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World Kinect (WKC)
NYSE:WKC
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World Kinect
(NYSE:WKC)
57Neutral
Positive Factors
Dividend Growth
World Kinect increased its quarterly dividend 21%, from $0.14/sh to $0.17/sh, as the company has posted a 14% dividend CAGR from 2020 to 2023.
Share Repurchase Program
World Kinect Corporation (WKC) added $200 mil to its share repurchase authorization, resulting in a total ~$308 mil potential buyback.
Negative Factors
Financial Performance
Financial results did not meet consensus expectations, impacting the investment outlook.
World Kinect (WKC) vs. S&P 500 (SPY)
Market Cap
$1.61B
Dividend Yield2.39%
Average Volume (3M)946.31K
Price to Earnings (P/E)24.9
Beta (1Y)1.05
Revenue Growth-12.04%
EPS Growth25.93%
CountryUS
Employees4,745
SectorEnergy
Sector Strength87
IndustryOil & Gas Refining & Marketing
Share Statistics
EPS (TTM)1.05
Shares Outstanding56,749,400
10 Day Avg. Volume1,049,240
30 Day Avg. Volume946,308
Financial Highlights & Ratios
PEG Ratio0.96
Price to Book (P/B)N/A
Price to Sales (P/S)0.04
Price to Cash Flow (P/CF)3.30
P/FCF Ratio3.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$29.67Price Target Upside4.40% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering3
World Kinect Business Overview & Revenue Model
Company DescriptionWorld Kinect Corporation (WKC) is a global leader in providing energy solutions, supply chain management, and sustainability services. Operating across various sectors, including aviation, transportation, marine, and commercial industries, WKC specializes in delivering customized solutions that optimize energy use and improve operational efficiency. Its core services include fuel supply and logistics, energy procurement, and sustainability consulting.
How the Company Makes MoneyWorld Kinect Corporation generates revenue through its diversified service offerings, primarily centered around energy solutions and supply chain management. The company earns income by providing fuel supply and logistics services, where it sources, transports, and delivers fuel to clients across various industries. Additionally, WKC offers energy procurement services, allowing businesses to manage and optimize their energy consumption effectively, often through long-term contracts and strategic partnerships. Furthermore, WKC's sustainability consulting services provide tailored solutions that help clients reduce their environmental impact and achieve sustainability goals, adding another revenue stream. Key partnerships with energy producers, logistics providers, and technology firms enhance its service offerings, contributing significantly to its earnings.
World Kinect Financial Statement Overview
Summary
World Kinect shows mixed financial performance. The income statement reflects declining revenues and profitability challenges, but there is slight improvement in net profitability. The balance sheet indicates moderate stability with manageable leverage. However, cash flow metrics reveal a decline in free cash flow generation, highlighting potential liquidity concerns. The company needs to focus on improving revenue growth and cash flow management to enhance its financial health.Income Statement
The company's gross profit margin for the TTM is 1.98%, showing a decline from 2.22% the previous year. Net profit margin improved slightly to 0.16% from 0.11% last year, indicating some efficiency in managing costs. However, there is a noticeable revenue decline of 11.8% compared to the previous year, which is concerning. EBIT and EBITDA margins have decreased, reflecting operational challenges.58
Neutral
Balance Sheet
The debt-to-equity ratio is relatively stable at 0.45, demonstrating manageable leverage levels. Return on equity shows a minor increase to 3.46% from 2.72%, but remains low. The equity ratio is stable at 28.94%, indicating a balanced approach towards financing. Overall, the balance sheet reflects moderate stability with no significant fluctuations.65
Positive
Cash Flow
Free cash flow growth rate is negative due to a decrease of 36.6% compared to last year. The operating cash flow to net income ratio is 2.80, which indicates strong cash flow generation relative to net income, although the ratio has decreased from the previous year. The free cash flow to net income ratio is 1.73, showing a reduction in cash availability for shareholders.62
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 42.17B | 47.71B | 59.04B | 31.34B | 20.36B | Gross Profit |
| 1.03B | 1.06B | 1.09B | 788.20M | 851.80M | EBIT |
| 210.60M | 198.00M | 273.20M | 142.60M | 137.90M | EBITDA |
| 210.60M | 306.70M | 366.10M | 226.80M | 295.60M | Net Income Common Stockholders |
| 67.40M | 52.90M | 114.10M | 73.70M | 109.60M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 382.90M | 304.30M | 298.40M | 652.20M | 658.80M | Total Assets |
| 6.73B | 7.38B | 8.16B | 5.94B | 4.50B | Total Debt |
| 880.80M | 887.90M | 845.70M | 508.70M | 524.70M | Net Debt |
| 497.90M | 583.60M | 547.30M | -143.50M | -134.10M | Total Liabilities |
| 4.78B | 5.43B | 6.17B | 4.03B | 2.59B | Stockholders Equity |
| 1.95B | 1.94B | 1.98B | 1.91B | 1.91B |
| Cash Flow | Free Cash Flow | |||
| 191.70M | 183.70M | 59.90M | 134.00M | 552.80M | Operating Cash Flow |
| 259.90M | 271.30M | 138.50M | 173.20M | 604.10M | Investing Cash Flow |
| 64.50M | -101.10M | -724.90M | -58.30M | 72.80M | Financing Cash Flow |
| -230.60M | -152.40M | 237.30M | -113.60M | -213.00M |
World Kinect Technical Analysis
Positive
28.42
Price Trends
28.48
Positive
28.10
Positive
27.86
Positive
Market Momentum
-0.04
Negative
52.50
Neutral
52.83
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WKC, the sentiment is Positive. The current price of 28.42 is below the 20-day moving average (MA) of 28.48, below the 50-day MA of 28.48, and above the 200-day MA of 27.86, indicating a bullish trend. The MACD of -0.04 indicates Negative momentum. The RSI at 52.50 is Neutral, neither overbought nor oversold. The STOCH value of 52.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WKC.
