue beat(2)N/A
Revenue beat(4)N/A
Avg Revenue beat(4)N/A
Min Revenue beat(4)N/A
Max Revenue beat(4)N/A
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)-10.43%
PT rev (3m)-11.99%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)0%
EPS NY rev (3m)-1.74%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0%
Revenue NY rev (3m)-2.46%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.57 | ||
| Fwd PE | 4.6 | ||
| P/S | 0.3 | ||
| P/FCF | 3.8 | ||
| P/OCF | 3.16 | ||
| P/B | 1.28 | ||
| P/tB | N/A | ||
| EV/EBITDA | 4.6 |
EPS(TTM)6.12
EY21.86%
EPS(NY)6.09
Fwd EY21.75%
FCF(TTM)7.37
FCFY26.34%
OCF(TTM)8.86
OCFY31.64%
SpS92.73
BVpS21.86
TBVpS-30.65
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.12% | ||
| ROE | 15.6% | ||
| ROCE | 13.26% | ||
| ROIC | 7.82% | ||
| ROICexc | 10.62% | ||
| ROICexgc | N/A | ||
| OM | 8.99% | ||
| PM (TTM) | 3.68% | ||
| GM | 16.63% | ||
| FCFM | 7.95% |
ROA(3y)1.64%
ROA(5y)-0.2%
ROE(3y)12.47%
ROE(5y)-1.53%
ROIC(3y)5.83%
ROIC(5y)N/A
ROICexc(3y)7.61%
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)10.2%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y3.97%
ROICexc growth 5Y-10.52%
OM growth 3Y-2.17%
OM growth 5Y-1.7%
PM growth 3Y-9.63%
PM growth 5Y-10.43%
GM growth 3Y-1.15%
GM growth 5Y-1.79%
F-Score7
Asset Turnover0.58
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.59 | ||
| Debt/FCF | 5.42 | ||
| Debt/EBITDA | 3.04 | ||
| Cap/Depr | 47.77% | ||
| Cap/Sales | 1.6% | ||
| Interest Coverage | 3.3 | ||
| Cash Conversion | 77.41% | ||
| Profit Quality | 216.24% | ||
| Current Ratio | 0.88 | ||
| Quick Ratio | 0.88 | ||
| Altman-Z | 0.95 |
F-Score7
WACC6.28%
ROIC/WACC1.25
Cap/Depr(3y)36.59%
Cap/Depr(5y)41.42%
Cap/Sales(3y)1.54%
Cap/Sales(5y)1.83%
Profit Quality(3y)403.67%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-5.86%
EPS 3Y4%
EPS 5Y-0.97%
EPS Q2Q%-5.44%
EPS Next Y-0.54%
EPS Next 2Y0.6%
EPS Next 3Y1.57%
EPS Next 5Y-0.39%
Revenue 1Y (TTM)-0.7%
Revenue growth 3Y4.82%
Revenue growth 5Y2.18%
Sales Q2Q%-1.44%
Revenue Next Year-5.23%
Revenue Next 2Y-1.94%
Revenue Next 3Y-0.27%
Revenue Next 5Y2.31%
EBIT growth 1Y149.53%
EBIT growth 3Y2.54%
EBIT growth 5Y0.45%
EBIT Next Year21.17%
EBIT Next 3Y8.43%
EBIT Next 5Y12.95%
FCF growth 1Y14.79%
FCF growth 3Y-12.34%
FCF growth 5Y-4.25%
OCF growth 1Y13.71%
OCF growth 3Y-11.52%
OCF growth 5Y-5.32%