DB:2GCB

Stock Analysis Report

Grupo Comercial Chedraui. de

Executive Summary

Grupo Comercial Chedraui, S.A.B. de C.V. engages in the operation of self–service stores primarily in Mexico and the United States.

Rewards

Trading at 56.6% below its fair value

Earnings are forecast to grow 7.05% per year

Risk Analysis

Has a high level of debt

Unstable dividend track record



Snowflake Analysis

Undervalued second-rate dividend payer.


Similar Companies

Share Price & News

How has Grupo Comercial Chedraui. de's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 2GCB has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-3.8%

2GCB

0.2%

DE Consumer Retailing

0.3%

DE Market


1 Year Return

-24.4%

2GCB

0.6%

DE Consumer Retailing

13.8%

DE Market

Return vs Industry: 2GCB underperformed the German Consumer Retailing industry which returned 4.8% over the past year.

Return vs Market: 2GCB underperformed the German Market which returned 17.1% over the past year.


Shareholder returns

2GCBIndustryMarket
7 Day-3.8%0.2%0.3%
30 Day-6.6%-1.8%1.3%
90 Day0.3%0.5%5.2%
1 Year-23.6%-24.4%4.6%0.6%17.4%13.8%
3 Year-22.3%-24.5%2.7%-7.5%15.9%5.7%
5 Year-46.6%-48.7%14.5%-3.2%27.9%10.6%

Price Volatility Vs. Market

How volatile is Grupo Comercial Chedraui. de's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Grupo Comercial Chedraui. de undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 2GCB (€1.3) is trading below our estimate of fair value (€3)

Significantly Below Fair Value: 2GCB is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 2GCB is good value based on its PE Ratio (14.9x) compared to the Consumer Retailing industry average (19.2x).

PE vs Market: 2GCB is good value based on its PE Ratio (14.9x) compared to the German market (20.6x).


Price to Earnings Growth Ratio

PEG Ratio: 2GCB is poor value based on its PEG Ratio (2.1x)


Price to Book Ratio

PB vs Industry: 2GCB is good value based on its PB Ratio (1x) compared to the XE Consumer Retailing industry average (1.6x).


Next Steps

Future Growth

How is Grupo Comercial Chedraui. de forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

9.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2GCB's forecast earnings growth (7% per year) is above the savings rate (-0.4%).

Earnings vs Market: 2GCB's earnings (7% per year) are forecast to grow slower than the German market (13.2% per year).

High Growth Earnings: 2GCB's earnings are forecast to grow, but not significantly.

Revenue vs Market: 2GCB's revenue (5.8% per year) is forecast to grow faster than the German market (4.8% per year).

High Growth Revenue: 2GCB's revenue (5.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 2GCB's Return on Equity is forecast to be low in 3 years time (7.5%).


Next Steps

Past Performance

How has Grupo Comercial Chedraui. de performed over the past 5 years?

3.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 2GCB has high quality earnings.

Growing Profit Margin: 2GCB's current net profit margins (1.4%) are lower than last year (1.8%).


Past Earnings Growth Analysis

Earnings Trend: 2GCB's earnings have grown by 3.6% per year over the past 5 years.

Accelerating Growth: 2GCB's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 2GCB had negative earnings growth (-7.1%) over the past year, making it difficult to compare to the Consumer Retailing industry average (0.5%).


Return on Equity

High ROE: 2GCB's Return on Equity (6.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Grupo Comercial Chedraui. de's financial position?


Financial Position Analysis

Short Term Liabilities: 2GCB's short term assets (MX$18.9B) do not cover its short term liabilities (MX$24.6B).

Long Term Liabilities: 2GCB's short term assets (MX$18.9B) do not cover its long term liabilities (MX$37.4B).


Debt to Equity History and Analysis

Debt Level: 2GCB's debt to equity ratio (45.9%) is considered high.

Reducing Debt: 2GCB's debt to equity ratio has increased from 27.4% to 45.9% over the past 5 years.

Debt Coverage: 2GCB's debt is well covered by operating cash flow (26.3%).

Interest Coverage: 2GCB's interest payments on its debt are well covered by EBIT (4.3x coverage).


Balance Sheet

Inventory Level: 2GCB has a high level of physical assets or inventory.

Debt Coverage by Assets: 2GCB's debt is covered by short term assets (assets are 1.5x debt).


Next Steps

Dividend

What is Grupo Comercial Chedraui. de's current dividend yield, its reliability and sustainability?

1.59%

Current Dividend Yield


Dividend Yield vs Market

company1.6%marketbottom25%1.3%markettop25%3.6%industryaverage3.5%forecastin3Years1.2%

Current dividend yield vs market & industry

Notable Dividend: 2GCB's dividend (1.45%) is higher than the bottom 25% of dividend payers in the German market (1.38%).

High Dividend: 2GCB's dividend (1.45%) is low compared to the top 25% of dividend payers in the German market (3.53%).


Stability and Growth of Payments

Stable Dividend: 2GCB has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 2GCB's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (21.6%), 2GCB's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 2GCB's dividends in 3 years are forecast to be thoroughly covered by earnings (13.7% payout ratio).


