NYSE:KR

Stock Analysis Report

Executive Summary

The Kroger Co. operates as a retailer in the United States.


Snowflake Analysis

Established dividend payer and good value.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

7.4%

KR

0.6%

US Consumer Retailing

-1.0%

US Market


1 Year Return

6.3%

KR

17.5%

US Consumer Retailing

18.0%

US Market

Return vs Industry: KR underperformed the US Consumer Retailing industry which returned 17.5% over the past year.

Return vs Market: KR underperformed the US Market which returned 18% over the past year.


Shareholder returns

KRIndustryMarket
7 Day7.4%0.6%-1.0%
30 Day6.6%1.3%0.6%
90 Day12.1%0.4%7.9%
1 Year8.9%6.3%19.8%17.5%20.4%18.0%
3 Year-3.1%-9.0%47.5%37.9%48.0%38.5%
5 Year-7.0%-14.8%48.6%33.1%72.2%53.3%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Kroger undervalued compared to its fair value and its price relative to the market?

46.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: KR ($30.31) is trading below our estimate of fair value ($56.66)

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


Price To Earnings Ratio

PE vs Industry: KR is good value based on its PE Ratio (15.4x) compared to the Consumer Retailing industry average (22.2x).

PE vs Market: KR is good value based on its PE Ratio (15.4x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: KR is poor value based on its PEG Ratio (6.2x)


Price to Book Ratio

PB vs Industry: KR is overvalued based on its PB Ratio (2.7x) compared to the US Consumer Retailing industry average (2.1x).


Next Steps

Future Growth

How is Kroger forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?

2.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KR's forecast earnings growth (2.5% per year) is above the savings rate (1.7%).

Earnings vs Market: KR's earnings (2.5% per year) are forecast to grow slower than the US market (14.2% per year).

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

Revenue vs Market: KR's revenue (2.3% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: KR's revenue (2.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: KR's Return on Equity is forecast to be low in 3 years time (18.6%).


Next Steps

Past Performance

How has Kroger performed over the past 5 years?

7.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: KR has high quality earnings.

Growing Profit Margin: KR's current net profit margins (1.3%) are lower than last year (2.9%).


Past Earnings Growth Analysis

Earnings Trend: KR's earnings have grown by 7.3% per year over the past 5 years.

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

Earnings vs Industry: KR had negative earnings growth (-57.1%) over the past year, making it difficult to compare to the Consumer Retailing industry average (-6%).


Return on Equity

High ROE: KR's Return on Equity (16.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Kroger's financial position?


Financial Position Analysis

Short Term Liabilities: KR's short term assets ($11.0B) do not cover its short term liabilities ($14.1B).

Long Term Liabilities: KR's short term assets ($11.0B) do not cover its long term liabilities ($22.5B).


Debt to Equity History and Analysis

Debt Level: KR's debt to equity ratio (145.3%) is considered high.

Reducing Debt: KR's debt to equity ratio has reduced from 205.2% to 145.3% over the past 5 years.

Debt Coverage: KR's debt is well covered by operating cash flow (35.3%).

Interest Coverage: KR's interest payments on its debt are well covered by EBIT (4.1x coverage).


Balance Sheet

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

Debt Coverage by Assets: KR's debt is not covered by short term assets (assets are 0.9x debt).


Next Steps

Dividend

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

2.11%

Current Dividend Yield


Dividend Yield vs Market

company2.1%marketbottom25%1.4%markettop25%3.7%industryaverage1.8%forecastin3Years2.2%

Current dividend yield vs market & industry

Notable Dividend: KR's dividend (2.11%) is higher than the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: KR's dividend (2.11%) is low compared to the top 25% of dividend payers in the US market (3.73%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (30.5%), KR's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: KR's dividends in 3 years are forecast to be well covered by earnings (27.7% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.5yrs

Average management tenure


CEO

William McMullen (58yo)

6.1yrs

Tenure

US$12,037,872

Compensation

Mr. William Rodney McMullen has been Independent Director of Cincinnati Financial Corporation since 2001 and The Cincinnati Life Insurance Company. Mr. McMullen has worked with The Kroger Co’s Board on bus ...


