NYSE:ARMK

Stock Analysis Report

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Executive Summary

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


Snowflake Analysis

Moderate growth potential 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

Stable Share Price: ARMK's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-3.3%

ARMK

-2.4%

US Hospitality

-0.7%

US Market


1 Year Return

-40.4%

ARMK

-29.0%

US Hospitality

5.3%

US Market

Return vs Industry: ARMK underperformed the US Hospitality industry which returned -28.1% over the past year.

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


Shareholder returns

ARMKIndustryMarket
7 Day-3.3%-2.4%-0.7%
30 Day-14.5%-5.5%4.6%
90 Day-3.5%18.9%14.0%
1 Year-39.6%-40.4%-27.5%-29.0%7.6%5.3%
3 Year-44.9%-46.8%-18.4%-23.7%34.9%26.1%
5 Year-28.4%-32.5%-1.4%-12.0%62.3%44.7%

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?

48.08x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ARMK ($21.64) is trading above our estimate of fair value ($16.64)

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


Price To Earnings Ratio

PE vs Industry: ARMK is poor value based on its PE Ratio (48.1x) compared to the US Hospitality industry average (20.5x).

PE vs Market: ARMK is poor value based on its PE Ratio (48.1x) compared to the US market (16.2x).


Price to Earnings Growth Ratio

PEG Ratio: ARMK is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: ARMK's PB Ratio (1.7x) is in line with the US Hospitality industry average.


Next Steps

Future Growth

How is Aramark forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

87.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ARMK's forecast earnings growth (87.8% per year) is above the savings rate (2.2%).

Earnings vs Market: ARMK's earnings (87.8% per year) are forecast to grow faster than the US market (22.9% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: ARMK's revenue (6.2% per year) is forecast to grow slower than the US market (9.4% per year).

High Growth Revenue: ARMK's revenue (6.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ARMK's Return on Equity is forecast to be low in 3 years time (14.5%).


Next Steps

Past Performance

How has Aramark performed over the past 5 years?

12.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ARMK has a large one-off loss of $219.6M impacting its March 27 2020 financial results.

Growing Profit Margin: ARMK's current net profit margins (0.7%) are lower than last year (3.3%).


Past Earnings Growth Analysis

Earnings Trend: ARMK's earnings have grown by 12.5% per year over the past 5 years.

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

Earnings vs Industry: ARMK had negative earnings growth (-78.8%) over the past year, making it difficult to compare to the Hospitality industry average (-30.8%).


Return on Equity

High ROE: ARMK's Return on Equity (3.5%) is considered low.


Next Steps

Financial Health

How is Aramark's financial position?


Financial Position Analysis

Short Term Liabilities: ARMK's short term assets ($3.7B) exceed its short term liabilities ($2.3B).

Long Term Liabilities: ARMK's short term assets ($3.7B) do not cover its long term liabilities ($9.4B).


Debt to Equity History and Analysis

Debt Level: ARMK's debt to equity ratio (249.7%) is considered high.

Reducing Debt: ARMK's debt to equity ratio has reduced from 306.7% to 249.7% over the past 5 years.

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

Interest Coverage: ARMK's interest payments on its debt are not well covered by EBIT (2.4x coverage).


Balance Sheet


Next Steps

Dividend

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

2.03%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: ARMK's dividend (2.03%) is higher than the bottom 25% of dividend payers in the US market (1.68%).

High Dividend: ARMK's dividend (2.03%) is low compared to the top 25% of dividend payers in the US market (4.6%).


Stability and Growth of Payments

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 high payout ratio (97.8%), ARMK's dividend payments are not 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 (20.5% payout ratio).


Next Steps

Management

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

5.5yrs

Average management tenure


CEO

John Zillmer (65yo)

0.75

Tenure

Mr. John J. Zillmer serves as an Industrial Advisor at CVC Capital Partners Limited. He served as an Advisor at the firm since 2014. He specializes in Chemical Distribution, Waste Management, Concessions  ...


