Stock Analysis: Affordable Growth

Fundamental Rating

Overall AGI gets a fundamental rating of 7 out of 10. We evaluated AGI against 802 industry peers in the Metals & Mining industry. While AGI belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. AGI is evaluated to be cheap and growing strongly. This does not happen too often! These ratings could make AGI a good candidate for value and growth investing.

1. Profitability

1.1 Basic Checks

In the past year AGI was profitable.

AGI had a positive operating cash flow in the past year.

Of the past 5 years AGI 4 years were profitable.

AGI had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

The Return On Assets of AGI (5.33%) is better than 90.90% of its industry peers.

With an excellent Return On Equity value of 7.93%, AGI belongs to the best of the industry, outperforming 91.52% of the companies in the same industry.

AGI has a Return On Invested Capital of 6.59%. This is amongst the best in the industry. AGI outperforms 93.02% of its industry peers.

AGI had an Average Return On Invested Capital over the past 3 years of 5.13%. This is significantly below the industry average of 24.51%.

The last Return On Invested Capital (6.59%) for AGI is above the 3 year average (5.13%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	5.33%
ROE	7.93%
ROIC	6.59%

ROA(3y)3.86%

ROA(5y)2.74%

ROE(3y)5.49%

ROE(5y)3.82%

ROIC(3y)5.13%

ROIC(5y)4.82%

1.3 Margins

AGI has a better Profit Margin (21.11%) than 95.64% of its industry peers.

AGI's Profit Margin has improved in the last couple of years.

AGI's Operating Margin of 37.48% is amongst the best of the industry. AGI outperforms 97.38% of its industry peers.

AGI's Operating Margin has improved in the last couple of years.

AGI's Gross Margin of 44.23% is amongst the best of the industry. AGI outperforms 95.01% of its industry peers.

AGI's Gross Margin has declined in the last couple of years.

		Industry Rank	Sector Rank
OM	37.48%
PM (TTM)	21.11%
GM	44.23%

OM growth 3Y8.87%

OM growth 5Y15.23%

PM growth 3YN/A

PM growth 5Y8.45%

GM growth 3Y-7.51%

GM growth 5Y-1.55%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

AGI has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.

The number of shares outstanding for AGI has been increased compared to 1 year ago.

Compared to 5 years ago, AGI has more shares outstanding

The debt/assets ratio for AGI is higher compared to a year ago.

2.2 Solvency

An Altman-Z score of 4.37 indicates that AGI is not in any danger for bankruptcy at the moment.

AGI has a better Altman-Z score (4.37) than 66.21% of its industry peers.

The Debt to FCF ratio of AGI is 1.18, which is an excellent value as it means it would take AGI, only 1.18 years of fcf income to pay off all of its debts.

Looking at the Debt to FCF ratio, with a value of 1.18, AGI belongs to the top of the industry, outperforming 94.51% of the companies in the same industry.

A Debt/Equity ratio of 0.08 indicates that AGI is not too dependend on debt financing.

AGI has a Debt to Equity ratio of 0.08. This is in the lower half of the industry: AGI underperforms 60.10% of its industry peers.

Although AGI does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.

		Industry Rank	Sector Rank
Debt/Equity	0.08
Debt/FCF	1.18
Altman-Z	4.37

ROIC/WACC0.74

WACC8.89%

2.3 Liquidity

AGI has a Current Ratio of 1.51. This is a normal value and indicates that AGI is financially healthy and should not expect problems in meeting its short term obligations.

Looking at the Current ratio, with a value of 1.51, AGI is in line with its industry, outperforming 49.75% of the companies in the same industry.

A Quick Ratio of 0.96 indicates that AGI may have some problems paying its short term obligations.

AGI has a Quick ratio (0.96) which is comparable to the rest of the industry.

The current and quick ratio evaluation for AGI is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

		Industry Rank	Sector Rank
Current Ratio	1.51
Quick Ratio	0.96

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

AGI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 51.85%, which is quite impressive.

