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SpartanNash

Nasdaq:SPTN
Snowflake Description

Adequate balance sheet average dividend payer.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
SPTN
Nasdaq
$857M
Market Cap
  1. Food and Staples Retailing
Company description

SpartanNash Company distributes and retails grocery products. More info.


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3 Month History
SPTN
Industry
5yr Volatility vs Market

Value

 Is SpartanNash undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of SpartanNash to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.

How is this discounted cash flow calculated?

Current Discount
Amount off the current price SpartanNash is available for.
Intrinsic value
36%
Share price is $23.18 vs Future cash flow value of $36.12
Current Discount Checks
For SpartanNash to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
  • SpartanNash's share price is below the future cash flow value, and at a moderate discount (> 20%).
  • SpartanNash's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for SpartanNash's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are SpartanNash's earnings available for a low price, and how does this compare to other companies in the same industry?
  • SpartanNash is loss making, we can't compare it's value to the US Food and Staples Retailing industry average.
  • SpartanNash is loss making, we can't compare the value of its earnings to the US market.
Price based on expected Growth
Does SpartanNash's expected growth come at a high price?
  • SpartanNash is loss making, we can't assess if it's growth is good value.
Price based on value of assets
What value do investors place on SpartanNash's assets?
  • SpartanNash is good value based on assets compared to the US Food and Staples Retailing industry average.
X
Value checks
We assess SpartanNash's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Food and Staples Retailing industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Food and Staples Retailing industry average (and greater than 0)? (1 check)
  5. SpartanNash has a total score of 2/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.
    Note 2: PEG ratio is based on analysts EPS growth expectations in 1 year (0%).

    Full details on the Value part of the Simply Wall St company analysis model.
X
Discounted cash flow (2 Stage Free Cash Flow to Equity)

The calculations below outline how an intrinsic value for SpartanNash is arrived at by discounting future cash flows to their present value. We use analyst's estimates of cash flows going forward 5 years.

See our documentation to learn about this calculation.

5 year cash flow forecast

Present value of next 5 years cash flows:
$190

Terminal Value

Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g)

Terminal Value = $111 × (1 + 2.47%) ÷ (8.93% – 2.47%)

Terminal value based on the Perpetuity Method where growth (g) = 2.47%:
$1,756

Present value of terminal value:
$1,145

Equity Value

Equity Value (Total value) = Present value of next 5 years cash flows + terminal value
$1,335 = $190 + $1,145

Value = Total value / Shares Outstanding ($1,335 / 37)

Discount to Share Price

Value per share:
$36.12

Current discount (share price of $23.18): 35.82%



Estimate of Discount Rate

The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.

Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)

Discount rate = 8.93% = 2.47% + (0.858 * 7.53%)



Estimate of Bottom Up Beta

The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value ($857,004,724).

Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))

0.858 = 0.554 (1 + (1- 30%) (78.29%))

Levered Beta used in calculation = 0.858



Assumptions
  1. The risk free rate of 2.47% is from the 10 year government bond rate in USD.
  2. The bottom-up beta is estimated by analysing other companies in the same industry.
  3. The Equity Risk Premium is calculated by subtracting the risk free rate from the market return premium (7.53%) (source: Buffet).
  4. The dividend discount model is automatically used for companies in the following industries: Banks, Insurance, Real Estate Investment Trusts (REITs), Diversified Financial Services and Capital Markets.

Future Performance

 How is SpartanNash expected to perform in the next 1 to 3 years based on estimates from 6 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
40.2%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is SpartanNash expected to grow at an attractive rate?
  • SpartanNash's earnings growth is expected to exceed the low risk savings rate of 3.6%.
Growth vs Market Checks
  • SpartanNash's earnings growth is expected to exceed the US market average.
  • SpartanNash's revenue growth is positive but not above the US market average.
Annual Growth Rates Comparison
Analysts growth expectations
Super high growth metrics
High Growth Checks
  • SpartanNash's earnings are expected to grow significantly at over 20% yearly.
  • SpartanNash's revenue is expected to grow by 1.5% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • SpartanNash is not expected to perform strongly, Return on Equity (ROE) in 3 years is estimated to be below 20%.

