US Foods Holding Corp. (NYSE: USFD)

Sector: Consumer Defensive Industry: Food Distribution CIK: 0001665918
Market Cap 22.03 Bn
P/B 5.11
P/E 32.59
P/S 0.56
ROIC (Qtr) 9.39
Div Yield % 0.00
Rev 1y % (Qtr) 3.26
Total Debt (Qtr) 5.37 Bn
Debt/Equity (Qtr) 1.25
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About

US Foods Holding Corp., commonly known as US Foods, is a prominent foodservice distributor in the United States, operating under the ticker symbol USFD. The company specializes in providing a diverse range of food and non-food products to a variety of customers, which include independent restaurants, healthcare facilities, hospitality establishments, education institutions, and retail locations. The core of US Foods' business activities involves the sale of fresh, frozen, and dry food products, as well as non-food items, sourced from thousands...

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Investment thesis

Bull case

  • Operating cash flow of 1.37B provides strong 16.49x coverage of stock compensation 83M, indicating sustainable incentive practices.
  • Robust free cash flow of 965M exceeds capital expenditure of 404M by 2.39x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 7.37B provides 12.86x coverage of working capital 573M, indicating strong operational backing.
  • Operating cash flow of 1.37B fully covers other non-current liabilities 982M by 1.39x, showing strong long-term stability.
  • Tangible assets of 7.37B provide robust 8.78x coverage of other current liabilities 839M, indicating strong asset backing.

Bear case

  • Operating cash flow of 1.37B barely covers its investment activities of (497M), with a coverage ratio of -2.75, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 41M against inventory of 1.71B, the 0.02 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Cash reserves of 41M provide limited coverage of acquisition spending of (93M), which is -0.44x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 1.20B show weak coverage of depreciation charges of 462M, with a 2.60 ratio indicating high capital intensity and potential reinvestment needs.
  • Cash position of 41M provides weak coverage of payables of 2.45B, which is 0.02x, indicating potential working capital stress and supplier relationship risks.

Peer comparison

Companies in the Food Distribution
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SYY Sysco Corp 52.49 Bn 48.75 1.21 14.97 Bn
2 USFD US Foods Holding Corp. 22.03 Bn 32.59 0.56 5.37 Bn
3 PFGC Performance Food Group Co 15.24 Bn 44.17 0.23 7.99 Bn
4 CHEF Chefs' Warehouse, Inc. 2.62 Bn 35.11 0.65 0.95 Bn
5 UNFI United Natural Foods Inc 2.38 Bn -23.56 0.07 3.47 Bn
6 ANDE Andersons, Inc. 1.88 Bn 20.94 0.34 0.77 Bn
7 AVO Mission Produce, Inc. 1.03 Bn 27.23 0.74 0.20 Bn
8 CVGW Calavo Growers Inc 0.45 Bn -33.31 0.43 0.02 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.94 1.05
EV to Cash from Ops. EV/CFO 19.79 34.23
EV to Debt EV to Debt 5.05 13.37
EV to EBIT EV/EBIT 22.52 164.56
EV to EBITDA EV/EBITDA 16.31 4.40
EV to Free Cash Flow [EV/FCF] EV/FCF 28.07 22.08
EV to Market Cap EV to Market Cap 1.23 1.45
EV to Revenue EV/Rev 0.69 0.53
Price to Book Value [P/B] P/B 5.11 2.85
Price to Earnings [P/E] P/E 32.59 13.20
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 0.57
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 21.05
Dividend per Basic Share Div per Share (Qtr) 0.00 0.44
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 8.21
Interest Coverage Int. cover (Qtr) 3.94 7.20
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -19.53 -12.24
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -30.51 35.81
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 32.53
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 23.11 65.49
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 8.07 -8.59
EBIT Growth (1y) % EBIT 1y % (Qtr) 25.44 21.40
EBT Growth (1y) % EBT 1y % (Qtr) 39.44 -278.84
EPS Growth (1y) % EPS 1y % (Qtr) 45.37 -67.04
FCF Growth (1y) % FCF 1y % (Qtr) 15.43 82.95
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 5.05 1.59
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 2.83 2.79
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.07
Cash Ratio Cash Ratio (Qtr) 0.01 0.34
Current Ratio Curr Ratio (Qtr) 1.16 2.65
Debt to Equity Ratio Debt/Equity (Qtr) 1.25 1.41
Interest Cover Ratio Int Coverage (Qtr) 3.94 7.20
Times Interest Earned Times Interest Earned (Qtr) 3.94 7.20
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 4.20 4.45
EBIT Margin % EBIT Margin % (Qtr) 3.05 8.39
EBT Margin % EBT Margin % (Qtr) 2.28 4.17
Gross Margin % Gross Margin % (Qtr) 17.40 24.60
Net Profit Margin % Net Margin % (Qtr) 1.70 3.22