ZIMMER BIOMET HOLDINGS INC (ZBH) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ZBH - US98956P1021 - Common Stock
85.99 USD
-1.33 (-1.52%)
85.99 USD
0 (0%)
Overall ZBH gets a fundamental rating of 6 out of 10. We evaluated ZBH against 184 industry peers in the Health Care Equipment & Supplies industry. While ZBH belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. ZBH scores decently on growth, while it is valued quite cheap. This could make an interesting combination. ZBH also has an excellent dividend rating. These ratings could make ZBH a good candidate for value and dividend investing.
1. Profitability
1.1 Basic Checks
- ZBH had positive earnings in the past year.
- ZBH had a positive operating cash flow in the past year.
- ZBH had positive earnings in 4 of the past 5 years.
- In the past 5 years ZBH always reported a positive cash flow from operatings.
1.2 Ratios
- The Return On Assets of ZBH (3.43%) is better than 79.35% of its industry peers.
- The Return On Equity of ZBH (6.31%) is better than 79.35% of its industry peers.
- ZBH has a better Return On Invested Capital (5.73%) than 78.26% of its industry peers.
- ZBH had an Average Return On Invested Capital over the past 3 years of 5.98%. This is below the industry average of 8.81%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.43% | ||
| ROE | 6.31% | ||
| ROIC | 5.73% |
ROA(3y)3.36%
ROA(5y)2.25%
ROE(3y)5.79%
ROE(5y)3.88%
ROIC(3y)5.98%
ROIC(5y)4.96%
1.3 Margins
- ZBH has a Profit Margin of 10.05%. This is amongst the best in the industry. ZBH outperforms 84.24% of its industry peers.
- ZBH's Profit Margin has declined in the last couple of years.
- ZBH has a Operating Margin of 19.10%. This is amongst the best in the industry. ZBH outperforms 91.30% of its industry peers.
- In the last couple of years the Operating Margin of ZBH has grown nicely.
- ZBH's Gross Margin of 71.44% is amongst the best of the industry. ZBH outperforms 80.43% of its industry peers.
- ZBH's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.1% | ||
| PM (TTM) | 10.05% | ||
| GM | 71.44% |
OM growth 3Y9.41%
OM growth 5Y4.28%
PM growth 3Y26.01%
PM growth 5Y-3.65%
GM growth 3Y0.08%
GM growth 5Y0.05%
2. Health
2.1 Basic Checks
- ZBH has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- ZBH has less shares outstanding than it did 1 year ago.
- Compared to 5 years ago, ZBH has less shares outstanding
- Compared to 1 year ago, ZBH has a worse debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 2.39 indicates that ZBH is not a great score, but indicates only limited risk for bankruptcy at the moment.
- ZBH's Altman-Z score of 2.39 is fine compared to the rest of the industry. ZBH outperforms 65.76% of its industry peers.
- The Debt to FCF ratio of ZBH is 7.17, which is on the high side as it means it would take ZBH, 7.17 years of fcf income to pay off all of its debts.
- ZBH's Debt to FCF ratio of 7.17 is fine compared to the rest of the industry. ZBH outperforms 75.54% of its industry peers.
- ZBH has a Debt/Equity ratio of 0.59. This is a neutral value indicating ZBH is somewhat dependend on debt financing.
- ZBH has a worse Debt to Equity ratio (0.59) than 61.41% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | 7.17 | ||
| Altman-Z | 2.39 |
ROIC/WACC0.62
WACC9.27%
2.3 Liquidity
- ZBH has a Current Ratio of 2.43. This indicates that ZBH is financially healthy and has no problem in meeting its short term obligations.
- With a Current ratio value of 2.43, ZBH perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
- ZBH has a Quick Ratio of 1.39. This is a normal value and indicates that ZBH is financially healthy and should not expect problems in meeting its short term obligations.
- ZBH has a Quick ratio (1.39) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.43 | ||
| Quick Ratio | 1.39 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 2.53% over the past year.
