World Kinect Corp (NYSE: WKC)

Sector: Energy Industry: Oil & Gas Refining & Marketing CIK: 0000789460
Market Cap 1.86 Bn
P/B 0.96
P/E 10.61
P/S 0.07
ROIC (Qtr) -7.57
Div Yield % 1.65
Rev 1y % (Qtr) -10.48
Total Debt (Qtr) 795.40 Mn
Debt/Equity (Qtr) 0.49
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About

World Kinect Corporation (WKC), a global energy management company, operates in three primary segments: aviation, land, and marine. WKC provides fuel and related products and services to customers across various industries, including aviation, marine, and land transportation. The aviation segment of WKC offers fuel supply and comprehensive service solutions to major commercial airlines, cargo carriers, and private aircraft operators. This segment provides fuel management, price risk management, ground handling, and trip planning services, among...

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Investment thesis

Bull case

  • Strong operating cash flow of 379M provides robust 0.48x coverage of total debt 795.40M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 473.60M provide 16.44x coverage of short-term debt 28.80M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 379M provides exceptional 122.26x coverage of minority interest expenses 3.10M, showing strong core operations.
  • Operating cash flow of 379M provides strong 15.66x coverage of stock compensation 24.20M, indicating sustainable incentive practices.
  • Robust free cash flow of 316.90M exceeds capital expenditure of 62.10M by 5.10x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 379M barely covers its investment activities of (39.20M), with a coverage ratio of -9.67, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 379M provides thin coverage of dividend payments of (40.20M) with a -9.43 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 473.60M provide limited coverage of acquisition spending of (7.70M), which is -61.51x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 2.08B relative to inventory of 501.30M (4.15 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Operating cash flow of 379M provides minimal -3.59x coverage of tax expenses of (105.70M), suggesting potential tax planning inefficiencies or unsustainable tax positions.

Segments Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Oil & Gas Refining & Marketing
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MPC Marathon Petroleum Corp 142.92 Bn 53.05 1.86 34.20 Bn
2 VLO Valero Energy Corp/Tx 79.27 Bn 8.41 0.46 10.58 Bn
3 PSX Phillips 66 70.22 Bn 27.51 0.54 21.76 Bn
4 SUN Sunoco LP 5.94 Bn 11.81 0.45 10.07 Bn
5 DINO HF Sinclair Corp 5.65 Bn 289.25 1.17 3.16 Bn
6 PBF PBF Energy Inc. 3.87 Bn -24.43 0.13 2.90 Bn
7 DK Delek US Holdings, Inc. 2.42 Bn 7.69 0.13 3.59 Bn
8 CVI Cvr Energy Inc 2.28 Bn 13.73 0.31 1.83 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.33 0.76
EV to Cash from Ops. EV/CFO 4.20 8.58
EV to Debt EV to Debt 2.49 2.22
EV to EBIT EV/EBIT 7.94 10.87
EV to EBITDA EV/EBITDA 6.20 9.19
EV to Free Cash Flow [EV/FCF] EV/FCF 4.73 10.02
EV to Market Cap EV to Market Cap 1.06 1.76
EV to Revenue EV/Rev 0.07 0.77
Price to Book Value [P/B] P/B 0.96 6.86
Price to Earnings [P/E] P/E 10.61 34.12
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -10.86 -0.72
Dividend Payout Ratio % Div Payout % (Qtr) -9.60 28.49
Dividend per Basic Share Div per Share (Qtr) 0.74 1.75
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 12.98 -37.85
Interest Coverage Int. cover (Qtr) -4.63 1.50
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 11.29 -33.62
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 26.70 150.03
Dividend Growth (1y) % Div 1y % (Qtr) 13.85 1.78
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -252.64 -40.63
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -138.68 451.72
EBIT Growth (1y) % EBIT 1y % (Qtr) -269.65 -35.27
EBT Growth (1y) % EBT 1y % (Qtr) -461.05 -53.20
EPS Growth (1y) % EPS 1y % (Qtr) -436.40 -26.82
FCF Growth (1y) % FCF 1y % (Qtr) 327.67 12.55
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -2.85 31.60
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 6.21 2.36
Cash Payout Ratio Cash Payout (Qtr) 0.09 0.42
Cash Ratio Cash Ratio (Qtr) 0.15 0.39
Current Ratio Curr Ratio (Qtr) 1.15 1.41
Debt to Equity Ratio Debt/Equity (Qtr) 0.49 10.15
Interest Cover Ratio Int Coverage (Qtr) -4.63 1.50
Times Interest Earned Times Interest Earned (Qtr) -4.63 1.50
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -0.80 6.34
EBIT Margin % EBIT Margin % (Qtr) -1.18 1.61
EBT Margin % EBT Margin % (Qtr) -1.44 -2.36
Gross Margin % Gross Margin % (Qtr) 2.60 12.04
Net Profit Margin % Net Margin % (Qtr) -1.20 -3.21