World Kinect Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $1.32B | 3.35 | 23.93% | 2.56% | -16.70% | -24.06% | |
76 Outperform | $8.76B | 9.50 | 28.38% | 6.12% | -1.63% | 80.11% | |
67 Neutral | $46.45B | 14.73 | 16.33% | 2.33% | -6.70% | -57.85% | |
58 Neutral | $9.28B | 5.49 | -6.28% | 7.46% | -0.20% | -73.68% | |
57 Neutral | $1.61B | 24.86 | 3.46% | 2.39% | -12.04% | 25.93% | |
55 Neutral | $2.04B | 291.52 | 0.90% | 9.86% | -17.69% | -99.09% | |
47 Neutral | $992.33M | ― | -108.21% | 6.30% | -28.68% | -4373.94% |
* Energy Sector Average
Performance Comparison
WKC
World Kinect
28.67
2.70
10.40%
CVI
CVR Energy
20.24
-13.39
-39.82%
DK
Delek US Holdings
16.04
-13.10
-44.96%
MPC
Marathon Petroleum
149.81
-43.08
-22.33%
TNK
Teekay Tankers
38.81
-15.78
-28.91%
SUN
Sunoco
57.87
1.48
2.62%
World Kinect Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: 2.97% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive and negative aspects. While there was strong cash flow and strategic divestitures that streamlined operations, the company faced challenges with declining gross profit and underperformance in the marine and land segments. The sentiment was balanced with efforts to improve operational efficiency and shareholder returns.Highlights
Strong Cash Flow and Share Repurchase
World Kinect generated $260 million of operating cash flow and $192 million of free cash flow for the full year, enabling them to repurchase $100 million of shares, nearly double the amount repurchased in 2023.
Aviation Business Performance
The aviation business delivered impressive results in the fourth quarter, with a 4% year-over-year increase in volume driven by core aviation business activities.
Operating Expense Reduction
Adjusted consolidated operating expenses were down 6% year-over-year, with a further decline expected in 2025.
Strategic Divestitures
Divestiture of underperforming business in Brazil and certain North American land business activities to streamline operations and improve financial returns.
Lowlights
Decline in Consolidated Gross Profit
Consolidated adjusted gross profit declined 8% in Q4 year-over-year to $259 million, with full-year gross profit down 7% from 2023.
Marine Business Challenges
Marine volumes and gross profit decreased, with a 22% year-over-year decline in Q4 gross profit, attributed to lower bunker fuel prices and reduced market volatility.
Land Segment Profitability Issues
Land adjusted gross profit was down 14% year-over-year for the full year, primarily due to unfavorable market conditions in Brazil and the UK.
Non-GAAP Adjustments Impact
There were several non-GAAP adjustments, including a $111 million charge related to the sale of operations in Brazil, affecting the financial results.
Company Guidance
During the World Kinect Fourth Quarter 2024 Earnings Conference Call, significant guidance and metrics were provided indicating the company's strategic direction and financial performance. The company reported strong cash flow generation in Q4 and the full year, in line with their cash flow target from the previous Investor Day, which facilitated a $100 million share repurchase, nearly double that of 2023. The aviation segment showed impressive results with a 4% increase in Q4 volumes year-over-year, despite a 1% decline for the full year. Marine volumes decreased by 4% in Q4, contributing to a 9% annual gross profit decline, while the land segment maintained flat gross profit year-over-year in Q4 but saw its strongest quarterly operating margin for the year. The company divested its underperforming Brazilian operations and exited certain North American land activities, incurring a $111 million one-time noncash pretax charge. Adjusted operating expenses were down 5% in Q4, with expectations for further declines in 2025. Interest expense decreased by 33% year-over-year in Q4, and the adjusted effective tax rate for 2024 was just under 15%. The company remains committed to enhancing shareholder returns, returning $139 million to shareholders through buybacks and dividends in 2024, and aims for continued operational efficiency improvements in 2025.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.