- Measured over the past 5 years, ZBH shows a small growth in Earnings Per Share. The EPS has been growing by 0.33% on average per year.
- ZBH shows a small growth in Revenue. In the last year, the Revenue has grown by 5.47%.
- ZBH shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.77% yearly.
EPS 1Y (TTM)2.53%
EPS 3Y2.77%
EPS 5Y0.33%
EPS Q2Q%9.2%
Revenue 1Y (TTM)5.47%
Revenue growth 3Y3.99%
Revenue growth 5Y-0.77%
Sales Q2Q%9.71%
3.2 Future
- The Earnings Per Share is expected to grow by 5.51% on average over the next years.
- The Revenue is expected to grow by 4.69% on average over the next years.
EPS Next Y3.17%
EPS Next 2Y3.55%
EPS Next 3Y4.7%
EPS Next 5Y5.51%
Revenue Next Year7.04%
Revenue Next 2Y6.09%
Revenue Next 3Y5.46%
Revenue Next 5Y4.69%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- ZBH is valuated reasonably with a Price/Earnings ratio of 10.63.
- Based on the Price/Earnings ratio, ZBH is valued cheaply inside the industry as 94.57% of the companies are valued more expensively.
- Compared to an average S&P500 Price/Earnings ratio of 28.87, ZBH is valued rather cheaply.
- ZBH is valuated reasonably with a Price/Forward Earnings ratio of 10.02.
- Based on the Price/Forward Earnings ratio, ZBH is valued cheaply inside the industry as 94.57% of the companies are valued more expensively.
- ZBH's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.96.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.63 | ||
| Fwd PE | 10.02 |
4.2 Price Multiples
- 91.85% of the companies in the same industry are more expensive than ZBH, based on the Enterprise Value to EBITDA ratio.
- Based on the Price/Free Cash Flow ratio, ZBH is valued cheaply inside the industry as 94.02% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.07 | ||
| EV/EBITDA | 9.27 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ZBH does not grow enough to justify the current Price/Earnings ratio.
- ZBH has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)3.35
PEG (5Y)32.39
EPS Next 2Y3.55%
EPS Next 3Y4.7%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.04%, ZBH has a reasonable but not impressive dividend return.
- ZBH's Dividend Yield is rather good when compared to the industry average which is at 0.20. ZBH pays more dividend than 94.02% of the companies in the same industry.
- With a Dividend Yield of 1.04, ZBH pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.04% |
5.2 History
- The dividend of ZBH has a limited annual growth rate of 0.19%.
- ZBH has paid a dividend for at least 10 years, which is a reliable track record.
- ZBH has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)0.19%
Div Incr Years0
Div Non Decr Years12
5.3 Sustainability
- ZBH pays out 23.70% of its income as dividend. This is a sustainable payout ratio.
- ZBH's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP23.7%
EPS Next 2Y3.55%
EPS Next 3Y4.7%
ZIMMER BIOMET HOLDINGS INC / ZBH FAQ
Can you provide the ChartMill fundamental rating for ZIMMER BIOMET HOLDINGS INC?
ChartMill assigns a fundamental rating of 6 / 10 to ZBH.
Can you provide the valuation status for ZIMMER BIOMET HOLDINGS INC?
ChartMill assigns a valuation rating of 7 / 10 to ZIMMER BIOMET HOLDINGS INC (ZBH). This can be considered as Undervalued.
What is the profitability of ZBH stock?
ZIMMER BIOMET HOLDINGS INC (ZBH) has a profitability rating of 7 / 10.
How financially healthy is ZIMMER BIOMET HOLDINGS INC?
The financial health rating of ZIMMER BIOMET HOLDINGS INC (ZBH) is 5 / 10.
Can you provide the dividend sustainability for ZBH stock?
The dividend rating of ZIMMER BIOMET HOLDINGS INC (ZBH) is 7 / 10 and the dividend payout ratio is 23.7%.