Overall WRK gets a fundamental rating of 2 out of 10. We evaluated WRK against 22 industry peers in the Containers & Packaging industry. Both the profitability and financial health of WRK have multiple concerns. WRK is valued expensive and it does not seem to be growing.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

WRK had positive earnings in the past year.
In the past year WRK had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: WRK reported negative net income in multiple years.
WRK had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

WRK has a worse Return On Assets (1.13%) than 65.22% of its industry peers.
WRK's Return On Equity of 3.03% is on the low side compared to the rest of the industry. WRK is outperformed by 65.22% of its industry peers.
Looking at the Return On Invested Capital, with a value of 3.67%, WRK is doing worse than 73.91% of the companies in the same industry.
WRK had an Average Return On Invested Capital over the past 3 years of 4.59%. This is below the industry average of 7.62%.

		Industry Rank	Sector Rank
ROA	1.13%
ROE	3.03%
ROIC	3.67%

ROA(3y)0.06%

ROA(5y)0.13%

ROE(3y)-0.3%

ROE(5y)0%

ROIC(3y)4.59%

ROIC(5y)4.4%

1.3 Margins

WRK's Profit Margin of 1.57% is on the low side compared to the rest of the industry. WRK is outperformed by 65.22% of its industry peers.
WRK has a worse Operating Margin (5.37%) than 73.91% of its industry peers.
WRK's Operating Margin has declined in the last couple of years.
WRK's Gross Margin of 17.67% is on the low side compared to the rest of the industry. WRK is outperformed by 78.26% of its industry peers.
WRK's Gross Margin has declined in the last couple of years.

		Industry Rank	Sector Rank
OM	5.37%
PM (TTM)	1.57%
GM	17.67%

OM growth 3Y-3.18%

OM growth 5Y-8.29%

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y-0.99%

GM growth 5Y-3.08%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so WRK is destroying value.
The number of shares outstanding for WRK has been increased compared to 1 year ago.
The debt/assets ratio for WRK is higher compared to a year ago.

2.2 Solvency

WRK has an Altman-Z score of 1.40. This is a bad value and indicates that WRK is not financially healthy and even has some risk of bankruptcy.
WRK has a worse Altman-Z score (1.40) than 78.26% of its industry peers.
The Debt to FCF ratio of WRK is 19.15, which is on the high side as it means it would take WRK, 19.15 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of WRK (19.15) is worse than 65.22% of its industry peers.
WRK has a Debt/Equity ratio of 0.77. This is a neutral value indicating WRK is somewhat dependend on debt financing.
WRK has a Debt to Equity ratio of 0.77. This is in the better half of the industry: WRK outperforms 73.91% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.77
Debt/FCF	19.15
Altman-Z	1.4

ROIC/WACC0.51

WACC7.16%

2.3 Liquidity

A Current Ratio of 1.34 indicates that WRK should not have too much problems paying its short term obligations.
The Current ratio of WRK (1.34) is comparable to the rest of the industry.
A Quick Ratio of 0.85 indicates that WRK may have some problems paying its short term obligations.
WRK has a Quick ratio (0.85) which is comparable to the rest of the industry.

		Industry Rank	Sector Rank
Current Ratio	1.34
Quick Ratio	0.85

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

WRK shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -46.62%.
The Earnings Per Share has been decreasing by -5.84% on average over the past years.
The Revenue has decreased by -7.89% in the past year.
WRK shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.52% yearly.

EPS 1Y (TTM)-46.62%

EPS 3Y3.3%

EPS 5Y-5.84%

EPS Q2Q%-49.35%

Revenue 1Y (TTM)-7.89%

Revenue growth 3Y4.93%

Revenue growth 5Y4.52%

Sales Q2Q%-10.44%

3.2 Future

WRK is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.14% yearly.
The Revenue is expected to grow by 1.08% on average over the next years.

EPS Next Y-28.93%

EPS Next 2Y9.37%

EPS Next 3Y11.37%

EPS Next 5Y11.14%

Revenue Next Year-4.97%

Revenue Next 2Y-0.29%

Revenue Next 3Y0.27%

Revenue Next 5Y1.08%

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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 22.49, WRK is valued on the expensive side.
Based on the Price/Earnings ratio, WRK is valued a bit more expensive than the industry average as 65.22% of the companies are valued more cheaply.
The average S&P500 Price/Earnings ratio is at 27.21. WRK is around the same levels.
A Price/Forward Earnings ratio of 14.26 indicates a correct valuation of WRK.
WRK's Price/Forward Earnings ratio is in line with the industry average.
WRK is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	22.49
Fwd PE	14.26

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, WRK is valued a bit cheaper than the industry average as 60.87% of the companies are valued more expensively.
65.22% of the companies in the same industry are cheaper than WRK, based on the Price/Free Cash Flow ratio.

		Industry Rank	Sector Rank
P/FCF	28.18
EV/EBITDA	8.46

4.3 Compensation for Growth

PEG (NY)N/A

PEG (5Y)N/A

EPS Next 2Y9.37%

EPS Next 3Y11.37%

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5. Dividend

5.1 Amount

WRK has a Yearly Dividend Yield of 2.43%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.35, WRK pays a bit more dividend than its industry peers.
WRK's Dividend Yield is a higher than the S&P500 average which is at 1.82.

		Industry Rank	Sector Rank
Dividend Yield	2.43%

5.2 History

The dividend of WRK decreases each year by -8.63%.
WRK has been paying a dividend for at least 10 years, so it has a reliable track record.
WRK has decreased its dividend in the last 3 years.

Dividend Growth(5Y)-8.63%

Div Incr Years2

Div Non Decr Years2

5.3 Sustainability

97.28% of the earnings are spent on dividend by WRK. This is not a sustainable payout ratio.

DP97.28%

EPS Next 2Y9.37%

EPS Next 3Y11.37%

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WESTROCK CO / WRK FAQ

What is the ChartMill fundamental rating of WESTROCK CO (WRK) stock?

ChartMill assigns a fundamental rating of 2 / 10 to WRK.

What is the valuation status for WRK stock?

ChartMill assigns a valuation rating of 2 / 10 to WESTROCK CO (WRK). This can be considered as Overvalued.

Can you provide the profitability details for WESTROCK CO?

WESTROCK CO (WRK) has a profitability rating of 2 / 10.

How financially healthy is WESTROCK CO?

The financial health rating of WESTROCK CO (WRK) is 2 / 10.

What is the expected EPS growth for WESTROCK CO (WRK) stock?

The Earnings per Share (EPS) of WESTROCK CO (WRK) is expected to decline by -28.93% in the next year.