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Hostess Brands

Nasdaq:TWNK
Snowflake Description

Fair value with limited growth.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
TWNK
Nasdaq
$2B
Imp Market Cap
  1. Home
  2. US
  3. Food, Beverage & Tobacco
Company description

Hostess Brands, Inc., a packaged food company, develops, manufactures, markets, sells, and distributes fresh sweet baked goods in the United States. The last earnings update was 12 days ago. More info.


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TWNK Share Price and Events
7 Day Returns
-0.8%
NasdaqCM:TWNK
1.2%
US Food
0.7%
US Market
1 Year Returns
21.1%
NasdaqCM:TWNK
3.6%
US Food
12.9%
US Market
TWNK Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Hostess Brands (TWNK) -0.8% 2.1% -3% 21.1% 0.8% -
US Food 1.2% 1.9% 0.9% 3.6% -5.8% 20.3%
US Market 0.7% 4.4% 7% 12.9% 39.5% 44.7%
1 Year Return vs Industry and Market
  • TWNK outperformed the Food industry which returned 3.6% over the past year.
  • TWNK outperformed the Market in United States of America which returned 12.9% over the past year.
Price Volatility
TWNK
Industry
5yr Volatility vs Market

TWNK Value

 Is Hostess Brands undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Hostess Brands to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Hostess Brands.

NasdaqCM:TWNK Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 8 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 7.9%
Perpetual Growth Rate 10-Year US Government Bond Rate 2.7%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NasdaqCM:TWNK
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year US Govt Bond Rate 2.7%
Equity Risk Premium S&P Global 6%
Food Unlevered Beta Simply Wall St/ S&P Global 0.55
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.55 (1 + (1- 21%) (56.26%))
0.863
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
0.86
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2.73% + (0.863 * 5.96%)
7.87%

Discounted Cash Flow Calculation for NasdaqCM:TWNK using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Hostess Brands is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

Note: Free cash flow to equity valuations ignore the company's cash or debt.

NasdaqCM:TWNK DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (USD, Millions) Source Present Value
Discounted (@ 7.87%)
2020 127.54 Analyst x5 118.23
2021 146.73 Analyst x3 126.10
2022 156.10 Analyst x1 124.36
2023 165.30 Analyst x1 122.08
2024 172.75 Est @ 4.51% 118.27
2025 179.62 Est @ 3.97% 114.00
2026 186.09 Est @ 3.6% 109.48
2027 192.30 Est @ 3.34% 104.88
2028 198.37 Est @ 3.16% 100.30
2029 204.38 Est @ 3.03% 95.80
Present value of next 10 years cash flows $1,133.00
NasdaqCM:TWNK DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2029 × (1 + g) ÷ (Discount Rate – g)
= $204.38 × (1 + 2.73%) ÷ (7.87% – 2.73%)
$4,083.24
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= $4,083.24 ÷ (1 + 7.87%)10
$1,913.89
NasdaqCM:TWNK Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= $1,133.00 + $1,913.89
$3,046.89
Equity Value per Share
(USD)
= Total value / Shares Outstanding
= $3,046.89 / 130.40
$23.37
NasdaqCM:TWNK Discount to Share Price
Calculation Result
Value per share (USD) From above. $23.37
Current discount Discount to share price of $13.41
= -1 x ($13.41 - $23.37) / $23.37
42.6%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

Current Discount
Amount off the current price Hostess Brands is available for.
Intrinsic value
43%
Share price is $13.41 vs Future cash flow value of $23.37
Current Discount Checks
For Hostess Brands to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
  • Hostess Brands's share price is below the future cash flow value, and at a moderate discount (> 20%).
  • Hostess Brands's share price is below the future cash flow value, and at a substantial discount (> 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Hostess Brands's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Hostess Brands's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NasdaqCM:TWNK PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2019-09-30) in USD $0.51
NasdaqCM:TWNK Share Price ** NasdaqCM (2019-11-15) in USD $13.41
United States of America Food Industry PE Ratio Median Figure of 41 Publicly-Listed Food Companies 23.89x
United States of America Market PE Ratio Median Figure of 2,924 Publicly-Listed Companies 18.25x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Hostess Brands.

