Kroger (NYSE:KR) is a large cap company that operates within the food and staples retailing industry. Its market cap is $20 billion today, and the total one-year return is -32.44% for shareholders.
Kroger stock is underperforming the market. It's beaten down, but it reports earnings soon. So is it a good time to buy? To answer this question, we've turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.
Our system looks at six key metrics...
✗ Earnings-per-Share (EPS) Growth: Kroger reported a recent EPS growth rate of -54.17%. That's below the food and staples retailing industry average of 37.84%. That's not a good sign. We like to see companies that have higher earnings growth.
✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the food and staples retailing industry is 29.96. And Kroger's ratio comes in at 12.4. It's trading at a better value than many of its competitors.
✗ Debt-to-Equity : The debt-to-equity ratio for Kroger stock is 219.14%. That's above the food and staples retailing industry average of 70.82%. That's not a good sign. Kroger's debt levels should be lower.
✗ Free Cash Flow per Share Growth : Kroger's FCF has been lower than that of its competitors over the last year. That's not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It's one of our most important fundamental factors.
✗ Profit Margins : The profit margin of Kroger comes in at 0.84% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Kroger's profit margin is below the food and staples retailing average of 2.89%. So that's a negative indicator for investors.
✓ Return on Equity : Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for Kroger is 25.23%, and that's above its industry average ROE of 16.55%.
Kroger stock passes two of our six key metrics today. That's why our Investment U Stock Grader rates it as a Hold With Caution.