ODP  Office Depot Inc.

Exchange

NYSE

Sector

Consumer Services

Industry

Other Specialty Stores

Market Cap.

2.60B

Vuru Grade

33.01/100

Current Price

$5.04
+0.00 (+0.00%)

Growth Price

$8.34
Undervalued by 65.54%

Stability Price

$5.58
Undervalued by 10.77%

Company Metrics

  • P/E 4.55
  • P/S 0.24
  • P/B 1.33
  • EPS 1.11
  • Cash ROIC 2.28%
  • Cash Ratio 0.38
  • Dividend 0.10 / 1.98 %
  • Avg. Vol. 5.70M
  • Shares 515.87M
  • Market Cap. 2.60B

Company Description

Office Depot, Inc., together with its subsidiaries, supplies office products and services. Its North American Retail division sells an assortment of merchandise, such as general office supplies, computer supplies, business machines and related supplies, and office furniture under various labels, including Office Depot, Viking Office Products, Foray, Ativa, Break Escapes, Niceday, and Worklife thro... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Office Depot profit beats as fewer stores help tighten costs
Reuters - May 9, 2017
Office supply chain Office Depot Inc (ODP.O) reported a bigger-than-expected quarterly profit as expenses fell, in part due to a lower store count, sending the retailer's shares up as much as 7 percent on Tuesday.
Office Depot beats, but same-store sales whiff - Business Insider
Office Depot Continues To Emphasize Cutting Costs - Seeking Alpha
Office Depot in Peoria to close next month
Peoria Journal Star - May 23, 2017
“As part of the three-year strategic plan announced in August 2016, Office Depot Inc. continues to optimize its store footprint in North America, including approximately 300 store closures of Office Depot and OfficeMax stores by 2018,” spokeswoman ...
Office Depot, Inc. (ODP) Ex-Dividend Date Scheduled for May 23, 2017
Nasdaq - May 22, 2017
Office Depot, Inc. ( ODP ) will begin trading ex-dividend on May 23, 2017. A cash dividend payment of $0.025 per share is scheduled to be paid on June 15, 2017.
Office Depot, Inc. Survey Finds Annual Cost to Educators of Researching and ... - Business Wire (press release)
Office Depot Inc (ODP) Upgraded to "Buy" by Zacks Investment Research - The Cerbat Gem
BRIEF-Office Depot Inc reports Q1 earnings per share $0.22
Reuters - May 9, 2017
NEW YORK, May 10 The controversial Dakota Access pipeline leaked 84 gallons of crude oil at a pump station in South Dakota last month, according to state documents, just weeks before the pipeline is set to start commercial service.
Brokerages Anticipate Office Depot Inc (ODP) Will Post Earnings of $0.12 Per Share
The Cerbat Gem - 4 hours ago
Office Depot logo Equities research analysts predict that Office Depot Inc (NASDAQ:ODP) will post earnings per share of $0.12 for the current fiscal quarter, Zacks Investment Research reports.
Numbers in Focus for Shares of Office Depot, Inc. (NASDAQ:ODP) - Baldwin Journal
Office Depot Inc (ODP) Posts Earnings Results, Beats Estimates By $0.04 EPS - Chaffey Breeze
Office Depot Inc. Reports 28% Increase In Q1 Earnings
Markets Insider - May 9, 2017
(RTTNews) - Office Depot Inc. (ODP) reported earnings for its first quarter that climbed from last year. The company said its bottom line climbed to $88 million, or $0.16 per share.
Valeant Pharmaceuticals Intl Inc And Office Depot Inc Soar After Earnings Results
ValueWalk - May 9, 2017
Valeant Pharmaceuticals and Office Depot released their latest earnings reports. Valeant posted $2.11 billion in sales, compared to the consensus estimate of $2.18 billion in revenue.
Office Depot Drives Digital Transformation with Stibo Systems MDM
Business Wire (press release) - May 24, 2017
ATLANTA--(BUSINESS WIRE)--Stibo Systems, the global leader in multidomain Master Data Management (MDM) solutions, today announced that Office Depot, Inc. (NASDAQ:ODP), the leading global provider of office products, services and solutions, has ...
Ex-Dividend Reminder: Six Flags Entertainment, Office Depot and Expedia
Nasdaq - May 19, 2017
Looking at the universe of stocks we cover at Dividend Channel , on 5/23/17, Six Flags Entertainment Corp (Symbol: SIX), Office Depot, Inc. (Symbol: ODP), and Expedia Inc (Symbol: EXPE) will all trade ex-dividend for their respective upcoming dividends.
Michael R. Allison Sells 66217 Shares of Office Depot Inc (ODP) Stock
The Cerbat Gem - 15 hours ago
Office Depot logo Office Depot Inc (NASDAQ:ODP) insider Michael R. Allison sold 66,217 shares of the company's stock in a transaction on Tuesday, May 16th.
Checking the Overall Picture for Office Depot, Inc. (ODP) - StockNewsJournal
Is Office Depot, Inc. (ODP) a good buy? - TopChronicle
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for ODP to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate ODP's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$5.04 Current Price

$8.34 Growth Price (DCF)

Undervalued by 65.54%


Growth Rate Assumed by Market: -34.18%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$5.58 Stability Price (EPV)

Undervalued by 10.77%


Discount Rate: 15.0%

$5.40 Book Price

Undervalued by 7.10%


Poor Cash Return on Invested Capital over the past 5 years

ODP has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

ODP has only created $2.28 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 59.07M -244.00M 33.00M -37.00M 381.00M
divided by
Invested Capital 1.29B 3.60B 2.88B 2.63B 2.75B
Cash ROIC 4.57% -6.78% 1.15% -1.41% 13.87%

Very Poor Return on Equity over the past 5 years

ODP has shown an inability to deliver results for shareholders. This could be due to poor management, ODP operating in a highly competitive industry, or having a weak business in general.

