NYSE:ARMK

Stock Analysis Report

Executive Summary

Aramark provides food, facilities management, and uniform services to education, healthcare, business and industry, sports, leisure, and corrections clients in North America and internationally.

Snowflake

Fundamentals

Acceptable track record with imperfect balance sheet.


Similar Companies

Share Price & News

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


Latest Share Price and Events


Market Performance


7 Day Return

2.9%

ARMK

2.0%

US Hospitality

1.0%

US Market


1 Year Return

7.2%

ARMK

3.5%

US Hospitality

6.7%

US Market

Return vs Industry: ARMK exceeded the US Hospitality industry which returned 3.5% over the past year.

Return vs Market: ARMK exceeded the US Market which returned 6.7% over the past year.


Shareholder returns

ARMKIndustryMarket
7 Day2.9%2.0%1.0%
30 Day2.9%-5.5%-1.8%
90 Day22.6%-6.1%-1.8%
1 Year8.6%7.2%6.0%3.5%9.1%6.7%
3 Year23.2%19.0%44.0%34.6%46.1%36.6%
5 Year76.2%66.4%42.7%26.9%66.9%48.6%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

20.11x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Undervalued: ARMK ($43.92) is trading above our estimate of fair value ($42.55)

Significantly Undervalued: ARMK is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: ARMK is good value based on its PE Ratio (20.1x) compared to the Hospitality industry average (23x).

PE vs Market: ARMK is poor value based on its PE Ratio (20.1x) compared to the US market (17.5x).


Price to Earnings Growth Ratio

Low PEG Ratio: ARMK is poor value based on its PEG Ratio (2.4x)


Price to Book Ratio

PB vs Industry: ARMK is overvalued based on its PB Ratio (3.3x) compared to the US Hospitality industry average (2.1x).


Next Steps

Future Growth

How is Aramark forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

8.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ARMK's forecast earnings growth (8.5% per year) is above the savings rate (2.7%).

Earnings vs Market: ARMK's earnings (8.5% per year) are forecast to grow slower than the US market (14.5% per year).

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

Revenue vs Market: ARMK's revenue (3.1% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: ARMK's revenue (3.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: ARMK's Return on Equity is forecast to be low in 3 years time (16%).


Next Steps

Past Performance

How has Aramark performed over the past 5 years?

25.7%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: ARMK's earnings have grown significantly by 25.7% per year over the past 5 years.

Accelerating Growth: ARMK's earnings growth over the past year (6.5%) is below its 5-year average (25.7% per year).

Earnings vs Industry: ARMK earnings growth over the past year (6.5%) exceeded the Hospitality industry -13.9%.


Return on Equity

High ROE: ARMK's Return on Equity (16.3%) is considered low.


Return on Assets

ROA vs Industry: ARMK has a higher Return on Assets than the Hospitality industry average last year.


Return on Capital Employed

ROCE Improving: ARMK's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Aramark's financial position?


Financial Position Analysis

Short Term Liabilities: ARMK's short term assets ($2.6B) exceeds its short term liabilities ($2.2B)

Long Term Liabilities: ARMK's short term assets (2.6B) do not cover its long term liabilities (8.3B)


Debt to Equity History and Analysis

Debt Level: ARMK's debt to equity ratio (216.8%) is considered high

Reducing Debt: ARMK's debt to equity ratio has reduced from 328.5% to 216.8% over the past 5 years.

Debt Coverage: ARMK's debt is not well covered by operating cash flow (15.5%).

Interest Coverage: ARMK's interest payments on its debt are not well covered by EBIT (2.6x coverage).


Balance Sheet

Inventory Level: ARMK has a low level of unsold assets or inventory.

Debt Coverage by Assets: ARMK's debt is not covered by short term assets (assets are 0.4x debt).


Next Steps

Dividend

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

1.00%

Current Dividend Yield


Dividend Yield vs Market

company1.0%marketbottom25%1.5%markettop25%3.8%industryaverage2.9%forecastin3Years1.2%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: ARMK's dividend (1%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.46%).

High Dividend: ARMK's dividend (1%) is low compared to the top 25% of dividend payers in the US market (3.77%).

Stable Dividend: Whilst dividend payments have been stable, ARMK has been paying a dividend for less than 10 years.

Growing Dividend: ARMK's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (20.1%), ARMK's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ARMK's dividends in 3 years are forecast to be well covered by earnings (19% payout ratio).