Improvement & Relative to industry
  • Performance (ROE) is expected to be below the current US Food and Staples Retailing industry average.
  • An improvement in SpartanNash's performance (ROE) is expected over the next 3 years.
X
Future performance checks
We assess SpartanNash's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the US market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the US market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
SpartanNash has a total score of 3/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has SpartanNash performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare SpartanNash's growth in the last year to its industry (Food and Staples Retailing).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • SpartanNash does not currently make a profit.
Earnings and Revenue History
SpartanNash's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • SpartanNash has negative negative earnings from operations, therefore its ROE is meaningless.
  • SpartanNash performed worse than the US Food and Staples Retailing industry average based on Return on Assets (ROA) last year.
  • Performance based on Return on Capital Employed (ROCE) has improved significantly over 3 years.
X
Past performance checks
We assess SpartanNash's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Food and Staples Retailing industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
SpartanNash has a total score of 1/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is SpartanNash's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up SpartanNash's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • SpartanNash is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • SpartanNash's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of SpartanNash's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of stock/ inventory/ unsold assets.
  • Total debt is covered by total short term assets, assets are 1.5x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
  • SpartanNash's level of debt (95% of total debt) compared to net worth is high (greater than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (48.4% vs 95% today).
  • Total debt is well covered by annual operating cash flow (21.5%, greater than 20% of total debt).
  • Interest on debt is well covered by earnings (EBIT is 6.1x coverage).
X
Financial health checks
We assess SpartanNash's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by short term assets? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. SpartanNash has a total score of 4/6, see the detailed checks below.


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

 What is SpartanNash's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
2.85%
Current annual income from SpartanNash dividends. Estimated to be 3.4% next year.
If you bought $2,000 of SpartanNash shares you are expected to receive $1 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Paying above low risk savings rate (2.25%).
  • Paying below markets top dividend payers (3.18%).
Upcoming dividend payment

Purchase SpartanNash on or before the 'Buy Limit' to receive their next dividend payment.

Dividends are usually paid every 3 or 6 months, you can time your share purchase to take advantage of upcoming dividend payments.
Dividend payment calendar
Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
  • Dividends per share have been stable in the past 10 years.
  • Dividends per share have increased over the past 10 years.
Current Payout to shareholders
What portion of SpartanNash's earnings are paid to the shareholders as a dividend.
  • The company is paying a dividend however it is incurring a loss.
Future Payout to shareholders
  • Dividends after 3 years are expected to be well covered by net profit (2.6x coverage).
X
Income/ dividend checks
We assess SpartanNash's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.5%) - if not then the rest of the checks are ignored.
  2. Current dividend yield, is there one at all, is it higher than the low risk savings rate, and is it above the top 25% of dividend payers? (2 checks)
  3. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  4. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  5. How sustainable is the dividend, can SpartanNash afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  6. SpartanNash has a total score of 4/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of SpartanNash's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Dave Staples, image provided by Google.
Dave Staples
COMPENSATION $1,991,288
AGE 54
TENURE AS CEO 0.5 years
CEO Bio

Mr. David M. Staples, also known as Dave, has been Vice President and Treasurer of Nash Finch Co. since November 19, 2013. Mr. Staples has been President of SpartanNash Company (formerly, Spartan Stores Inc.) since August 2016 and also has been its Chief Operating Officer since March 1, 2015. He has been the Chief Executive Officer at SpartanNash Company since May 23, 2017. He serves as Vice President and Treasurer at U Save Foods, Inc. He served as an Executive Vice President of SpartanNash Company from November 2000 to August 2016. He served as Treasurer of Spartan Stores Inc. He served as an Interim Chief Financial Officer of SpartanNash Company from March 1, 2015 to April 11, 2016. He was the Chief Financial Officer of SpartanNash Company from January 2000 until March 01, 2015. He also served as Vice President of Finance at SpartanNash Company from January 2000 to November 2000 and its Principal Accounting Officer until November 19, 2013. He oversaw information technology, real estate and finance. He joined SpartanNash Company after four years at Kmart Corporation overseeing all corporate accounting and reporting functions, as well as working on various special projects in systems implementation, process improvement and divestitures. From December 1998 to January 2000, Mr. Staples served as Divisional Vice President for Strategic Planning and Reporting at Kmart Corporation, where he was responsible for Planning and Analysis, Budgeting, Reporting and Corporate Accounting. He served as Divisional Vice President Accounting Operations at Kmart Corporation from June 1997 to December 1998. He has been a Director of SpartanNash Company since March 2, 2017. He is a Certified Public Accountant.

CEO Compensation
  • Dave's compensation has increased whilst company is loss making.
  • Dave's compensation is higher than average for a company of this size and profit level.
Management Team Tenure

Average tenure and age of the SpartanNash management team in years:

1.9
Average Tenure
55.5
Average Age
  • The average tenure for the SpartanNash management team is less than 2 years, this suggests a new team.
Management Team

Dave Staples

TITLE
Chief Executive Officer
COMPENSATION
$2M
AGE
54
TENURE
0.5 yrs

Kathy Mahoney

TITLE
President of MDV Military Division & Chief Legal Officer
COMPENSATION
$1M
AGE
62
TENURE
2 yrs

Mark Shamber

TITLE
Executive VP & CFO
AGE
48
TENURE
0.2 yrs

Tammy Hurley

TITLE
Chief Accounting Officer and Vice President of Finance
AGE
51
TENURE
1.3 yrs

Dave Couch

TITLE
Chief Information Officer and Vice President
COMPENSATION
$225K
AGE
66
TENURE
4 yrs

