WESTROCK CO (WRK) Stock Fundamental Analysis
NYSE:WRK - New York Stock Exchange, Inc. - US96145D1054 - Common Stock - Currency: USD
WRK gets a fundamental rating of 2 out of 10. The analysis compared the fundamentals against 24 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.
1. Profitability
1.1 Basic Checks
In the past year WRK was profitable.
WRK had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: WRK reported negative net income in multiple years.
In the past 5 years WRK always reported a positive cash flow from operatings.
1.2 Ratios
WRK's Return On Assets of 1.13% 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 Equity, with a value of 3.03%, WRK is doing worse than 65.22% of the companies in the same industry.
WRK has a worse Return On Invested Capital (3.67%) than 73.91% of its industry peers.
WRK had an Average Return On Invested Capital over the past 3 years of 4.59%. This is below the industry average of 7.64%.
| 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 has a Profit Margin of 1.57%. This is in the lower half of the industry: WRK underperforms 65.22% of its industry peers.
WRK has a worse Operating Margin (5.37%) than 73.91% of its industry peers.
In the last couple of years the Operating Margin of WRK has declined.
Looking at the Gross Margin, with a value of 17.67%, WRK is doing worse than 78.26% of the companies in the same industry.
In the last couple of years the Gross Margin of WRK has declined.
| 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%
2. Health
2.1 Basic Checks
WRK 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 WRK has been increased compared to 1 year ago.
WRK has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, WRK has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.40, we must say that WRK is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of WRK (1.40) is worse than 78.26% of its industry peers.
WRK has a debt to FCF ratio of 19.15. This is a negative value and a sign of low solvency as WRK would need 19.15 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 19.15, WRK is doing worse than 65.22% of the companies in the same industry.
WRK has a Debt/Equity ratio of 0.77. This is a neutral value indicating WRK is somewhat dependend on debt financing.
WRK's Debt to Equity ratio of 0.77 is fine compared to the rest 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
WRK has a Current Ratio of 1.34. This is a normal value and indicates that WRK is financially healthy and should not expect problems in meeting its short term obligations.
WRK has a Current ratio (1.34) which is comparable to the rest of the industry.
WRK has a Quick Ratio of 1.34. This is a bad value and indicates that WRK is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of WRK (0.85) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.34 | ||
| Quick Ratio | 0.85 |
3. Growth
3.1 Past
The earnings per share for WRK have decreased strongly by -46.62% in the last year.
WRK shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -5.84% yearly.
WRK shows a decrease in Revenue. In the last year, the revenue decreased by -7.89%.
The Revenue has been growing slightly by 4.52% on average over the past years.
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
Based on estimates for the next years, WRK will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.14% on average per year.
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.
4. Valuation
4.1 Price/Earnings Ratio
WRK is valuated rather expensively with a Price/Earnings ratio of 22.49.
65.22% of the companies in the same industry are cheaper than WRK, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of WRK to the average of the S&P500 Index (29.63), we can say WRK is valued slightly cheaper.
WRK is valuated correctly with a Price/Forward Earnings ratio of 14.26.
WRK's Price/Forward Earnings is on the same level as the industry average.
WRK's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.49 | ||
| Fwd PE | 14.26 |
4.2 Price Multiples
WRK's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. WRK is cheaper than 60.87% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of WRK indicates a slightly more expensive valuation: WRK is more expensive than 65.22% of the companies listed in the same industry.
| 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%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.43%, WRK has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.14, WRK pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.27, WRK has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.43% |
5.2 History
The dividend of WRK decreases each year by -8.63%.