AGI shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 29.78% yearly.

Looking at the last year, AGI shows a very strong growth in Revenue. The Revenue has grown by 31.62%.

AGI shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.54% yearly.

EPS 1Y (TTM)51.85%

EPS 3Y24.47%

EPS 5Y29.78%

EPS Q2Q%7.69%

Revenue 1Y (TTM)31.62%

Revenue growth 3Y17.82%

Revenue growth 5Y14.54%

Sales Q2Q%19.96%

3.2 Future

AGI is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 33.73% yearly.

The Revenue is expected to grow by 17.19% on average over the next years. This is quite good.

EPS Next Y52.75%

EPS Next 2Y35.52%

EPS Next 3Y27.61%

EPS Next 5Y33.73%

Revenue Next Year25.41%

Revenue Next 2Y17.5%

Revenue Next 3Y14.21%

Revenue Next 5Y17.19%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.

When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 33.22, which means the current valuation is very expensive for AGI.

AGI's Price/Earnings ratio is rather cheap when compared to the industry. AGI is cheaper than 88.15% of the companies in the same industry.

The average S&P500 Price/Earnings ratio is at 23.99. AGI is valued slightly more expensive when compared to this.

A Price/Forward Earnings ratio of 18.29 indicates a rather expensive valuation of AGI.

Compared to the rest of the industry, the Price/Forward Earnings ratio of AGI indicates a rather cheap valuation: AGI is cheaper than 89.90% of the companies listed in the same industry.

When comparing the Price/Forward Earnings ratio of AGI to the average of the S&P500 Index (20.35), we can say AGI is valued inline with the index average.

		Industry Rank	Sector Rank
PE	33.22
Fwd PE	18.29

4.2 Price Multiples

AGI's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. AGI is cheaper than 90.52% of the companies in the same industry.

Based on the Price/Free Cash Flow ratio, AGI is valued cheaply inside the industry as 92.14% of the companies are valued more expensively.

		Industry Rank	Sector Rank
P/FCF	46.98
EV/EBITDA	15.69

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.

The excellent profitability rating of AGI may justify a higher PE ratio.

AGI's earnings are expected to grow with 27.61% in the coming years. This may justify a more expensive valuation.

PEG (NY)0.63

PEG (5Y)1.12

EPS Next 2Y35.52%

EPS Next 3Y27.61%

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5. Dividend

5.1 Amount

With a yearly dividend of 0.38%, AGI is not a good candidate for dividend investing.

AGI's Dividend Yield is rather good when compared to the industry average which is at 2.90. AGI pays more dividend than 94.39% of the companies in the same industry.

With a Dividend Yield of 0.38, AGI pays less dividend than the S&P500 average, which is at 2.44.

		Industry Rank	Sector Rank
Dividend Yield	0.38%

5.2 History

The dividend of AGI is nicely growing with an annual growth rate of 16.57%!

AGI has been paying a dividend for at least 10 years, so it has a reliable track record.

AGI has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.

Dividend Growth(5Y)16.57%

Div Incr Years0

Div Non Decr Years7

5.3 Sustainability

AGI pays out 12.35% of its income as dividend. This is a sustainable payout ratio.

The dividend of AGI is growing, but earnings are growing more, so the dividend growth is sustainable.

DP12.35%

EPS Next 2Y35.52%

EPS Next 3Y27.61%

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Toronto Stock Exchange / Materials / Metals & Mining

1. Profitability

1.1 Basic Checks

1.2 Ratios

1.3 Margins

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2. Health

2.1 Basic Checks

2.2 Solvency

2.3 Liquidity

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3. Growth

3.1 Past

3.2 Future

3.3 Evolution

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4. Valuation

4.1 Price/Earnings Ratio

4.2 Price Multiples

4.3 Compensation for Growth

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5. Dividend

5.1 Amount

5.2 History

5.3 Sustainability

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