Kenvue Inc. (NYSE: KVUE)

Sector: Consumer Defensive Industry: Household & Personal Products CIK: 0001944048
Market Cap 34.07 Bn
P/B 3.20
P/E 23.78
P/S 2.27
ROIC (Qtr) 9.18
Div Yield % 1.15
Rev 1y % (Qtr) -3.46
Total Debt (Qtr) 8.97 Bn
Debt/Equity (Qtr) 0.84

About

Kenvue Inc., known by its stock symbol KVUE, is a prominent player in the consumer health industry, holding the position as the world's largest pure-play consumer health company by revenue. With a rich history spanning over 135 years, the company has established a presence in more than 165 countries, offering a broad range of products designed to enhance the overall health and wellbeing of its customers. The company's operations are divided into three primary business segments: Self Care, Skin Health and Beauty, and Essential Health. Through these...

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Price action

Investment thesis

Bull case

  • Operating cash flow of 2.14B provides strong 13.35x coverage of stock compensation 160M, indicating sustainable incentive practices.
  • Robust free cash flow of 1.64B exceeds capital expenditure of 497M by 3.30x, indicating strong organic growth funding capability.
  • Tangible assets of 9.09B provide robust 5.06x coverage of other current liabilities 1.80B, indicating strong asset backing.
  • Operating cash flow of 2.14B provides strong 7.49x coverage of operating expenses 285M, showing operational efficiency.
  • Free cash flow of 1.64B provides healthy 0.91x coverage of inventory 1.79B, showing efficient inventory management.

Bear case

  • Operating cash flow of 2.14B barely covers its investment activities of (493M), with a coverage ratio of -4.33, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 2.14B provides thin coverage of dividend payments of (1.58B) with a -1.36 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 1.14B provide limited coverage of acquisition spending of (6M), which is -189.83x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High financing cash flow of (1.55B) relative to working capital of (124M), which is 12.54x suggests concerning dependence on external funding for operational needs.
  • Tax assets of 237M provide limited offset against tax liabilities of 2.53B, which is 0.09x, indicating potential future cash flow pressure from tax obligations.

Peer comparison

Companies in the Household & Personal Products
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 PG PROCTER & GAMBLE Co 401.54 Bn 29.00 5.43 36.64 Bn
2 UL Unilever Plc 182.31 Bn 22.43 2.85 -
3 CL Colgate Palmolive Co 78.47 Bn 52.42 4.20 8.42 Bn
4 KMB Kimberly Clark Corp 35.97 Bn 19.97 1.96 7.30 Bn
5 EL Estee Lauder Companies Inc 34.41 Bn -193.32 2.35 9.39 Bn
6 KVUE Kenvue Inc. 34.07 Bn 23.78 2.27 8.97 Bn
7 CHD Church & Dwight Co Inc /De/ 25.66 Bn 58.49 7.25 2.20 Bn
8 CLX Clorox Co /De/ 14.46 Bn 19.15 2.14 3.22 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.53 1.51
EV to Cash from Ops. EV/CFO 19.48 11.18
EV to Debt EV to Debt 4.64 4.46
EV to EBIT EV/EBIT 18.14 22.50
EV to EBITDA EV/EBITDA 14.20 5.19
EV to Free Cash Flow [EV/FCF] EV/FCF 25.39 29.65
EV to Market Cap EV to Market Cap 1.22 -1.73
EV to Revenue EV/Rev 2.77 2.27
Price to Book Value [P/B] P/B 3.20 -46.60
Price to Earnings [P/E] P/E 23.78 15.50
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.91 8.97
Dividend Payout Ratio % Div Payout % (Qtr) 109.60 5.07
Dividend per Basic Share Div per Share (Qtr) 0.83 0.95
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 97.43 10.73
Interest Coverage Int. cover (Qtr) 6.10 2.60
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 7.79 -97.30
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 7.76 5.93
Dividend Growth (1y) % Div 1y % (Qtr) 36.56 -0.27
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 27.26 -154.67
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 18.95 -119.65
EBIT Growth (1y) % EBIT 1y % (Qtr) 27.09 -149.91
EBT Growth (1y) % EBT 1y % (Qtr) 34.50 -226.50
EPS Growth (1y) % EPS 1y % (Qtr) 38.18 -132.37
FCF Growth (1y) % FCF 1y % (Qtr) 18.17 27.80
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -2.32 -2.04
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.55 0.82
Cash Payout Ratio Cash Payout (Qtr) 0.60 0.19
Cash Ratio Cash Ratio (Qtr) 0.19 0.75
Current Ratio Curr Ratio (Qtr) 0.98 2.30
Debt to Equity Ratio Debt/Equity (Qtr) 0.84 1.13
Interest Cover Ratio Int Coverage (Qtr) 6.10 2.60
Times Interest Earned Times Interest Earned (Qtr) 6.10 2.60
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 19.10 -32.80
EBIT Margin % EBIT Margin % (Qtr) 15.29 -37.22
EBT Margin % EBT Margin % (Qtr) 12.78 -40.91
Gross Margin % Gross Margin % (Qtr) 58.10 50.08
Net Profit Margin % Net Margin % (Qtr) 9.50 -43.08