NasdaqCM:TWNK PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NasdaqCM:TWNK Share Price ÷ EPS (both in USD)

= 13.41 ÷ 0.51

26.5x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Hostess Brands is overvalued based on earnings compared to the US Food industry average.
  • Hostess Brands is overvalued based on earnings compared to the United States of America market.
Price based on expected Growth
Does Hostess Brands's expected growth come at a high price?
Raw Data
NasdaqCM:TWNK PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 26.5x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 8 Analysts
14.6%per year
United States of America Food Industry PEG Ratio Median Figure of 27 Publicly-Listed Food Companies 1.2x
United States of America Market PEG Ratio Median Figure of 2,031 Publicly-Listed Companies 1.46x

*Line of best fit is calculated by linear regression .

NasdaqCM:TWNK PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 26.5x ÷ 14.6%

1.81x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Hostess Brands is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Hostess Brands's assets?
Raw Data
NasdaqCM:TWNK PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2019-09-30) in USD $12.01
NasdaqCM:TWNK Share Price * NasdaqCM (2019-11-15) in USD $13.41
United States of America Food Industry PB Ratio Median Figure of 69 Publicly-Listed Food Companies 2.26x
United States of America Market PB Ratio Median Figure of 5,081 Publicly-Listed Companies 1.74x
NasdaqCM:TWNK PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NasdaqCM:TWNK Share Price ÷ Book Value per Share (both in USD)

= 13.41 ÷ 12.01

1.12x

* Primary Listing of Hostess Brands.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Hostess Brands is good value based on assets compared to the US Food industry average.
X
Value checks
We assess Hostess Brands's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Food industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Food industry average (and greater than 0)? (1 check)
  5. Hostess Brands has a total score of 3/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

TWNK Future Performance

 How is Hostess Brands expected to perform in the next 1 to 3 years based on estimates from 8 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
14.6%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Hostess Brands expected to grow at an attractive rate?
  • Hostess Brands's earnings growth is expected to exceed the low risk savings rate of 2.7%.
Growth vs Market Checks
  • Hostess Brands's earnings growth is expected to exceed the United States of America market average.
  • Hostess Brands's revenue growth is positive but not above the United States of America market average.
Annual Growth Rates Comparison
Raw Data
NasdaqCM:TWNK Future Growth Rates Data Sources
Data Point Source Value (per year)
NasdaqCM:TWNK Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 8 Analysts 14.6%
NasdaqCM:TWNK Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 8 Analysts 2.3%
United States of America Food Industry Earnings Growth Rate Market Cap Weighted Average 19.8%
United States of America Food Industry Revenue Growth Rate Market Cap Weighted Average 2.9%
United States of America Market Earnings Growth Rate Market Cap Weighted Average 14.4%
United States of America Market Revenue Growth Rate Market Cap Weighted Average 7.3%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NasdaqCM:TWNK Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (1 month ago) See Below
Future Estimates Average of up to 8 Analyst Estimates (S&P Global) See Below
All numbers in USD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NasdaqCM:TWNK Future Estimates Data
Date (Data in USD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2023-12-31 979 110 1
2022-12-31 1,002 97 2
2021-12-31 937 164 94 6
2020-12-31 914 156 86 8
2019-12-31 911 145 62 6
2019-11-18
NasdaqCM:TWNK Past Financials Data
Date (Data in USD Millions) Revenue Cash Flow Net Income *
2019-09-30 906 141 53
2019-06-30 890 137 52
2019-03-31 864 134 60
2018-12-31 850 144 63
2018-09-30 832 156 231
2018-06-30 813 177 232
2018-03-31 800 176 232
2017-12-31 776 164 224
2017-09-30 759 144 -38
2017-06-30 763 129 -16
2017-03-31 752 123 -6
2016-12-31 728 116 -4

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Hostess Brands's earnings are expected to grow by 14.6% yearly, however this is not considered high growth (20% yearly).
  • Hostess Brands's revenue is expected to grow by 2.3% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NasdaqCM:TWNK Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (1 month ago) See Below
Future Estimates Average of up to 8 Analyst Estimates (S&P Global) See Below

All data from Hostess Brands Company Filings, last reported 1 month ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqCM:TWNK Future Estimates Data
Date (Data in USD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2023-12-31 0.91 0.91 0.91 1.00
2022-12-31 0.80 0.88 0.72 2.00
2021-12-31 0.78 0.85 0.70 2.00
2020-12-31 0.73 0.83 0.65 4.00
2019-12-31 0.58 0.67 0.52 4.00
2019-11-18
NasdaqCM:TWNK Past Financials Data
Date (Data in USD Millions) EPS *
2019-09-30 0.51
2019-06-30 0.52
2019-03-31 0.60
2018-12-31 0.63
2018-09-30 2.31
2018-06-30 2.33
2018-03-31 2.33
2017-12-31 2.26
2017-09-30 -0.23
2017-06-30 -0.11
2017-03-31 -0.05
2016-12-31 -0.05

