Beste broker van 2020 (volgens Beleggers Belangen)
Profiteer van voorbeurs en nabeurs handelen!
Aandelen kopen voor €3.000: €1,80 kosten (o.a. BE&NL)
Vraag het informatiepakket van MeXeM aan
Mar. 19, 2021 3:39 PM ETKellogg Company (K)14 Comments4 Likes
Kellogg has been in a positive light for its short-term growth.
ROE has been on an upward trend since Q2 2019.
The company appears to be slightly undervalued in the long-term perspective, but many forecasts argue that it's overvalued.
This article tells what gains investors could likely make with Kellogg Company and what the real value is versus the current share price.
Kellogg (K) share price has increased by 6.4% in the last month, outperforming the S&P 500. This boom in short-term growth is due mainly to its 2021 forecast. When viewing the company's long-term potential, its industry has had solid growth. The packaging industry has experienced a 30.5% five-year growth at the end of 2020, from $589.9 billion to $770.5 billion. While this growth is a positive factor, Kellogg still has $7.47 billion in total debt, $6.75 billion long term and $729 million short term, as of Feb. 22. As a result, about a dozen Wall Street analysts have set a $66.09 price target for K, an increase over its current price of $60.63 on March 18.
When considering these current stories about Kellogg Company, we need to determine which news topics will have a long-term and ongoing effect on the company and its share price. Certainly, the company's heavy long-term debt will be a factor for the foreseeable future. As we highlight below, the poor current ratio and debt/equity ratio are essential factors that need to change for the company to improve.
While current news stories, good or bad can sway our opinion about investing in a company, it's good to analyze the fundamentals of the company and to see where it's been in the past and in which direction it's heading.
This article will focus on the long-term fundamentals of the company, which tend to give us a better picture of the company as a viable investment. I also analyze the value of the company vs. the price and help you to determine if Kellogg is currently trading at a bargain price. I provide various situations which help estimate the company's future returns. In closing, I will tell you my personal opinion about whether I'm interested in taking a position in this company and why.
Snapshot of the Company
A fast way for me to get an overall understanding of the condition of the business is to use the BTMA Stock Analyzer's company rating score. It shows a score of around 75/100. Therefore, Kellogg is considered to be a good company to invest in, since 70 is the lowest good company score. Kellogg has high scores for 10 year Upward Price, ROE, Ability to Recover from a Market Crash, GMP. It has mediocre scores for EPS, ROIC. It has a low score for PEG Ratio. A low PEG Ratio score indicates that the company may not be experiencing high growth consistently over the past five years. In summary, these findings show us that Kellogg seems to have above average fundamentals since the majority of categories produce good scores.
Let's examine the price per share history first. In the chart below, we can see that the price per share has increased from 2012-2016. However, Kellogg Company's price per share has mostly been on a decline since 2016 until present. Overall, share price average has grown by about 14.35% over the past 10 years or a Compound Annual Growth Rate of 1.5%. This is a poor return.
Looking closer at earnings history, we see that earnings haven't grown consistently over the past 10 years. There has been much volatility with years of great growth followed by large declines. The year-to-year earnings variations make me wonder if the changes in commodity prices of cereal and grain help to cause this increased volatility.
Consistent earnings make it easier to accurately estimate the future growth and value of the company. So, in this regard, Kellogg does not have the best qualities to accurately estimate future growth or current value.
Since earnings and price per share don't always give the whole picture, it's good to look at other factors like the return on equity, return on invested capital, and gross margins.
Return on Equity
Overall, the five-year ROE has stayed at impressive levels. However, two things to mention are the volatility of the ROE and dramatic changes of ROE from one year to the next. As long as the ROE stays at sufficient levels, I'm not as worried about the volatility, but it's still something to keep in mind. This volatility indicates that Kellogg might not be the most stable stock. Five-year average ROE is solid at around 46%. For return on equity (ROE) I look for a five-year average of 16% or more. So, Kellogg easily meets my requirements.
Let's compare the ROE of this company to its industry. The average ROE of 26 Packaging companies is 9.76%.
Therefore, Kellogg Company's five-year average of 46% and current ROE of 42.7% are well above average.
Return on Invested Capital
The ROIC chart shows volatility like the ROE chart. In addition, the ROIC is problematic because levels are too low to offset the volatility. Five-year average ROIC is below average at around 12%. For return on invested capital - ROIC, I also look for a five-year average of 16% or more. So, Kellogg does not pass by my standards.
Gross Margin Percent
The Gross Margin Percent has declined overall during the past five years. The good news is that the levels have been high enough, but I'm cautious about companies which can't maintain their margins.
Five-year GMP is above average at around 35%. I typically look for companies with gross margin percent consistently above 30%. So, Kellogg still has acceptable margin levels, but I would watch to see if these levels continue to decline in the coming years.
Looking at other fundamentals involving the balance sheet, we can see that the debt-to-equity is more than 1. This tells us that the company owes more than it owns.
Kellogg's current ratio of .66 is unsatisfactory, indicating that it doesn't have an adequate ability to use its assets to pay its short-term debt.
Ideally, we'd want to see a current ratio of more than 1, so Kellogg does not meet this amount.
According to the balance sheet, the company is below average with regard to its financial health. In the long term, the company does not have a strong debt-to-equity. In the short term, the company's financial situation also could use improvement.
The Price-Earnings Ratio of 16.3 indicates that Kellogg is selling at a slightly above average price when comparing Kellogg's P/E Ratio to a long-term market average P/E Ratio of 15. The 10-year and five-year average PE Ratio of Kellogg has typically been between 21.8 and 21.6, so this indicates that Kellogg could be currently trading at a low price when compared to Kellogg's average historical PE Ratio range.
Kellogg currently pays a dividend of 3.83% (or 3.82% over the last 12 months).
The Story Behind The Dividend
With regard to dividend history, I'm first interested in knowing if the payout ratio is sustainable. At this time, it's around 62%, which means that there's still some room to grow the dividend, but the payout ratio should be watched since it's approaching high levels. Also notice that Kellogg has a regular history of buying back shares, which contributes to higher payout ratios.
If we look only at the dividend yield, we see a range of 2.74 % to 3.86%. This stock pays out a substantial dividend. Dividend payouts have increased somewhat consistently over the past seven-year period at about 2.89% compound annual growth. Also, it's positive to note that dividend yield has been increasing overall during this period. Therefore, this stock may be desirable for some dividend investors.
If I were currently interested in buying Kellogg now for the dividend, I would be trying to buy when the dividend yield was highest relative to its past. From the chart below, we can see that the dividend yield is near a high point relative to the past 10 years. Therefore, it's an ideal time to buy now if my priority is a better than average return through dividends.
Overall, the dividend situation with Kellogg is very good. On the positive side, the stock pays a substantial and consistent dividend. The dividend per share and dividend yield has been increasing over the years. Finally, the dividend yield is near a high level when compared with the past 10 years.
On the negative side, the payout ratio is approaching high levels and should be watched...
En het artikel gaat nog eindeloos verder. Maar bovenstaande is het punt waarop mijn interesse gewekt wordt.
bron: https://seekingalpha.com/article/441511 ... tial-gains
Laatste artikelen op Beursig.com
Alleszins werd vandaag mijn verkoopkoers van 68 USDollar voor mijn kellogg aandelen (vandaag kwartaalcijfers) gerealiseerd.
En vandaag halen we wel de 43 voor Kraft Heinz.