Next Steps

Management

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

7.1yrs

Average management tenure


CEO

John Zillmer (64yo)

0yrs

Tenure

0

Mr. John J. Zillmer serves as Chief Executive Officer and Director at Aramark since October 7, 2019. He serves as an Adviser of CVC Capital Partners Limited. Mr. Zillmer served as the Executive Chairman of ...


Management Age and Tenure

7.1yrs

Average Tenure

52yo

Average Age

Experienced Management: ARMK's management team is seasoned and experienced (7.1 years average tenure).


Board Age and Tenure

3.7yrs

Average Tenure

63yo

Average Age

Experienced Board: ARMK's board of directors are considered experienced (3.7 years average tenure).


Insider Trading

Insider Buying: ARMK insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$280,52716 Aug 19
Keith Bethel
EntityIndividual
Shares7,500
Max PriceUS$37.40
BuyUS$99,86514 Feb 19
Stephen Bramlage
EntityIndividual
Role
Chief Financial Officer
Executive VP
Shares3,195
Max PriceUS$31.26
BuyUS$196,32014 Dec 18
Stephen Sadove
EntityIndividual
Role
Chairman of the Board
Non-Executive Chairman & Lead Independent Director
Shares6,000
Max PriceUS$32.72
BuyUS$3,004,18313 Dec 18
Eric Foss
EntityIndividual
Shares92,564
Max PriceUS$32.46

Ownership Breakdown


Management Team

  • David Ballarini

    Senior Vice President

    • Tenure: 11.1yrs
  • John Zillmer (64yo)

    CEO & Director

    • Tenure: 0yrs
  • Felise Kissell

    Vice President of Investor Relations & Corporate Affairs

    • Tenure: 0yrs
  • Lynn McKee (64yo)

    Executive Vice President of Human Resources

    • Tenure: 15.4yrs
    • Compensation: US$2.91m
  • Joe Munnelly (55yo)

    Chief Accounting Officer (Leave of Absence)

    • Tenure: 12.1yrs
    • Compensation: US$2.00m
  • Brent Franks

    Chief Operating Officer of International

    • Tenure: 7.1yrs
  • Steve Bramlage (49yo)

    Executive VP

    • Tenure: 4.5yrs
    • Compensation: US$3.39m
  • Danna Vetter

    Chief Marketer

    • Tenure: 0yrs
  • Marc Bruno (47yo)

    Chief Operating Officer of Sports

    • Tenure: 4.8yrs
  • Lauren Harrington (43yo)

    Senior VP & General Counsel

    • Tenure: 0.6yrs

Board Members

  • Steve Sadove (67yo)

    Non-Executive Chairman & Lead Independent Director

    • Tenure: 0.2yrs
    • Compensation: US$300.66k
  • Rick Dreiling (66yo)

    Independent Director

    • Tenure: 3.7yrs
    • Compensation: US$260.01k
  • Calvin Darden (69yo)

    Independent Director

    • Tenure: 1.8yrs
    • Compensation: US$226.24k
  • Dan Heinrich (63yo)

    Independent Director

    • Tenure: 5.9yrs
    • Compensation: US$300.66k
  • Ivey Cameron (60yo)

    Independent Director

    • Tenure: 0yrs
  • John Zillmer (64yo)

    CEO & Director

    • Tenure: 0yrs
  • Art Winkleblack (62yo)

    Independent Director

    • Tenure: 0yrs
  • Irene Esteves (60yo)

    Independent Director

    • Tenure: 4.7yrs
    • Compensation: US$290.01k
  • Karen King (63yo)

    Independent Director

    • Tenure: 0yrs
  • Paul Hilal (52yo)

    Vice Chairman of the Board

    • Tenure: 0yrs

Company Information

Aramark's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Aramark
  • Ticker: ARMK
  • Exchange: NYSE
  • Founded: 1959
  • Industry: Restaurants
  • Sector: Consumer Services
  • Market Cap: US$10.844b
  • Shares outstanding: 246.91m
  • Website: https://www.aramark.com

Number of Employees


Location

  • Aramark
  • 2400 Market Street
  • Philadelphia
  • Pennsylvania
  • 19103
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ARMKNYSE (New York Stock Exchange)YesCommon StockUSUSDDec 2013
0AKDB (Deutsche Boerse AG)YesCommon StockDEEURDec 2013
0HHBLSE (London Stock Exchange)YesCommon StockGBUSDDec 2013

Biography

Aramark provides food, facilities management, and uniform services to education, healthcare, business and industry, sports, leisure, and corrections clients in North America and internationally. It operate ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/15 00:14
End of Day Share Price2019/10/14 00:00
Earnings2019/06/28
Annual Earnings2018/09/28


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.