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Hostess Brands is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
X
Future performance checks
We assess Hostess Brands's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United States of America market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United States of America market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Hostess Brands has a total score of 2/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

TWNK Past Performance

  How has Hostess Brands performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Hostess Brands's growth in the last year to its industry (Food).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Hostess Brands's year on year earnings growth rate has been positive over the past 5 years, however the most recent earnings are below average.
  • Hostess Brands's 1-year earnings growth is negative, it can't be compared to the 5-year average.
  • Hostess Brands's 1-year earnings growth is negative, it can't be compared to the US Food industry average.
Earnings and Revenue History
Hostess Brands's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Hostess Brands Company Filings, last reported 1 month ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqCM:TWNK Past Revenue, Cash Flow and Net Income Data
Date (Data in USD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2019-09-30 905.82 53.23 137.10
2019-06-30 889.60 52.38 132.34
2019-03-31 864.38 60.18 121.94
2018-12-31 850.39 62.90 117.90
2018-09-30 831.80 230.75 115.19
2018-06-30 813.06 232.36 115.56
2018-03-31 800.39 231.91 120.24
2017-12-31 776.19 223.90 118.03
2017-09-30 758.80 -37.61 120.37
2017-06-30 762.74 -15.97 118.83
2017-03-31 751.91 -6.18 115.93
2016-12-31 727.59 -4.40 109.15
2016-09-30 1,169.57 161.88 176.89
2015-12-31 620.82 84.25 94.26
2014-12-31 554.70 77.20 90.98

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Hostess Brands has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • Hostess Brands used its assets less efficiently than the US Food industry average last year based on Return on Assets.
  • Hostess Brands's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Hostess Brands's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Food industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Hostess Brands has a total score of 1/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

TWNK Health

 How is Hostess Brands's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Hostess Brands's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Hostess Brands is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Hostess Brands's long term commitments exceed its cash and other short term assets.
Balance sheet
This treemap shows a more detailed breakdown of Hostess Brands's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • Low level of unsold assets.
  • Debt is not covered by short term assets, assets are 0.4x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Hostess Brands Company Filings, last reported 1 month ago.

NasdaqCM:TWNK Past Debt and Equity Data
Date (Data in USD Millions) Total Equity Total Debt Cash & Short Term Investments
2019-09-30 1,557.27 980.20 266.87
2019-06-30 1,570.43 982.20 189.28
2019-03-31 1,576.36 984.85 160.48
2018-12-31 1,550.26 988.00 146.38
2018-09-30 1,535.53 990.80 127.40
2018-06-30 1,523.10 993.60 115.27
2018-03-31 1,501.92 996.39 100.45
2017-12-31 1,472.57 999.19 135.70
2017-09-30 1,285.24 999.93 101.17
2017-06-30 1,269.11 1,000.44 66.22
2017-03-31 1,256.13 1,001.40 45.68
2016-12-31 1,231.41 1,004.87 26.86
2016-09-30 5.00 0.18 0.01
2015-12-31 -660.12 1,202.92 64.47
2014-12-31
  • Hostess Brands's level of debt (62.9%) compared to net worth is high (greater than 40%).
  • Unable to establish if Hostess Brands's debt level has increased without past 5-year debt data.
  • Debt is not well covered by operating cash flow (14.4%, less than 20% of total debt).
  • Interest payments on debt are well covered by earnings (EBIT is 3.4x coverage).
X
Financial health checks
We assess Hostess Brands's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Hostess Brands has a total score of 2/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

TWNK Dividends

 What is Hostess Brands's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
0%
Current annual income from Hostess Brands dividends. Estimated to be 0% next year.
If you bought $2,000 of Hostess Brands shares you are expected to receive $0 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Unable to evaluate Hostess Brands's dividend yield against the bottom 25% of dividend payers as the company has not reported any payouts.
  • Unable to evaluate Hostess Brands's dividend against the top 25% market benchmark as the company has not reported any payouts.
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NasdaqCM:TWNK Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 8 Analyst Estimates (S&P Global) See Below
United States of America Food Industry Average Dividend Yield Market Cap Weighted Average of 29 Stocks 2.8%
United States of America Market Average Dividend Yield Market Cap Weighted Average of 1955 Stocks 2.3%
United States of America Minimum Threshold Dividend Yield 10th Percentile 0.8%
United States of America Bottom 25% Dividend Yield 25th Percentile 1.4%
United States of America Top 25% Dividend Yield 75th Percentile 3.6%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NasdaqCM:TWNK Future Dividends Estimate Data
Date (Data in $) Dividend per Share (annual) Avg. No. Analysts
2023-12-31
2022-12-31 0.00 1.00
2021-12-31 0.00 3.00
2020-12-31 0.00 3.00
2019-12-31 0.00 3.00
2019-11-18

