DB:TQK

Stock Analysis Report

Executive Summary

The Wendy's Company, together its subsidiaries, operates as a quick-service restaurant company.

Rewards

Earnings are forecast to grow 14% per year

Pays a high and reliable dividend of 2.25%

Risk Analysis

Interest payments are not well covered by earnings

Profit margins (9.6%) are lower than last year (47.5%)



Snowflake Analysis

Established dividend payer with moderate growth potential.


Similar Companies

Share Price & News

How has Wendy's's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

2.1%

TQK

-4.0%

DE Hospitality

0.5%

DE Market


1 Year Return

32.7%

TQK

-22.8%

DE Hospitality

15.5%

DE Market

Return vs Industry: TQK exceeded the German Hospitality industry which returned -15.8% over the past year.

Return vs Market: TQK exceeded the German Market which returned 17.1% over the past year.


Shareholder returns

TQKIndustryMarket
7 Day2.1%-4.0%0.5%
30 Day-1.5%-8.3%1.4%
90 Day3.1%-12.4%5.3%
1 Year35.6%32.7%-17.7%-22.8%19.2%15.5%
3 Yearn/a-14.2%-25.7%15.7%5.5%
5 Yearn/a-13.2%-29.9%27.3%10.1%

Price Volatility Vs. Market

How volatile is Wendy's's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Wendy's undervalued compared to its fair value and its price relative to the market?

39.43x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: TQK (€19.7) is trading above our estimate of fair value (€15.42)

Significantly Below Fair Value: TQK is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: TQK is poor value based on its PE Ratio (38.3x) compared to the Hospitality industry average (20.5x).

PE vs Market: TQK is poor value based on its PE Ratio (38.3x) compared to the German market (20.6x).


Price to Earnings Growth Ratio

PEG Ratio: TQK is poor value based on its PEG Ratio (2.7x)


Price to Book Ratio

PB vs Industry: TQK is overvalued based on its PB Ratio (7.6x) compared to the DE Hospitality industry average (2.3x).


Next Steps

Future Growth

How is Wendy's forecast to perform in the next 1 to 3 years based on estimates from 24 analysts?

14.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TQK's forecast earnings growth (14% per year) is above the savings rate (-0.4%).

Earnings vs Market: TQK's earnings (14% per year) are forecast to grow faster than the German market (13.2% per year).

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

Revenue vs Market: TQK's revenue (4.7% per year) is forecast to grow slower than the German market (4.8% per year).

High Growth Revenue: TQK's revenue (4.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TQK's Return on Equity is forecast to be high in 3 years time (37.3%)


Next Steps

Past Performance

How has Wendy's performed over the past 5 years?

31.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TQK has high quality earnings.

Growing Profit Margin: TQK's current net profit margins (9.6%) are lower than last year (47.5%).


Past Earnings Growth Analysis

Earnings Trend: TQK's earnings have grown significantly by 31.9% per year over the past 5 years.

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

Earnings vs Industry: TQK had negative earnings growth (-78.3%) over the past year, making it difficult to compare to the Hospitality industry average (-39.6%).


Return on Equity

High ROE: TQK's Return on Equity (19.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Wendy's's financial position?


Financial Position Analysis

Short Term Liabilities: TQK's short term assets ($673.8M) exceed its short term liabilities ($337.4M).

Long Term Liabilities: TQK's short term assets ($673.8M) do not cover its long term liabilities ($4.1B).


Debt to Equity History and Analysis

Debt Level: TQK's debt to equity ratio (353.1%) is considered high.

Reducing Debt: TQK's debt to equity ratio has increased from 83.8% to 353.1% over the past 5 years.

Debt Coverage: TQK's debt is not well covered by operating cash flow (10.1%).

Interest Coverage: TQK's interest payments on its debt are not well covered by EBIT (2.3x coverage).


Balance Sheet

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

Debt Coverage by Assets: TQK's debt is not covered by short term assets (assets are 0.3x debt).


Next Steps

Dividend

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

2.18%

Current Dividend Yield


Dividend Yield vs Market

company2.2%marketbottom25%1.4%markettop25%3.5%industryaverage5.5%forecastin3Years2.2%

Current dividend yield vs market & industry

Notable Dividend: TQK's dividend (2.25%) is higher than the bottom 25% of dividend payers in the German market (1.38%).

High Dividend: TQK's dividend (2.25%) is low compared to the top 25% of dividend payers in the German market (3.53%).


Stability and Growth of Payments

Stable Dividend: TQK's dividends per share have been stable in the past 10 years.

Growing Dividend: TQK's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (69%), TQK's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TQK's dividends in 3 years are forecast to be covered by earnings (60.8% payout ratio).


Next Steps

Management

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

3.7yrs

Average management tenure


CEO

Todd Penegor (54yo)

3.7yrs

Tenure

US$5,620,867

Compensation

Mr. Todd Allan Penegor has been the President of The Wendy's Company since January 4, 2016 and has been its Chief Executive Officer since May 26, 2016. Mr. Penegor has been Chief Financial Officer and Seni ...


