Stock Analysis: Decent Value Stocks

Fundamental Rating

We assign a fundamental rating of 7 out of 10 to ABX. ABX was compared to 811 industry peers in the Metals & Mining industry. ABX scores excellent on profitability, but there are some minor concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on ABX. These ratings would make ABX suitable for value investing!

1. Profitability

1.1 Basic Checks

ABX had positive earnings in the past year.

In the past year ABX had a positive cash flow from operations.

Each year in the past 5 years ABX has been profitable.

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

1.2 Ratios

ABX has a better Return On Assets (4.50%) than 90.38% of its industry peers.

Looking at the Return On Equity, with a value of 8.83%, ABX belongs to the top of the industry, outperforming 92.11% of the companies in the same industry.

ABX has a Return On Invested Capital of 6.58%. This is amongst the best in the industry. ABX outperforms 92.85% of its industry peers.

The Average Return On Invested Capital over the past 3 years for ABX is significantly below the industry average of 24.67%.

The last Return On Invested Capital (6.58%) for ABX is above the 3 year average (5.32%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	4.5%
ROE	8.83%
ROIC	6.58%

ROA(3y)2.74%

ROA(5y)3.51%

ROE(3y)5.39%

ROE(5y)6.92%

ROIC(3y)5.32%

ROIC(5y)5.94%

1.3 Margins

Looking at the Profit Margin, with a value of 16.59%, ABX belongs to the top of the industry, outperforming 94.57% of the companies in the same industry.

In the last couple of years the Profit Margin of ABX has declined.

ABX has a better Operating Margin (33.59%) than 96.67% of its industry peers.

In the last couple of years the Operating Margin of ABX has grown nicely.

The Gross Margin of ABX (38.39%) is better than 93.96% of its industry peers.

ABX's Gross Margin has improved in the last couple of years.

		Industry Rank	Sector Rank
OM	33.59%
PM (TTM)	16.59%
GM	38.39%

OM growth 3Y-2.73%

OM growth 5Y7.55%

PM growth 3Y-0.55%

PM growth 5Y-16.49%

GM growth 3Y-2.05%

GM growth 5Y5.86%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ABX is destroying value.

Compared to 1 year ago, ABX has less shares outstanding

ABX has less shares outstanding than it did 5 years ago.

The debt/assets ratio for ABX has been reduced compared to a year ago.

2.2 Solvency

Based on the Altman-Z score of 1.36, we must say that ABX is in the distress zone and has some risk of bankruptcy.

The Altman-Z score of ABX (1.36) is comparable to the rest of the industry.

ABX has a debt to FCF ratio of 3.59. This is a good value and a sign of high solvency as ABX would need 3.59 years to pay back of all of its debts.

The Debt to FCF ratio of ABX (3.59) is better than 92.60% of its industry peers.

A Debt/Equity ratio of 0.19 indicates that ABX is not too dependend on debt financing.

ABX's Debt to Equity ratio of 0.19 is on the low side compared to the rest of the industry. ABX is outperformed by 65.72% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.19
Debt/FCF	3.59
Altman-Z	1.36

ROIC/WACC0.74

WACC8.85%

2.3 Liquidity

ABX has a Current Ratio of 2.89. This indicates that ABX is financially healthy and has no problem in meeting its short term obligations.

The Current ratio of ABX (2.89) is better than 64.24% of its industry peers.

A Quick Ratio of 2.15 indicates that ABX has no problem at all paying its short term obligations.

With a Quick ratio value of 2.15, ABX perfoms like the industry average, outperforming 58.69% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	2.89
Quick Ratio	2.15

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 51.19% over the past year.

ABX shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 19.55% yearly.

The Revenue has grown by 13.38% in the past year. This is quite good.

ABX shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.87% yearly.

EPS 1Y (TTM)51.19%

EPS 3Y2.77%

EPS 5Y19.55%

EPS Q2Q%70.37%

Revenue 1Y (TTM)13.38%

Revenue growth 3Y2.54%

Revenue growth 5Y5.87%

Sales Q2Q%19.16%

3.2 Future

The Earnings Per Share is expected to grow by 8.03% on average over the next years. This is quite good.

The Revenue is expected to grow by 2.49% on average over the next years.

EPS Next Y27.68%

EPS Next 2Y21.39%

EPS Next 3Y14.5%

EPS Next 5Y8.03%

Revenue Next Year7.96%

Revenue Next 2Y8.71%

Revenue Next 3Y7.07%

Revenue Next 5Y2.49%

3.3 Evolution

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

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

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 14.44, ABX is valued correctly.

ABX's Price/Earnings ratio is rather cheap when compared to the industry. ABX is cheaper than 92.11% of the companies in the same industry.

Compared to an average S&P500 Price/Earnings ratio of 28.22, ABX is valued a bit cheaper.

With a Price/Forward Earnings ratio of 11.34, the valuation of ABX can be described as very reasonable.

Based on the Price/Forward Earnings ratio, ABX is valued cheaper than 91.99% of the companies in the same industry.

Compared to an average S&P500 Price/Forward Earnings ratio of 20.86, ABX is valued a bit cheaper.

		Industry Rank	Sector Rank
PE	14.44
Fwd PE	11.34

4.2 Price Multiples

95.31% of the companies in the same industry are more expensive than ABX, based on the Enterprise Value to EBITDA ratio.

Based on the Price/Free Cash Flow ratio, ABX is valued cheaper than 93.22% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	24.11
EV/EBITDA	5.18

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.

ABX has an outstanding profitability rating, which may justify a higher PE ratio.

A more expensive valuation may be justified as ABX's earnings are expected to grow with 14.50% in the coming years.

PEG (NY)0.52

PEG (5Y)0.74

EPS Next 2Y21.39%

EPS Next 3Y14.5%

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5. Dividend

5.1 Amount

ABX has a Yearly Dividend Yield of 2.13%.

ABX's Dividend Yield is rather good when compared to the industry average which is at 2.90. ABX pays more dividend than 97.53% of the companies in the same industry.

ABX's Dividend Yield is comparable with the S&P500 average which is at 2.44.

		Industry Rank	Sector Rank
Dividend Yield	2.13%

5.2 History

The dividend of ABX has a limited annual growth rate of 1.45%.

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

ABX has decreased its dividend recently.

Dividend Growth(5Y)1.45%

Div Incr Years0

Div Non Decr Years1

5.3 Sustainability

ABX pays out 32.46% of its income as dividend. This is a sustainable payout ratio.

ABX's earnings are growing more than its dividend. This makes the dividend growth sustainable.

DP32.46%

EPS Next 2Y21.39%

EPS Next 3Y14.5%

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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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