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Unable to perform a dividend volatility check as Hostess Brands has not reported any payouts.
  • Unable to verify if Hostess Brands's dividend has been increasing as the company has not reported any payouts.
Current Payout to shareholders
What portion of Hostess Brands's earnings are paid to the shareholders as a dividend.
  • Unable to calculate sustainability of dividends as Hostess Brands has not reported any payouts.
Future Payout to shareholders
  • No need to calculate the sustainability of Hostess Brands's dividends in 3 years as they are not expected to pay a notable one for United States of America.
X
Income/ dividend checks
We assess Hostess Brands's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.8%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Hostess Brands afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Hostess Brands has a total score of 0/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

TWNK Management

 What is the CEO of Hostess Brands's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Andy Callahan
COMPENSATION $4,062,154
AGE 53
TENURE AS CEO 1.5 years
CEO Bio

Mr. Andrew P. Callahan, also known as Andy, has been a Director of Hostess Brands, Inc. since April 2018. He is also its President and CEO since May 07, 2018. He served as the President of North American Foodservice & International at Tyson Foods, Inc. since February 14, 2017 until August 2, 2017 and served as its President of Retail Packaged Brands from September 2014 to February 14, 2017. He served as an Executive Vice President and President of Retail at The Hillshire Brands Company since June 28, 2012 until its acquisition by Tyson in August 2014. He served as a Senior Vice President, Chief Customer Officer for Sara Lee Corporation’s North American operations from April 2011 to June 2012, President of Sara Lee’s North American Foodservice segment from November 2009 to April 2011 and Vice President of Marketing for Sara Lee’s breakfast and snacking business unit. Prior to Sara Lee, Mr. Callahan worked at Kraft Foods, Inc. (branded food products) for 13 years in various marketing, sales and general management positions, including Vice President, Customer Development on Kraft’s SUPERVALU business and General Manager of The Churny Company. Mr. Callahan spent seven years in the U.S. Navy as a Naval Flight Officer. Mr. Callahan previously served on the Board of Directors for the Grocery Manufacturers Association (GMA), the International Foodservice Manufacturers Association (IFMA), as well as the Make-A-Wish Foundation of Illinois. Mr. Callahan currently serves on the Rush University Hospital of Chicago Veterans Advisory Council.

CEO Compensation
  • Insufficient data for Andy to compare compensation growth.
  • Andy's remuneration is about average for companies of similar size in United States of America.
Management Team Tenure

Average tenure and age of the Hostess Brands management team in years:

2.5
Average Tenure
52
Average Age
  • The tenure for the Hostess Brands management team is about average.
Management Team

Andy Callahan

TITLE
President
COMPENSATION
$4M
AGE
53
TENURE
1.5 yrs

Tom Peterson

TITLE
Executive VP
COMPENSATION
$362K
AGE
46
TENURE
3 yrs

Andy Jacobs

TITLE
Executive VP & COO
COMPENSATION
$441K
AGE
51
TENURE
1.9 yrs

Michael Cramer

TITLE
Executive VP
COMPENSATION
$361K
AGE
66
TENURE
3 yrs

Jolyn Sebree

TITLE
Senior VP
COMPENSATION
$356K
AGE
47
TENURE
6.6 yrs

Chad Lusk

TITLE
Senior VP & Chief Marketing Officer
AGE
40
TENURE
0.6 yrs

Darryl Riley

TITLE
Senior Vice President of Quality
AGE
59
TENURE
3.7 yrs

John Kalal

TITLE
Senior Vice President of Bakery Operations & Supply Chain
AGE
56
TENURE
0.9 yrs
Board of Directors Tenure

Average tenure and age of the Hostess Brands board of directors in years:

3
Average Tenure
61
Average Age
  • The tenure for the Hostess Brands board of directors is about average.
Board of Directors