CEO Compensation Analysis

Compensation vs Market: William's total compensation ($USD12.04M) is about average for companies of similar size in the US market ($USD10.79M).

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


Leadership Team

NamePositionTenureCompensationOwnership
William McMullen
Chairman & CEO6.1yrsUS$12.04m0.35% $83.8m
Michael Donnelly
Executive VP & COO2.2yrsUS$5.69m0.038% $9.0m
Robert Clark
Senior Vice President of Supply Chain3.9yrsUS$4.77m0.023% $5.4m
Gary Millerchip
Senior VP & CFO0.8yrsno data0.018% $4.2m
Todd Foley
VP, Corporate Controller & Chief Accounting Officer2.8yrsno data0.0039% $922.7k
Yael Cosset
Senior VP & Chief Information Officer0.8yrsno data0.015% $3.5m
Rebekah Manis
Director of Investor Relations1.9yrsno datano data
Christine Wheatley
Group VP5.8yrsno data0.014% $3.4m
Kristal Howard
Head of Corporate Communications & Media Relations2.8yrsno datano data
Gil Phipps
Vice President of Branding1.5yrsno datano data

2.5yrs

Average Tenure

51yo

Average Age

Experienced Management: KR's management team is considered experienced (2.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
William McMullen
Chairman & CEO6.1yrsUS$12.04m0.35% $83.8m
Ronald Sargent
Lead Director0yrsUS$316.06k0.013% $3.0m
Jorge Montoya
Independent Director12.9yrsUS$278.27k0.0086% $2.1m
Susan Kropf
Independent Director12.2yrsUS$263.31k0.012% $2.9m
Bobby Shackouls
Independent Director21.1yrsUS$273.28k0.0062% $1.5m
Clyde Moore
Independent Director23.1yrsUS$293.57k0.014% $3.4m
James Runde
Independent Director13.4yrsUS$278.27k0.017% $4.1m
Mark Sutton
Independent Director3.1yrsUS$273.28k0.0022% $526.9k
Anne Gates
Independent Director4.2yrsUS$288.02k0.0026% $627.0k
Nora Aufreiter
Independent Director5.2yrsUS$263.31k0.0031% $734.3k

12.2yrs

Average Tenure

64yo

Average Age

Experienced Board: KR's board of directors are seasoned and experienced ( 12.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

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


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

The Kroger Co.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Kroger Co.
  • Ticker: KR
  • Exchange: NYSE
  • Founded: 1883
  • Industry: Food Retail
  • Sector: Consumer Retailing
  • Market Cap: US$23.841b
  • Shares outstanding: 800.59m
  • Website: https://www.thekrogerco.com

Number of Employees


Location

  • The Kroger Co.
  • 1014 Vine Street
  • Cincinnati
  • Ohio
  • 45202
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
KRNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
KOGDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
KR *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
0JS2LSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
KOGETLX (Eurotlx)YesCommon StockITEURJan 1968
K1RC34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COMBRBRLDec 2019

Biography

The Kroger Co. operates as a retailer in the United States. The company operates supermarkets, multi-department stores, marketplace stores, and price impact warehouse stores. Its combination food and drug stores offer natural food and organic sections, pharmacies, general merchandise, pet centers, fresh seafood, and organic produce; and multi-department stores provide apparel, home fashion and furnishings, outdoor living, electronics, automotive products, and toys. The company’s marketplace stores offer full-service grocery, pharmacy, health and beauty care departments, and perishable goods, as well as general merchandise, including apparel, home goods, and toys; and price impact warehouse stores provides grocery, and health and beauty care items, as well as meat, dairy, baked goods, and fresh produce items. It also manufactures and processes food products for sale in its supermarkets; and sells fuel through 1,537 fuel centers. As of September 25, 2019, the company operated 2,759 retail food stores under various banner names, as well as an online retail store. The Kroger Co. was founded in 1883 and is based in Cincinnati, Ohio. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/22 00:40
End of Day Share Price2020/02/21 00:00
Earnings2019/11/09
Annual Earnings2019/02/02


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.