ALAMO GROUP INC (ALG) Stock Fundamental Analysis
NYSE:ALG - New York Stock Exchange, Inc. - US0113111076 - Common Stock - Currency: USD
Taking everything into account, ALG scores 6 out of 10 in our fundamental rating. ALG was compared to 128 industry peers in the Machinery industry. While ALG has a great health rating, its profitability is only average at the moment. ALG has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year ALG was profitable.
In the past year ALG had a positive cash flow from operations.
Each year in the past 5 years ALG has been profitable.
In the past 5 years ALG always reported a positive cash flow from operatings.
1.2 Ratios
ALG has a Return On Assets of 7.68%. This is in the better half of the industry: ALG outperforms 70.31% of its industry peers.
ALG has a Return On Equity (10.94%) which is comparable to the rest of the industry.
ALG has a Return On Invested Capital of 9.74%. This is in the better half of the industry: ALG outperforms 67.97% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ALG is in line with the industry average of 10.30%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.68% | ||
| ROE | 10.94% | ||
| ROIC | 9.74% |
ROA(3y)8.48%
ROA(5y)7.45%
ROE(3y)12.99%
ROE(5y)11.88%
ROIC(3y)11.11%
ROIC(5y)9.98%
1.3 Margins
ALG has a Profit Margin of 7.25%. This is in the better half of the industry: ALG outperforms 60.94% of its industry peers.
ALG's Profit Margin has improved in the last couple of years.
ALG has a Operating Margin (10.18%) which is in line with its industry peers.
In the last couple of years the Operating Margin of ALG has grown nicely.
ALG's Gross Margin of 25.33% is on the low side compared to the rest of the industry. ALG is outperformed by 63.28% of its industry peers.
In the last couple of years the Gross Margin of ALG has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.18% | ||
| PM (TTM) | 7.25% | ||
| GM | 25.33% |
OM growth 3Y4.92%
OM growth 5Y3.6%
PM growth 3Y5.8%
PM growth 5Y4.77%
GM growth 3Y0.34%
GM growth 5Y0.72%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ALG is still creating some value.
ALG has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, ALG has more shares outstanding
ALG has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 6.14 indicates that ALG is not in any danger for bankruptcy at the moment.
ALG has a better Altman-Z score (6.14) than 82.81% of its industry peers.
ALG has a debt to FCF ratio of 1.09. This is a very positive value and a sign of high solvency as it would only need 1.09 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.09, ALG belongs to the top of the industry, outperforming 83.59% of the companies in the same industry.
A Debt/Equity ratio of 0.19 indicates that ALG is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.19, ALG is in the better half of the industry, outperforming 73.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.19 | ||
| Debt/FCF | 1.09 | ||
| Altman-Z | 6.14 |
ROIC/WACC0.96
WACC10.11%
2.3 Liquidity
A Current Ratio of 4.30 indicates that ALG has no problem at all paying its short term obligations.
With an excellent Current ratio value of 4.30, ALG belongs to the best of the industry, outperforming 89.06% of the companies in the same industry.
ALG has a Quick Ratio of 2.62. This indicates that ALG is financially healthy and has no problem in meeting its short term obligations.
ALG's Quick ratio of 2.62 is amongst the best of the industry. ALG outperforms 87.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.3 | ||
| Quick Ratio | 2.62 |
3. Growth
3.1 Past
ALG shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -14.59%.
Measured over the past years, ALG shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.26% on average per year.
The Revenue has decreased by -6.43% in the past year.
The Revenue has been growing slightly by 7.79% on average over the past years.
EPS 1Y (TTM)-14.59%
EPS 3Y13.14%
EPS 5Y10.26%
EPS Q2Q%-1.12%
Revenue 1Y (TTM)-6.43%
Revenue growth 3Y6.87%
Revenue growth 5Y7.79%
Sales Q2Q%-8.14%
3.2 Future
The Earnings Per Share is expected to grow by 12.28% on average over the next years. This is quite good.
Based on estimates for the next years, ALG will show a small growth in Revenue. The Revenue will grow by 1.88% on average per year.
EPS Next Y12.93%
EPS Next 2Y12.28%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year-1.15%
Revenue Next 2Y1.88%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same 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.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 21.02, ALG is valued on the expensive side.
ALG's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of ALG to the average of the S&P500 Index (26.20), we can say ALG is valued inline with the index average.
The Price/Forward Earnings ratio is 16.62, which indicates a correct valuation of ALG.
Based on the Price/Forward Earnings ratio, ALG is valued a bit cheaper than 62.50% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ALG to the average of the S&P500 Index (22.13), we can say ALG is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.02 | ||
| Fwd PE | 16.62 |
4.2 Price Multiples
ALG's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ALG is cheaper than 65.63% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ALG indicates a rather cheap valuation: ALG is cheaper than 85.16% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.31 | ||
| EV/EBITDA | 11.3 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
ALG has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as ALG's earnings are expected to grow with 12.28% in the coming years.
PEG (NY)1.63
PEG (5Y)2.05
EPS Next 2Y12.28%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a yearly dividend of 0.60%, ALG is not a good candidate for dividend investing.
ALG's Dividend Yield is comparable with the industry average which is at 1.90.
Compared to an average S&P500 Dividend Yield of 2.40, ALG's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.6% |
5.2 History
The dividend of ALG is nicely growing with an annual growth rate of 16.84%!