C. Metropoulos

TITLE
Non-Executive Chairman
COMPENSATION
$364K
AGE
73
TENURE
3 yrs

Andy Callahan

TITLE
President
COMPENSATION
$4M
AGE
53
TENURE
1.6 yrs

Larry Bodner

TITLE
Independent Director
COMPENSATION
$185K
AGE
56
TENURE
3 yrs

Neil DeFeo

TITLE
Independent Director
COMPENSATION
$176K
AGE
73
TENURE
3 yrs

Craig Steeneck

TITLE
Lead Independent Director
COMPENSATION
$182K
AGE
61
TENURE
0.8 yrs

Jerry Kaminski

TITLE
Independent Director
COMPENSATION
$176K
AGE
62
TENURE
3 yrs

Gretchen Crist

TITLE
Independent Director
COMPENSATION
$162K
AGE
51
TENURE
1.6 yrs
Who owns this company?
Recent Insider Trading
  • No 3 month open market individual insider trading information.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price ($) Value ($)
16. Aug 19 Sell Hostess CDM Co-Invest, LLC Company 15. Aug 19 15. Aug 19 -10,582,128 $14.00 $-148,149,792
16. Aug 19 Sell C. Metropoulos Individual 15. Aug 19 15. Aug 19 -455,400 $14.00 $-6,375,600
16. Aug 19 Sell CDM Hostess Class C, LLC Company 15. Aug 19 15. Aug 19 -962,472 $14.00 $-13,474,608
17. May 19 Sell Hostess CDM Co-Invest, LLC Company 17. May 19 17. May 19 -6,165,700 $13.31 $-82,065,467
17. May 19 Sell C. Metropoulos Individual 17. May 19 17. May 19 -1,834,300 $13.31 $-24,414,533
X
Management checks
We assess Hostess Brands's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Hostess Brands has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

TWNK News

Simply Wall St News

An Intrinsic Calculation For Hostess Brands, Inc. (NASDAQ:TWNK) Suggests It's 41% Undervalued

We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. … A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we discount the value of these future cash flows to their estimated value in today's dollars: 10-year free cash flow (FCF) estimate 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Levered FCF ($, Millions) $134.4m $147.1m $156.1m $165.3m $173.3m $180.6m $187.3m $193.8m $200.1m $206.2m Growth Rate Estimate Source Analyst x4 Analyst x3 Analyst x1 Analyst x1 Est @ 4.83% Est @ 4.2% Est @ 3.76% Est @ 3.45% Est @ 3.23% Est @ 3.08% Present Value ($, Millions) Discounted @ 7.86% $124.6 $126.4 $124.4 $122.1 $118.7 $114.7 $110.3 $105.8 $101.2 $96.8 ("Est" = FCF growth rate estimated by Simply Wall St) Present Value of 10-year Cash Flow (PVCF)= $1.1b We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. … NasdaqCM:TWNK Intrinsic value, August 28th 2019 Important assumptions Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows.

Simply Wall St -

Have Insiders Been Selling Hostess Brands, Inc. (NASDAQ:TWNK) Shares?

View our latest analysis for Hostess Brands The Last 12 Months Of Insider Transactions At Hostess Brands The Non-Executive Chairman, C. … NasdaqCM:TWNK Recent Insider Trading, August 15th 2019 Insider Ownership of Hostess Brands I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. … An insider hasn't bought Hostess Brands stock in the last three months, but there was some selling.

Simply Wall St -

Hostess Brands, Inc.’s (NASDAQ:TWNK) Investment Returns Are Lagging Its Industry

The formula for calculating the return on capital employed is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) Or for Hostess Brands: 0.047 = US$135m ÷ (US$3.0b - US$155m) (Based on the trailing twelve months to March 2019.) So, Hostess Brands has an ROCE of 4.7%. … What Are Current Liabilities, And How Do They Affect Hostess Brands's ROCE? … Due to the way ROCE is calculated, a high level of current liabilities makes a company look as though it has less capital employed, and thus can (sometimes unfairly) boost the ROCE.

Simply Wall St -

Is Hostess Brands, Inc. (NASDAQ:TWNK) Trading At A 27% Discount?