ODP has generated a $1.06 loss for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income -77.12M -20.00M -352.00M 8.00M 529.00M
divided by
Stockholders' Equity 661.44M 2.06B 1.62B 1.60B 1.85B
Return on Equity -11.66% -0.97% -21.71% 0.50% 28.56%

Good Business Performance over the past 10 years

It's likely ODP has been unable to maintain profitability in tough economic times, making it a somewhat cyclical business. The other possibility is ODP has expended significant capital on items such as property, plant and equipment in specific years. Look for correlations.

ODP has created positive free cash flow for 7 or 8 of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow -49.19M 138.18M 165.59M 30.26M 69.35M 59.07M -244.00M 33.00M -37.00M 381.00M

Weak Balance Sheet

ODP's financial position is not ideal. The key is to check whether ODP is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 222.95M 155.75M 659.90M 627.48M 570.68M 670.81M 955.00M 1.07B 1.07B 763.00M
Current Assets 3.72B 3.12B 3.21B 3.09B 2.74B 2.70B 4.40B 4.22B 4.06B 2.97B
Total Assets 7.26B 5.27B 4.89B 4.65B 4.25B 4.01B 7.48B 6.84B 6.44B 5.54B
Current Liabilities 2.97B 2.63B 2.43B 2.34B 2.05B 2.05B 2.92B 2.89B 2.74B 2.03B
Total Liabilities 4.17B 3.91B 4.10B 3.87B 3.51B 3.35B 5.41B 5.22B 4.84B 3.69B
Stockholder' Equity 3.08B 1.36B 786.42M 778.43M 739.07M 661.44M 2.06B 1.62B 1.60B 1.85B
Current Ratio 1.25 1.19 1.32 1.32 1.34 1.32 1.50 1.46 1.48 1.46
TL-to-TA 0.58 0.74 0.84 0.83 0.83 0.84 0.72 0.76 0.75 0.67

Low or No Reinvestment of Profits over the past 10 years

ODP has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to ODP operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 3.78B 6.27M -590.20M -555.30M -539.12M -616.24M -636.00M -990.00M -982.00M -453.00M
Retained Earnings Growth - -99.83% -9,513.00% 5.91% 2.91% -14.30% -3.21% -55.66% 0.81% 53.87%

Loss Making Entity over the past 10 years

ODP has been unable to maintain profitability. It's Costs of Sales have outstripped Revenue consistently. This is a huge red flag, unless the company has been investing heavily for the future. However, even that is dubious since accurately predicting the future of a company like that is extremely difficult.

$0.97 of every $100 of Revenue have been a loss, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 395.62M -1.48B -596.47M 34.89M 95.69M -77.12M -20.00M -352.00M 8.00M 529.00M
divided by
Revenue 15.53B 14.50B 12.14B 11.63B 11.49B 10.70B 11.24B 16.10B 14.49B 11.02B
Net Profit Margin 2.55% -10.20% -4.91% 0.30% 0.83% -0.72% -0.18% -2.19% 0.06% 4.80%

Inconsistent Gross Profit Margins over the past 10 years

ODP has good gross profit margins, however inconsistency of these margins is a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$33.94 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 4.50B 4.01B 3.39B 3.36B 11.49B 3.25B 2.63B 3.78B 3.50B 2.71B
divided by
Revenue 15.53B 14.50B 12.14B 11.63B 11.49B 10.70B 11.24B 16.10B 14.49B 11.02B
Gross Margin 29.00% 27.63% 27.93% 28.86% 100.00% 30.36% 23.36% 23.46% 24.18% 24.57%

High Capital Intensity over the past 10 years

ODP spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

559.35% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 460.57M 330.08M 130.85M 169.45M 130.32M 120.26M 137.00M 123.00M 163.00M 111.00M
divided by
Net Income 395.62M -1.48B -596.47M 34.89M 95.69M -77.12M -20.00M -352.00M 8.00M 529.00M
Capital Expenditure Ratio 116.42% -22.32% -21.94% 485.65% 136.18% -155.94% -685.00% -34.94% 2,037.50% 20.98%

No Dividend History over the past 10 years

ODP has never distributed dividends or has recently suspended their dividend distribution.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 276.65M 273.07M 313.08M 354.53M 356.80M 362.56M 381.00M 535.00M 555.00M 549.00M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 13.65 2.84 6.55 5.53 2.15 3.27 5.23 8.61 5.55 4.52
Dividend Yield - - - - - - - - - -

History of Stock Buybacks over the past 10 years

ODP has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 276.65M 273.07M 313.08M 354.53M 356.80M 362.56M 381.00M 535.00M 555.00M 549.00M
Stock Bought Back - 1.31% -12.78% -11.69% -0.63% -1.59% -4.84% -28.79% -3.60% 1.09%
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