WRK has paid a dividend for at least 10 years, which is 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%
51.51
+1.76 (+3.54%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryContainers & Packaging
Earnings (Last)
Earnings (Next)
Inst Owners6.59%
Inst Owner Change-91.8%
Ins Owners1.02%
Ins Owner Change0%
Market Cap13.30B
Analysts71.67
Price Target54.37 (5.55%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.43% |
Yearly Dividend1.1
Dividend Growth(5Y)-8.63%
DP97.28%
Div Incr Years2
Div Non Decr Years2
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)12.23%
Min EPS beat(2)-42.7%
Max EPS beat(2)67.16%
EPS beat(4)3
Avg EPS beat(4)30%
Min EPS beat(4)-42.7%
Max EPS beat(4)86.52%
EPS beat(8)6
Avg EPS beat(8)21.28%
EPS beat(12)10
Avg EPS beat(12)16.22%
EPS beat(16)13
Avg EPS beat(16)16.85%
Revenue beat(2)0
Avg Revenue beat(2)-3.05%
Min Revenue beat(2)-4.6%
Max Revenue beat(2)-1.49%
Revenue beat(4)0
Avg Revenue beat(4)-2.82%
Min Revenue beat(4)-4.6%
Max Revenue beat(4)-1.49%
Revenue beat(8)0
Avg Revenue beat(8)-2.32%
Revenue beat(12)3
Avg Revenue beat(12)-1.06%
Revenue beat(16)4
Avg Revenue beat(16)-1%
PT rev (1m)0%
PT rev (3m)19.62%
EPS NQ rev (1m)1.19%
EPS NQ rev (3m)-0.7%
EPS NY rev (1m)0.37%
EPS NY rev (3m)1.56%
Revenue NQ rev (1m)0.1%
Revenue NQ rev (3m)-0.92%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.49 | ||
| Fwd PE | 14.26 | ||
| P/S | 0.68 | ||
| P/FCF | 28.18 | ||
| P/OCF | 8.32 | ||
| P/B | 1.32 | ||
| P/tB | 3.94 | ||
| EV/EBITDA | 8.46 |
EPS(TTM)2.29
EY4.45%
EPS(NY)3.61
Fwd EY7.01%
FCF(TTM)1.83
FCFY3.55%
OCF(TTM)6.19
OCFY12.02%
SpS75.37
BVpS38.99
TBVpS13.08
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.13% | ||
| ROE | 3.03% | ||
| ROCE | 4.72% | ||
| ROIC | 3.67% | ||
| ROICexc | 3.76% | ||
| ROICexgc | 5.44% | ||
| OM | 5.37% | ||
| PM (TTM) | 1.57% | ||
| GM | 17.67% | ||
| FCFM | 2.43% |
ROA(3y)0.06%
ROA(5y)0.13%
ROE(3y)-0.3%
ROE(5y)0%
ROIC(3y)4.59%
ROIC(5y)4.4%
ROICexc(3y)4.65%
ROICexc(5y)4.44%
ROICexgc(3y)7.13%
ROICexgc(5y)7.05%
ROCE(3y)5.89%
ROCE(5y)5.66%
ROICexcg growth 3Y3.04%
ROICexcg growth 5Y-7.16%
ROICexc growth 3Y6.65%
ROICexc growth 5Y-4.49%
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%
F-Score5
Asset Turnover0.72
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | 19.15 | ||
| Debt/EBITDA | 2.99 | ||
| Cap/Depr | 73.32% | ||
| Cap/Sales | 5.79% | ||
| Interest Coverage | 2.19 | ||
| Cash Conversion | 61.92% | ||
| Profit Quality | 154.77% | ||
| Current Ratio | 1.34 | ||
| Quick Ratio | 0.85 | ||
| Altman-Z | 1.4 |
F-Score5
WACC7.16%
ROIC/WACC0.51
Cap/Depr(3y)62.72%
Cap/Depr(5y)68.91%
Cap/Sales(3y)4.68%
Cap/Sales(5y)5.42%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-46.62%
EPS 3Y3.3%
EPS 5Y-5.84%
EPS Q2Q%-49.35%
EPS Next Y-28.93%
EPS Next 2Y9.37%
EPS Next 3Y11.37%
EPS Next 5Y11.14%
Revenue 1Y (TTM)-7.89%
Revenue growth 3Y4.93%
Revenue growth 5Y4.52%
Sales Q2Q%-10.44%
Revenue Next Year-4.97%
Revenue Next 2Y-0.29%
Revenue Next 3Y0.27%
Revenue Next 5Y1.08%
EBIT growth 1Y-34.44%
EBIT growth 3Y1.6%
EBIT growth 5Y-4.15%
EBIT Next Year97.6%
EBIT Next 3Y34.37%
EBIT Next 5Y20.78%
FCF growth 1Y-60.82%
FCF growth 3Y-14.38%
FCF growth 5Y-5.94%
OCF growth 1Y-22.8%
OCF growth 3Y-4.07%
OCF growth 5Y-1.09%