Meredith Gremel

TITLE
Vice President of Corporate Affairs & Communications

Larry Pierce

TITLE
Executive Vice President of Merchandising and Marketing
AGE
62
TENURE
3.3 yrs

Bill Jacobs

TITLE
Vice President of Treasury & Corporate Development
TENURE
0.7 yrs

Yvonne Trupiano

TITLE
Chief Human Resources Officer and Senior Vice President
AGE
38
TENURE
1.1 yrs

Ted Adornato

TITLE
Executive Vice President of Retail Operations
COMPENSATION
$920K
AGE
63
TENURE
4 yrs
Board of Directors Tenure

Average tenure and age of the SpartanNash board of directors in years:

7.4
Average Tenure
63
Average Age
  • The tenure for the SpartanNash board of directors is about average.
Board of Directors

Dennis Eidson

TITLE
Chairman
COMPENSATION
$5M
AGE
63
TENURE
1.4 yrs

Dave Staples

TITLE
Chief Executive Officer
COMPENSATION
$2M
AGE
54
TENURE
0.7 yrs

Yvonne Jackson

TITLE
Independent Director
COMPENSATION
$201K
AGE
67
TENURE
7.1 yrs

Michel Foret

TITLE
Independent Director
COMPENSATION
$203K
AGE
71
TENURE
4 yrs

Douglas Hacker

TITLE
Independent Director
COMPENSATION
$196K
AGE
62
TENURE
4 yrs

Tim O'Donovan

TITLE
Lead Independent Director
COMPENSATION
$206K
AGE
72

Beth Nickels

TITLE
Independent Director
COMPENSATION
$181K
AGE
55
TENURE
17.3 yrs

Margaret Atkins

TITLE
Independent Director
COMPENSATION
$188K
AGE
60
TENURE
14.3 yrs

Frank Gambino

TITLE
Independent Director
COMPENSATION
$181K
AGE
63
TENURE
14.3 yrs

William Voss

TITLE
Independent Director
COMPENSATION
$186K
AGE
63
TENURE
4 yrs
Recent Insider Trading
  • No 3 month insider trading information.
Who owns this company?
X
Management checks
We assess SpartanNash's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap and profit (greater than 0.5% of the company's profit + 0.03% of market cap)? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. SpartanNash has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

Company News

Company Info

Map
Description

SpartanNash Company distributes and retails grocery products. It operates in three segments: Food Distribution, Military, and Retail. The Food Distribution segment offers approximately 60,000 stock-keeping units, such as dry groceries, produce, dairy products, meat, delicatessen items, bakery goods, frozen food, seafood, floral products, general merchandise, beverages, tobacco products, pharmacy, and health and beauty care products to independent retail locations, food service distributors, and corporate-owned retail stores. This segment also offers value-added services to independent food distribution customers. The Military segment sells and distributes grocery products to military commissaries and exchanges located in 45 states across the United States and the District of Columbia, Europe, Puerto Rico, Cuba, Bahrain, and Egypt. The Retail segment operates retail stores in the Midwest and Great Lakes regions primarily under the banners of Family Fare Supermarkets, VG’s Food and Pharmacy, D&W Fresh Markets, Sun Mart, and Family Fresh Market; and fuel centers primarily at its retail stores under the banners of Family Fare Quick Stop, D&W Quick Stop, VG’s Quick Stop, Forest Hills Quick Stop, and Sun Mart Express Fuel. Its retail stores offer branded perishable food products, such as dry groceries, produce, dairy products, meat, delicatessen items, bakery goods, frozen food, seafood, floral products, general merchandise, beverages, tobacco products, health and beauty care products, and pharmacy services, as well as approximately 7,100 private brand items primarily under the Spartan and Our Family, Open Acres, Top Care, Tippy Toes, Full Circle, B-leve, PAWS Premium, and Valu Time names. As of December 31, 2016, this segment operated 157 retail stores; and 30 fuel centers. The company was formerly known as Spartan Stores, Inc. and changed its name to SpartanNash Company in May 2014. SpartanNash Company was founded in 1917 and is headquartered in Grand Rapids, Michigan.

Details
Name: SpartanNash Company
Ticker: SPTN
Exchange: NasdaqGS
Founded: 1917
Market Cap: $857,004,724
Shares outstanding: 36,971,731
Website: http://www.spartannash.com
Address: SpartanNash Company
850 76th Street, SW,
PO Box 8700,
Grand Rapids,
Michigan, 49518,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NasdaqGS SPTN Common Stock Nasdaq Global Select US USD 02. Aug 2000
DB SRJ Common Stock Deutsche Boerse AG DE EUR 02. Aug 2000
Number of employees
Current staff
Staff numbers
11,500
SpartanNash employees.
Industry
Industry: Food Distributors
Sector: Food and Staples Retailing