Decent Value Stocks. Analyze the stocks with a good fundamental valuation, while still showing decent profitability, health and growth.


TENARIS SA-ADR

New York Stock Exchange, Inc. / Energy / Energy Equipment & Services

Fundamental Rating

8

We assign a fundamental rating of 8 out of 10 to TS. TS was compared to 65 industry peers in the Energy Equipment & Services industry. TS scores excellent points on both the profitability and health parts. This is a solid base for a good stock. TS may be a bit undervalued, certainly considering the very reasonable score on growth This makes TS very considerable for value and quality investing!



9

1. Profitability

1.1 Basic Checks

TS had positive earnings in the past year.
TS had a positive operating cash flow in the past year.
Of the past 5 years TS 4 years were profitable.
TS had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

The Return On Assets of TS (18.58%) is better than 96.92% of its industry peers.
With an excellent Return On Equity value of 23.26%, TS belongs to the best of the industry, outperforming 87.69% of the companies in the same industry.
TS's Return On Invested Capital of 19.52% is amongst the best of the industry. TS outperforms 98.46% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TS is significantly above the industry average of 8.27%.
The last Return On Invested Capital (19.52%) for TS is above the 3 year average (13.95%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 18.58%
ROE 23.26%
ROIC 19.52%
ROA(3y)13.58%
ROA(5y)8.23%
ROE(3y)16.94%
ROE(5y)10.28%
ROIC(3y)13.95%
ROIC(5y)N/A

1.3 Margins

TS has a Profit Margin of 26.35%. This is amongst the best in the industry. TS outperforms 96.92% of its industry peers.
TS's Profit Margin has improved in the last couple of years.
The Operating Margin of TS (28.80%) is better than 95.38% of its industry peers.
TS's Operating Margin has improved in the last couple of years.
The Gross Margin of TS (41.70%) is better than 84.62% of its industry peers.
TS's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 28.8%
PM (TTM) 26.35%
GM 41.7%
OM growth 3YN/A
OM growth 5Y20.38%
PM growth 3YN/A
PM growth 5Y18.16%
GM growth 3Y26.53%
GM growth 5Y6.06%

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10

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), TS is creating value.
TS has less shares outstanding than it did 1 year ago.
TS has less shares outstanding than it did 5 years ago.
The debt/assets ratio for TS has been reduced compared to a year ago.

2.2 Solvency

An Altman-Z score of 5.76 indicates that TS is not in any danger for bankruptcy at the moment.
The Altman-Z score of TS (5.76) is better than 95.38% of its industry peers.
TS has a debt to FCF ratio of 0.19. This is a very positive value and a sign of high solvency as it would only need 0.19 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 0.19, TS belongs to the best of the industry, outperforming 93.85% of the companies in the same industry.
TS has a Debt/Equity ratio of 0.01. This is a healthy value indicating a solid balance between debt and equity.
With an excellent Debt to Equity ratio value of 0.01, TS belongs to the best of the industry, outperforming 89.23% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.01
Debt/FCF 0.19
Altman-Z 5.76
ROIC/WACC2.66
WACC7.33%

2.3 Liquidity

A Current Ratio of 3.62 indicates that TS has no problem at all paying its short term obligations.
TS has a better Current ratio (3.62) than 90.77% of its industry peers.
TS has a Quick Ratio of 2.27. This indicates that TS is financially healthy and has no problem in meeting its short term obligations.
TS's Quick ratio of 2.27 is amongst the best of the industry. TS outperforms 83.08% of its industry peers.
Industry RankSector Rank
Current Ratio 3.62
Quick Ratio 2.27

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5

3. Growth

3.1 Past

TS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 54.17%, which is quite impressive.
TS shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 35.10% yearly.
The Revenue has grown by 26.41% in the past year. This is a very strong growth!
TS shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.19% yearly.
EPS 1Y (TTM)54.17%
EPS 3YN/A
EPS 5Y35.1%
EPS growth Q2Q41.18%
Revenue 1Y (TTM)26.41%
Revenue growth 3Y42.42%
Revenue growth 5Y14.19%
Revenue growth Q2Q-5.67%

3.2 Future

Based on estimates for the next years, TS will show a very negative growth in Earnings Per Share. The EPS will decrease by -14.80% on average per year.
The Revenue is expected to decrease by -3.60% on average over the next years.
EPS Next Y-34.71%
EPS Next 2Y-20.64%
EPS Next 3Y-15.34%
EPS Next 5Y-14.8%
Revenue Next Year-9.67%
Revenue Next 2Y-5.39%
Revenue Next 3Y-3.38%
Revenue Next 5Y-3.6%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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8

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 5.24 indicates a rather cheap valuation of TS.
100.00% of the companies in the same industry are more expensive than TS, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 28.91, TS is valued rather cheaply.
The Price/Forward Earnings ratio is 8.03, which indicates a very decent valuation of TS.
TS's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. TS is cheaper than 78.46% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.51, TS is valued rather cheaply.
Industry RankSector Rank
PE 5.24
Fwd PE 8.03

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, TS is valued cheaper than 95.38% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, TS is valued cheaply inside the industry as 90.77% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 5.37
EV/EBITDA 2.97

4.3 Compensation for Growth

TS has an outstanding profitability rating, which may justify a higher PE ratio.
TS's earnings are expected to decrease with -15.34% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)0.15
EPS Next 2Y-20.64%
EPS Next 3Y-15.34%

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5

5. Dividend

5.1 Amount

TS has a Yearly Dividend Yield of 3.49%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.22, TS pays a better dividend. On top of this TS pays more dividend than 92.31% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, TS pays a bit more dividend than the S&P500 average.
Industry RankSector Rank
Dividend Yield 3.49%

5.2 History

The dividend of TS has a limited annual growth rate of 5.74%.
TS has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of TS decreased in the last 3 years.
Dividend Growth(5Y)5.74%
Div Incr Years2
Div Non Decr Years2

5.3 Sustainability

TS pays out 16.25% of its income as dividend. This is a sustainable payout ratio.
DP16.25%
EPS Next 2Y-20.64%
EPS Next 3Y-15.34%

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