CEO Compensation Analysis

Compensation vs Market: Todd's total compensation ($USD5.62M) is above average for companies of similar size in the German market ($USD3.59M).

Compensation vs Earnings: Todd's compensation has been consistent with company performance over the past year.


Management Age and Tenure

3.7yrs

Average Tenure

47.5yo

Average Age

Experienced Management: TQK's management team is considered experienced (3.7 years average tenure).


Board Age and Tenure

4.5yrs

Average Tenure

65.5yo

Average Age

Experienced Board: TQK's board of directors are considered experienced (4.5 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.


Recent Insider Transactions

Sell€35,989,38616 Aug 19
Trian Fund Management, L.P.
EntityCompany
Shares2,000,000
Max Price€18.01
Sell€2,110,34614 May 19
Robert Wright
EntityIndividual
Shares126,629
Max Price€16.67
Sell€45,355,18807 Mar 19
Trian Fund Management, L.P.
EntityCompany
Shares3,000,000
Max Price€15.12
Sell€136,42306 Mar 19
Abigail Pringle
EntityIndividual
Role
Senior Key Executive
President of International & Chief Development Officer
Shares8,897
Max Price€15.33

Ownership Breakdown

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


Management Team

  • Liliana Esposito (44yo)

    Chief Communications Officer

    • Tenure: 5.6yrs
  • E. Wunsch (48yo)

    Chief Legal Officer & Secretary

    • Tenure: 3.3yrs
    • Compensation: US$1.48m
  • Todd Penegor (54yo)

    President

    • Tenure: 3.7yrs
    • Compensation: US$5.62m
  • Kurt Kane (47yo)

    President of U.S. & Chief Commercial Officer

    • Tenure: 4.7yrs
    • Compensation: US$1.66m
  • Dana Klein

    Senior VP - Corporate & Securities Counsel and Assistant Secretary

    • Abigail Pringle (45yo)

      President of International & Chief Development Officer

      • Tenure: 1.3yrs
      • Compensation: US$1.43m
    • Gunther Plosch (50yo)

      Chief Financial Officer

      • Tenure: 3.7yrs
      • Compensation: US$1.93m
    • Leigh Burnside (49yo)

      Senior VP of Finance & Chief Accounting Officer

      • Tenure: 2.4yrs
    • Matthew O’Brien (45yo)

      Chief People Officer

      • Tenure: 6.4yrs
    • Greg Lemenchick

      Director of Investor Relations


      Board Members

      • Nelson Peltz (76yo)

        Non Executive Chairman

        • Tenure: 12.6yrs
        • Compensation: US$684.49k
      • Peter May (76yo)

        Non-Executive Vice Chairman

        • Tenure: 12.6yrs
        • Compensation: US$220.21k
      • Joseph Levato (78yo)

        Independent Director

        • Tenure: 23.6yrs
        • Compensation: US$215.00k
      • Art Winkleblack (62yo)

        Independent Director

        • Tenure: 3.7yrs
        • Compensation: US$219.50k
      • Dennis Kass (68yo)

        Independent Director

        • Tenure: 4.1yrs
        • Compensation: US$207.00k
      • Ken Gilbert (68yo)

        Independent Director

        • Tenure: 2.7yrs
        • Compensation: US$200.53k
      • Peter Rothschild (63yo)

        Independent Director

        • Tenure: 9.7yrs
        • Compensation: US$235.00k
      • Todd Penegor (54yo)

        President

        • Tenure: 3.7yrs
        • Compensation: US$5.62m
      • Matthew Peltz (36yo)

        Director

        • Tenure: 4.1yrs
        • Compensation: US$202.53k
      • Mich Mathews-Spradlin (52yo)

        Independent Director

        • Tenure: 4.9yrs
        • Compensation: US$207.03k

      Company Information

      The Wendy's Company's company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: The Wendy's Company
      • Ticker: TQK
      • Exchange: DB
      • Founded: 1969
      • Industry: Restaurants
      • Sector: Consumer Services
      • Market Cap: US$5.059b
      • Listing Market Cap: US$4.582b
      • Shares outstanding: 230.05m
      • Website: https://www.wendys.com

      Number of Employees


      Location

      • The Wendy's Company
      • One Dave Thomas Boulevard
      • Dublin
      • Ohio
      • 43017
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      WENNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDMar 1964
      TQKDB (Deutsche Boerse AG)YesCommon StockDEEURMar 1964

      Biography

      The Wendy's Company, together its subsidiaries, operates as a quick-service restaurant company. The company is involved in operating, developing, and franchising a system of quick-service restaurants specializing in hamburger sandwiches. As of December 30, 2018, its restaurant system included 6,711 franchise restaurants, which comprise 353 owned and operated restaurants worldwide. The company was formerly known as Wendy's/Arby's Group, Inc. and changed its name to The Wendy’s Company in July 2011. The Wendy's Company was founded in 1969 and is based in Dublin, Ohio. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/23 21:58
      End of Day Share Price2020/01/23 00:00
      Earnings2019/09/29
      Annual Earnings2018/12/30


      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.