Leadership Team

NamePositionTenureCompensationOwnership
Lauren Harrington
Senior VP & General Counsel1.33yrsUS$2.08m0.0050% $273.9k
Lynn McKee
Executive Vice President of Human Resources16.17yrsUS$2.92m0.15% $8.0m
Keith Bethel
Chief Growth Officerno dataUS$2.41m0.013% $715.6k
John Zillmer
CEO & Director0.75yrno data0.092% $5.0m
Thomas Ondrof
Executive VP & CFO0.50yrno data0.0073% $400.2k
Carl Mittleman
Chief Operating Officer of International0.42yrno datano data
Felise Kissell
Investor Relations & Corporate Affairs Executiveno datano datano data
Danna Vetter
Chief Marketerno datano datano data
Joseph Munnelly
Chief Accounting Officer (Leave of Absence)12.83yrsUS$2.00mno data
David Ballarini
Senior Vice President11.83yrsno datano data
Marc Bruno
Chief Operating Officer of U.S. Food & Facilities5.5yrsno data0.046% $2.5m
Brad Drummond
Chief Operating Officer of Uniform & Refreshment Services5.5yrsno datano data

5.5yrs

Average Tenure

56yo

Average Age

Experienced Management: ARMK's management team is seasoned and experienced (5.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
John Zillmer
CEO & Director0.75yrno data0.092% $5.0m
Stephen Sadove
Non-Executive Independent Chairman0.92yrUS$328.64k0.0073% $400.2k
Richard Dreiling
Independent Director4.42yrsUS$260.00kno data
Calvin Darden
Independent Director2.5yrsUS$260.15k0.0048% $261.9k
Daniel Heinrich
Independent Director6.67yrsUS$292.73k0.0015% $80.9k
Susan Cameron
Independent Director0.75yrno data0.0017% $94.0k
Arthur Winkleblack
Independent Director0.75yrno data0.0017% $94.0k
Irene Esteves
Independent Director5.42yrsUS$280.00kno data
Greg Creed
Independent Director0.50yrno data0.0049% $270.1k
Karen King
Independent Director0.75yrno data0.0020% $110.4k
Paul Hilal
Independent Vice Chairman of the Board0.75yrno datano data

0.8yrs

Average Tenure

64yo

Average Age

Experienced Board: ARMK's board of directors are not considered experienced ( 0.8 years average tenure), which suggests a new board.


Ownership

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


Insider Trading Volume

Insider Buying: ARMK insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.5%.


Top Shareholders

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$5.467b
  • Shares outstanding: 252.62m
  • 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
ARMK *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNDec 2013

Biography

Aramark provides food, facilities, and uniform services to education, healthcare, business and industry, sports, leisure, and corrections clients in North America and internationally. It operates through three segments: Food and Support Services United States, Food and Support Services International, and Uniform and Career Apparel. The company offers managed services, including dining, catering, food service management, and convenience-oriented retail operations; non-clinical support services, such as patient food and nutrition, retail food, and procurement services; and plant operations and maintenance, custodial/housekeeping, energy management, grounds keeping, and capital project management services. It also provides on-site restaurants, catering, convenience stores, and executive dining services; beverage and vending services; and facility management services comprising landscaping, transportation, payment, and other facility consulting services relating to building operations. In addition, the company offers concessions, banquet, and catering services; retail services and merchandise sale, recreational, and lodging services; and facility management services at sports, entertainment, and recreational facilities. Further, the company offers correctional food, and food and facilities management services for parks; and operates commissaries, laundry facilities, and property rooms. Additionally, it provides design, sourcing and manufacturing, delivery, cleaning, maintenance, and marketing services for uniforms and accessories; provides managed restroom services; and rents uniforms, work clothing, outerwear, particulate-free garments, and non-garment items and related services that include mats, shop towels, and first aid supplies. The company was formerly known as ARAMARK Holdings Corporation and changed its name to Aramark in May 2014. Aramark was founded in 1959 and is based in Philadelphia, Pennsylvania. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/13 23:53
End of Day Share Price2020/07/13 00:00
Earnings2020/03/27
Annual Earnings2019/09/27


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.