WEST PHARMACEUTICAL SERVICES (WST) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:WST - US9553061055 - Common Stock
236.66 USD
-11.12 (-4.49%)
240 USD
+3.34 (+1.41%)
We assign a fundamental rating of 7 out of 10 to WST. WST was compared to 57 industry peers in the Life Sciences Tools & Services industry. WST scores excellent points on both the profitability and health parts. This is a solid base for a good stock. WST is not valued too expensively and it also shows a decent growth rate. These ratings could make WST a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
- WST had positive earnings in the past year.
- WST had a positive operating cash flow in the past year.
- WST had positive earnings in each of the past 5 years.
- WST had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- WST has a Return On Assets of 11.98%. This is amongst the best in the industry. WST outperforms 92.98% of its industry peers.
- WST's Return On Equity of 16.11% is amongst the best of the industry. WST outperforms 87.72% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 14.78%, WST belongs to the top of the industry, outperforming 89.47% of the companies in the same industry.
- WST had an Average Return On Invested Capital over the past 3 years of 17.99%. This is above the industry average of 13.75%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.98% | ||
| ROE | 16.11% | ||
| ROIC | 14.78% |
ROA(3y)15.07%
ROA(5y)15.52%
ROE(3y)20.26%
ROE(5y)21.56%
ROIC(3y)17.99%
ROIC(5y)18.35%
1.3 Margins
- With an excellent Profit Margin value of 16.29%, WST belongs to the best of the industry, outperforming 85.96% of the companies in the same industry.
- In the last couple of years the Profit Margin of WST has grown nicely.
- WST's Operating Margin of 20.71% is amongst the best of the industry. WST outperforms 87.72% of its industry peers.
- WST's Operating Margin has improved in the last couple of years.
- The Gross Margin of WST (35.58%) is comparable to the rest of the industry.
- In the last couple of years the Gross Margin of WST has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.71% | ||
| PM (TTM) | 16.29% | ||
| GM | 35.58% |
OM growth 3Y-8.66%
OM growth 5Y4.7%
PM growth 3Y-10.02%
PM growth 5Y5.33%
GM growth 3Y-6.03%
GM growth 5Y0.95%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so WST is still creating some value.
- Compared to 1 year ago, WST has less shares outstanding
- WST has less shares outstanding than it did 5 years ago.
- Compared to 1 year ago, WST has a worse debt to assets ratio.
2.2 Solvency
- WST has an Altman-Z score of 13.18. This indicates that WST is financially healthy and has little risk of bankruptcy at the moment.
- WST has a Altman-Z score of 13.18. This is amongst the best in the industry. WST outperforms 96.49% of its industry peers.
- WST has a debt to FCF ratio of 0.55. This is a very positive value and a sign of high solvency as it would only need 0.55 years to pay back of all of its debts.
- With an excellent Debt to FCF ratio value of 0.55, WST belongs to the best of the industry, outperforming 91.23% of the companies in the same industry.
- A Debt/Equity ratio of 0.07 indicates that WST is not too dependend on debt financing.
- WST's Debt to Equity ratio of 0.07 is fine compared to the rest of the industry. WST outperforms 63.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.07 | ||
| Debt/FCF | 0.55 | ||
| Altman-Z | 13.18 |
ROIC/WACC1.34
WACC11.06%
2.3 Liquidity
- A Current Ratio of 2.87 indicates that WST has no problem at all paying its short term obligations.
- The Current ratio of WST (2.87) is comparable to the rest of the industry.
- A Quick Ratio of 2.18 indicates that WST has no problem at all paying its short term obligations.
- Looking at the Quick ratio, with a value of 2.18, WST is in line with its industry, outperforming 50.88% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.87 | ||
| Quick Ratio | 2.18 |
3. Growth
3.1 Past
- WST shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 4.59%.
- WST shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.81% yearly.
- WST shows a small growth in Revenue. In the last year, the Revenue has grown by 4.92%.
- The Revenue has been growing by 9.48% on average over the past years. This is quite good.
EPS 1Y (TTM)4.59%
EPS 3Y-7.79%
EPS 5Y15.81%
EPS Q2Q%5.95%
Revenue 1Y (TTM)4.92%
Revenue growth 3Y0.72%
Revenue growth 5Y9.48%
Sales Q2Q%7.73%
3.2 Future
- The Earnings Per Share is expected to grow by 10.12% on average over the next years. This is quite good.
- Based on estimates for the next years, WST will show a small growth in Revenue. The Revenue will grow by 6.45% on average per year.
EPS Next Y6.31%
EPS Next 2Y7.84%
EPS Next 3Y9.51%
EPS Next 5Y10.12%
Revenue Next Year6.25%
Revenue Next 2Y6.26%
Revenue Next 3Y6.44%
Revenue Next 5Y6.45%
3.3 Evolution
- The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
- 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
- Based on the Price/Earnings ratio of 33.47, the valuation of WST can be described as expensive.
- Compared to the rest of the industry, the Price/Earnings ratio of WST indicates a somewhat cheap valuation: WST is cheaper than 64.91% of the companies listed in the same industry.
- When comparing the Price/Earnings ratio of WST to the average of the S&P500 Index (27.30), we can say WST is valued slightly more expensively.
- The Price/Forward Earnings ratio is 30.15, which means the current valuation is very expensive for WST.
- 64.91% of the companies in the same industry are more expensive than WST, based on the Price/Forward Earnings ratio.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.32, WST is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.47 | ||
| Fwd PE | 30.15 |
4.2 Price Multiples
- WST's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. WST is cheaper than 71.93% of the companies in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of WST indicates a somewhat cheap valuation: WST is cheaper than 66.67% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 44.91 | ||
| EV/EBITDA | 22.03 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates WST does not grow enough to justify the current Price/Earnings ratio.
- WST has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)5.3
PEG (5Y)2.12
EPS Next 2Y7.84%
EPS Next 3Y9.51%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.32%, WST is not a good candidate for dividend investing.
- In the last 3 months the price of WST has falen by -20.44%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
- Compared to an average industry Dividend Yield of 0.09, WST pays a better dividend. On top of this WST pays more dividend than 87.72% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, WST's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.32% |
5.2 History
- The dividend of WST has a limited annual growth rate of 5.90%.
- WST has been paying a dividend for at least 10 years, so it has a reliable track record.
- WST has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)5.9%
Div Incr Years32
Div Non Decr Years34
5.3 Sustainability
- WST pays out 12.34% of its income as dividend. This is a sustainable payout ratio.
- WST's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP12.34%
EPS Next 2Y7.84%
EPS Next 3Y9.51%
WEST PHARMACEUTICAL SERVICES / WST FAQ
What is the fundamental rating for WST stock?
ChartMill assigns a fundamental rating of 7 / 10 to WST.
What is the valuation status for WST stock?
ChartMill assigns a valuation rating of 4 / 10 to WEST PHARMACEUTICAL SERVICES (WST). This can be considered as Fairly Valued.
Can you provide the profitability details for WEST PHARMACEUTICAL SERVICES?
WEST PHARMACEUTICAL SERVICES (WST) has a profitability rating of 8 / 10.
Can you provide the financial health for WST stock?
The financial health rating of WEST PHARMACEUTICAL SERVICES (WST) is 8 / 10.
How sustainable is the dividend of WEST PHARMACEUTICAL SERVICES (WST) stock?
The dividend rating of WEST PHARMACEUTICAL SERVICES (WST) is 6 / 10 and the dividend payout ratio is 12.34%.