ALG has paid a dividend for at least 10 years, which is a reliable track record.
ALG has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)16.84%
Div Incr Years10
Div Non Decr Years24
5.3 Sustainability
11.19% of the earnings are spent on dividend by ALG. This is a low number and sustainable payout ratio.
The dividend of ALG is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP11.19%
EPS Next 2Y12.28%
EPS Next 3YN/A
201.8
+1.4 (+0.7%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners85.04%
Inst Owner Change4.11%
Ins Owners0.99%
Ins Owner Change2.09%
Market Cap2.44B
Analysts80
Price Target207.57 (2.86%)
Short Float %3.5%
Short Ratio3.35
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.6% |
Yearly Dividend1.04
Dividend Growth(5Y)16.84%
DP11.19%
Div Incr Years10
Div Non Decr Years24
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.89%
Min EPS beat(2)2.42%
Max EPS beat(2)15.36%
EPS beat(4)2
Avg EPS beat(4)-1%
Min EPS beat(4)-14.4%
Max EPS beat(4)15.36%
EPS beat(8)4
Avg EPS beat(8)0.6%
EPS beat(12)7
Avg EPS beat(12)5.53%
EPS beat(16)9
Avg EPS beat(16)3.78%
Revenue beat(2)0
Avg Revenue beat(2)-2.44%
Min Revenue beat(2)-3.87%
Max Revenue beat(2)-1.02%
Revenue beat(4)0
Avg Revenue beat(4)-2.61%
Min Revenue beat(4)-3.87%
Max Revenue beat(4)-1.02%
Revenue beat(8)3
Avg Revenue beat(8)-0.6%
Revenue beat(12)6
Avg Revenue beat(12)0.3%
Revenue beat(16)9
Avg Revenue beat(16)1.15%
PT rev (1m)0%
PT rev (3m)-7.6%
EPS NQ rev (1m)10.66%
EPS NQ rev (3m)1.12%
EPS NY rev (1m)9.22%
EPS NY rev (3m)-0.78%
Revenue NQ rev (1m)0.34%
Revenue NQ rev (3m)-3.03%
Revenue NY rev (1m)0.12%
Revenue NY rev (3m)-1.86%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.02 | ||
| Fwd PE | 16.62 | ||
| P/S | 1.53 | ||
| P/FCF | 12.31 | ||
| P/OCF | 10.95 | ||
| P/B | 2.31 | ||
| P/tB | 3.46 | ||
| EV/EBITDA | 11.3 |
EPS(TTM)9.6
EY4.76%
EPS(NY)12.14
Fwd EY6.02%
FCF(TTM)16.4
FCFY8.13%
OCF(TTM)18.43
OCFY9.13%
SpS131.83
BVpS87.43
TBVpS58.28
PEG (NY)1.63
PEG (5Y)2.05
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.68% | ||
| ROE | 10.94% | ||
| ROCE | 12.55% | ||
| ROIC | 9.74% | ||
| ROICexc | 11.53% | ||
| ROICexgc | 17.02% | ||
| OM | 10.18% | ||
| PM (TTM) | 7.25% | ||
| GM | 25.33% | ||
| FCFM | 12.44% |
ROA(3y)8.48%
ROA(5y)7.45%
ROE(3y)12.99%
ROE(5y)11.88%
ROIC(3y)11.11%
ROIC(5y)9.98%
ROICexc(3y)12.08%
ROICexc(5y)10.73%
ROICexgc(3y)18.15%
ROICexgc(5y)16.79%
ROCE(3y)14.31%
ROCE(5y)12.86%
ROICexcg growth 3Y5.21%
ROICexcg growth 5Y8.14%
ROICexc growth 3Y8.81%
ROICexc growth 5Y10.49%
OM growth 3Y4.92%
OM growth 5Y3.6%
PM growth 3Y5.8%
PM growth 5Y4.77%
GM growth 3Y0.34%
GM growth 5Y0.72%
F-Score6
Asset Turnover1.06
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.19 | ||
| Debt/FCF | 1.09 | ||
| Debt/EBITDA | 0.93 | ||
| Cap/Depr | 45.87% | ||
| Cap/Sales | 1.54% | ||
| Interest Coverage | 8.92 | ||
| Cash Conversion | 103.23% | ||
| Profit Quality | 171.5% | ||
| Current Ratio | 4.3 | ||
| Quick Ratio | 2.62 | ||
| Altman-Z | 6.14 |
F-Score6
WACC10.11%
ROIC/WACC0.96
Cap/Depr(3y)64.41%
Cap/Depr(5y)58.21%
Cap/Sales(3y)1.95%
Cap/Sales(5y)1.86%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-14.59%
EPS 3Y13.14%
EPS 5Y10.26%
EPS Q2Q%-1.12%
EPS Next Y12.93%
EPS Next 2Y12.28%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-6.43%
Revenue growth 3Y6.87%
Revenue growth 5Y7.79%
Sales Q2Q%-8.14%
Revenue Next Year-1.15%
Revenue Next 2Y1.88%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-17.19%
EBIT growth 3Y12.13%
EBIT growth 5Y11.67%
EBIT Next Year38.46%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y469.75%
FCF growth 3Y96.3%
FCF growth 5Y26.31%
OCF growth 1Y215.21%
OCF growth 3Y61.61%
OCF growth 5Y18.76%