Tootsie Roll Industries Inc (TROLB) stock analysis

P/E below its 5-year median

Tootsie Roll Industries's P/E of 28.4 is below its own 5-year median of 29.5.

P/E above the industry

Tootsie Roll Industries's P/E of 28.4 is above the Food and Kindred Products median of 20.8.

EV/EBITDA above its 5-year median

Tootsie Roll Industries's EV/EBITDA of 24.6 is above its 5-year median of 20.2.

P/B above the industry

Tootsie Roll Industries's price-to-book of 2.91 is above the Food and Kindred Products median of 2.02.

Trading above fair value

The share price of $36.86 is above our fair value estimate of $27.98.

Margin of safety under 20%

The price is 31.7% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 2.2% a year over the last three fiscal years, short of the 10% we look for.

EPS growth over 3 years

Needs positive EPS three years ago and today.

Earnings growth not accelerating

Net income grew 5.0% over the last twelve months, against a 5-year average of 11.1% a year.

Growing slower than the industry

Revenue grew 1.6% over the last twelve months; the Food and Kindred Products median is 2.7%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin slipping

Gross margin was 34.5% over the last twelve months, against 36.2% a year earlier.

Return on equity under 15%

Return on equity was 10.3% over the last twelve months and averaged 10.2% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 8.4%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

Tootsie Roll Industries's return on equity of 10.3% is above the Food and Kindred Products median of 4.9%.

Earnings grew over 5 years

Net income grew 11.1% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 13.0% over the last twelve months, against a 5-year average of 12.0%.

Net margin above the industry

Tootsie Roll Industries's net margin of 13.0% is above the Food and Kindred Products median of 2.0%.

No debt

Tootsie Roll Industries has no borrowings on its latest balance sheet.

Debt not rising

With no debt today, leverage cannot have risen.

Debt covered by cash flow

There is no debt to cover.

Interest well covered

No meaningful interest expense to cover.

Short-term assets cover short-term debts

Current assets are 2.89 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 6.25; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Tootsie Roll Industries paid dividends worth 1.0% of the share price over the last twelve months.

Yield below Treasuries

The 1.0% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 4.0% or more; Tootsie Roll Industries yields 1.0%.

Dividend stability

Fewer than five years of dividend history.

Covered by earnings

Dividends take 27.7% of net income.

Covered by free cash flow

Dividends take 33.0% of free cash flow.