Next Steps

Management

What is the CEO of Grupo Comercial Chedraui. de's salary, the management and board of directors tenure and is there insider trading?

2.3yrs

Average management tenure


CEO

José Antonio Chedraui Eguía (52yo)

25yrs

Tenure

0

Mr. José Antonio Chedraui Eguía has been the Chief Executive Officer of Grupo Comercial Chedraui, S.A.B. DE C.V since January 1995. Mr. Chedraui Eguía has been at Chedraui for 21 years. He served as Genera ...


Management Age and Tenure

2.3yrs

Average Tenure

55yo

Average Age

Experienced Management: 2GCB's management team is considered experienced (2.3 years average tenure).


Board Age and Tenure

12.0yrs

Average Tenure

59yo

Average Age

Experienced Board: 2GCB's board of directors are seasoned and experienced ( 12 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • José Antonio Chedraui Obeso (74yo)

    Co-Founder & Director

    • Alfredo Chedraui Obeso (72yo)

      Co-Founder & Chairman of the Board

      • José Antonio Chedraui Eguía (52yo)

        CEO & Director

        • Tenure: 25yrs
      • Rafael Contreras Grosskelwing (56yo)

        Chief Administrative & Financial Officer

        • José Ramón Chedraui Eguía (45yo)

          Director of Private Label & Bodega Latina and Secretary of the Board

          • Jesús Arturo Velázquez Díaz

            Head of Investor Relations

            • Alberto Gutiérrez (54yo)

              Director of Operations

              • Alma Deyanira Loeza Torres

                Deputy Legal Director

                • Humberto Tafolla Núñez

                  Chief Financial Officer

                  • Tenure: 2.3yrs
                • Sergio Estrada Rentería

                  Director of Human Resource

                  • Tenure: 1.8yrs

                Board Members

                • Federico Carlos Fernández Senderos (51yo)

                  Independent Director

                  • Tenure: 12yrs
                • Clemente Ismael Reyes-Retana Valdés (57yo)

                  Independent Director

                  • Tenure: 11yrs
                • José Antonio Chedraui Obeso (74yo)

                  Co-Founder & Director

                  • Alfredo Chedraui Obeso (72yo)

                    Co-Founder & Chairman of the Board

                    • Agustín Irurita Pérez (77yo)

                      Independent Director

                      • Tenure: 20yrs
                    • José Antonio Chedraui Eguía (52yo)

                      CEO & Director

                      • Tenure: 25yrs
                    • Julio Gutiérrez Mercadillo (59yo)

                      Independent Director

                      • Tenure: 7yrs
                    • Cecilia Goya Meade

                      Independent Director

                      • Martín Werner Wainfeld

                        Independent Director

                        Company Information

                        Grupo Comercial Chedraui, S.A.B. de C.V.'s company bio, employee growth, exchange listings and data sources


                        Key Information

                        • Name: Grupo Comercial Chedraui, S.A.B. de C.V.
                        • Ticker: 2GCB
                        • Exchange: DB
                        • Founded: 1920
                        • Industry: Food Retail
                        • Sector: Consumer Retailing
                        • Market Cap: Mex$24.385b
                        • Listing Market Cap: Mex$1.173b
                        • Shares outstanding: 955.16m
                        • Website: https://www.chedraui.com.mx

                        Number of Employees


                        Location

                        • Grupo Comercial Chedraui, S.A.B. de C.V.
                        • Avenida Constituyentes 1150
                        • Colonia Lomas Altas
                        • Mexico City
                        • Distrito Federal
                        • 11950
                        • Mexico

                        Listings

                        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
                        CHDRAUI BBMV (Bolsa Mexicana de Valores)YesSeries B SharesMXMXNMay 2010
                        GCHE.FOTCPK (Pink Sheets LLC)YesSeries B SharesUSUSDMay 2010
                        2GCBDB (Deutsche Boerse AG)YesSeries B SharesDEEURMay 2010

                        Biography

                        Grupo Comercial Chedraui, S.A.B. de C.V. engages in the operation of self–service stores primarily in Mexico and the United States. It operates through three segments: Retail in Mexico, Retail in the United States, and Real Estate. The company also sells electronic goods, perishables, cloths, groceries, and general merchandise. In addition, it leases commercial space to third parties; and operates shopping centers. The company operates 297 stores, including 193 tiendas chedraui, 62 super chedraui, 11 super che, and 31 supercito stores; and 7 distribution centers. It also operates a chain of 125 self-service stores under the El Super brand, which include 6 stores in Arizona, 52 stores in California, 3 in Nevada, 1 in New Mexico, and 63 in Texas; and 1 distribution center. The company was founded in 1920 and is headquartered in Mexico City, Mexico. 


                        Company Analysis and Financial Data Status

                        All financial data provided by Standard & Poor's Capital IQ.
                        DataLast Updated (UTC time)
                        Company Analysis2020/01/26 22:02
                        End of Day Share Price2020/01/24 00:00
                        Earnings2019/09/30
                        Annual Earnings2018/12/31


                        Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.