(NASDAQ:TWNK) as an investment opportunity by taking the expected future cash flows and discounting them to their present value. … Generally we assume that a dollar today is more valuable than a dollar in the future, and so the sum of these future cash flows is then discounted to today's value: 10-year free cash flow (FCF) estimate 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Levered FCF ($, Millions) $118.50 $130.00 $132.51 $135.38 $138.55 $141.95 $145.55 $149.33 $153.27 $157.35 Growth Rate Estimate Source Analyst x2 Analyst x2 Est @ 1.93% Est @ 2.17% Est @ 2.34% Est @ 2.46% Est @ 2.54% Est @ 2.6% Est @ 2.64% Est @ 2.66% Present Value ($, Millions) Discounted @ 7.8% $109.93 $111.88 $105.79 $100.26 $95.19 $90.47 $86.06 $81.91 $77.98 $74.27 Present Value of 10-year Cash Flow (PVCF)= $933.74m "Est" = FCF growth rate estimated by Simply Wall St The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. … In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 7.8%.

Simply Wall St -

Is Hostess Brands, Inc.'s (NASDAQ:TWNK) Growth Strong Enough To Justify Its May Share Price?

See our latest analysis for Hostess Brands? … What can we expect from Hostess Brands in the future. … Investors in Hostess Brands have been patiently waiting for the uptick in earnings.

Simply Wall St -

Hostess Brands, Inc. (NASDAQ:TWNK) Insiders Increased Their Holdings

So shareholders might well want to know whether insiders have been buying or selling shares in Hostess Brands, Inc. … The Last 12 Months Of Insider Transactions At Hostess Brands. … In the last twelve months Hostess Brands insiders were buying shares, but not selling

Simply Wall St -

Why You Should Care About Hostess Brands, Inc.’s (NASDAQ:TWNK) Low Return On Capital

To be precise, we'll consider its Return On Capital Employed (ROCE), as that will inform our view of the quality of the business. … What is Return On Capital Employed (ROCE)? … ROCE measures the amount of pre-tax profits a company can generate from the capital employed in its business.

Simply Wall St -

What Investors Should Know About Hostess Brands, Inc.'s (NASDAQ:TWNK) Financial Strength

While investors primarily focus on the growth potential and competitive landscape of the small-cap companies, they end up ignoring a key aspect, which could be the biggest threat to its existence: its financial health. … Evaluating financial health as part of your investment thesis is. … We'll look at some basic checks that can form a snapshot the company’s financial strength.

Simply Wall St -

Will Hostess Brands, Inc.'s (NASDAQ:TWNK) Earnings Grow In The Years Ahead?

The latest earnings release Hostess Brands, Inc.'s (NASDAQ:TWNK) announced in December 2018a

Simply Wall St -

Is Hostess Brands, Inc.'s (NASDAQ:TWNK) 5.3% ROE Worse Than Average?

We'll use ROE to examine Hostess Brands, Inc. … One way to conceptualize this, is that for each $1 of shareholders' equity it has, the company made $0.053 in profit. … Return on Equity = Net Profit ÷ Shareholders' Equity

Simply Wall St -

TWNK Company Info

Description

Hostess Brands, Inc., a packaged food company, develops, manufactures, markets, sells, and distributes fresh sweet baked goods in the United States. It primarily offer a range of snack cakes, donuts, sweet rolls, breakfast pastries, snack pies, and related products. The company operates in two segments, Sweet Baked Goods and In-Store Bakery. The Sweet Baked Goods segment offers fresh and frozen sweet baked goods and bread products under the Hostess, Dolly Madison, Cloverhill, and Big Texas brands, as well as store branded products. The In-Store Bakery segment primarily provides Superior on Main branded eclairs, madeleines, brownies, and iced cookies in the bakery section of grocery and club stores. The company was formerly known as Gores Holdings, Inc. and changed its name to Hostess Brands, Inc. in November 2016. Hostess Brands, Inc. was founded in 1919 and is headquartered in Kansas City, Missouri.

Details
Name: Hostess Brands, Inc.
TWNK
Exchange: NasdaqCM
Founded: 1919
$1,748,694,373
$1,621,900,356
130,402,265
Website: http://www.hostessbrands.com
Address: Hostess Brands, Inc.
1 East Armour Boulevard,
Kansas City,
Missouri, 64111,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NasdaqCM TWNK Class A Common Stock Nasdaq Capital Market US USD 23. Oct 2015
DB H1B Class A Common Stock Deutsche Boerse AG DE EUR 23. Oct 2015
Number of employees
Current staff
Staff numbers
2,000
Hostess Brands employees.
Industry
Packaged Foods and Meats
Food, Beverage & Tobacco
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/11/18 00:40
End of day share price update: 2019/11/15 00:00
Last estimates confirmation: 2019/11/11
Last earnings filing: 2019/11/06
Last earnings reported: 2019/09/30
Last annual earnings reported: 2018/12/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.