ALAMO GROUP INC (ALG) Stock Fundamental Analysis
NYSE:ALG - New York Stock Exchange, Inc. - US0113111076 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to ALG. ALG was compared to 127 industry peers in the Machinery industry. While ALG has a great health rating, its profitability is only average at the moment. ALG is valued correctly, 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.
ALG had positive earnings in each of the past 5 years.
In the past 5 years ALG always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.68%, ALG is in the better half of the industry, outperforming 68.50% of the companies in the same industry.
Looking at the Return On Equity, with a value of 10.94%, ALG is in line with its industry, outperforming 57.48% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 9.74%, ALG is in the better half of the industry, outperforming 66.93% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ALG is in line with the industry average of 10.78%.
| 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 (7.25%) which is comparable to the rest of the industry.
In the last couple of years the Profit Margin of ALG has grown nicely.
ALG's Operating Margin of 10.18% is in line compared to the rest of the industry. ALG outperforms 53.54% of its industry peers.
In the last couple of years the Operating Margin of ALG has grown nicely.
With a Gross Margin value of 25.33%, ALG is not doing good in the industry: 64.57% of the companies in the same industry are doing better.
ALG's Gross Margin has been stable in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), ALG is creating some value.
ALG has more shares outstanding than it did 1 year ago.
The number of shares outstanding for ALG has been increased compared to 5 years ago.
The debt/assets ratio for ALG has been reduced compared to a year ago.
2.2 Solvency
ALG has an Altman-Z score of 6.55. This indicates that ALG is financially healthy and has little risk of bankruptcy at the moment.
ALG's Altman-Z score of 6.55 is amongst the best of the industry. ALG outperforms 85.04% 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.
ALG's Debt to FCF ratio of 1.09 is amongst the best of the industry. ALG outperforms 83.46% of its industry peers.
ALG has a Debt/Equity ratio of 0.19. This is a healthy value indicating a solid balance between debt and equity.
ALG's Debt to Equity ratio of 0.19 is fine compared to the rest of the industry. ALG outperforms 71.65% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.19 | ||
| Debt/FCF | 1.09 | ||
| Altman-Z | 6.55 |
ROIC/WACC0.97
WACC10.02%
2.3 Liquidity
ALG has a Current Ratio of 4.30. This indicates that ALG is financially healthy and has no problem in meeting its short term obligations.
ALG's Current ratio of 4.30 is amongst the best of the industry. ALG outperforms 89.76% of its industry peers.
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 85.04% 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%.
The Earnings Per Share has been growing by 10.26% on average over the past years. This is quite good.
Looking at the last year, ALG shows a decrease in Revenue. The Revenue has decreased by -6.43% in the last year.
Measured over the past years, ALG shows a small growth in Revenue. The Revenue has been growing by 7.79% on average per year.
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
ALG is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.28% yearly.
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 Y12.9%
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
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.
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
Based on the Price/Earnings ratio of 23.37, the valuation of ALG can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of ALG is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 27.52, ALG is valued at the same level.
A Price/Forward Earnings ratio of 18.48 indicates a rather expensive valuation of ALG.
ALG's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 35.58, ALG is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.37 | ||
| Fwd PE | 18.48 |
4.2 Price Multiples
60.63% of the companies in the same industry are more expensive than ALG, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, ALG is valued cheaply inside the industry as 82.68% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.68 | ||
| EV/EBITDA | 12.73 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of ALG may justify a higher PE ratio.
ALG's earnings are expected to grow with 12.28% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.81
PEG (5Y)2.28
EPS Next 2Y12.28%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a yearly dividend of 0.53%, ALG is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.82, ALG has a dividend in line with its industry peers.
With a Dividend Yield of 0.53, ALG pays less dividend than the S&P500 average, which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.53% |
5.2 History
The dividend of ALG is nicely growing with an annual growth rate of 16.84%!
ALG has been paying a dividend for at least 10 years, so it has a reliable track record.
ALG has not decreased their dividend for at least 10 years, which is a reliable track record.
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
224.32
-1.62 (-0.72%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners86.82%
Inst Owner Change0%
Ins Owners1.13%
Ins Owner Change2.08%
Market Cap2.71B
Analysts80
Price Target221.85 (-1.1%)
Short Float %3.68%
Short Ratio3.69
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.53% |
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)6.88%
EPS NQ rev (1m)0%
EPS NQ rev (3m)10.66%
EPS NY rev (1m)-0.02%
EPS NY rev (3m)8.78%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.34%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.12%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.37 | ||
| Fwd PE | 18.48 | ||
| P/S | 1.7 | ||
| P/FCF | 13.68 | ||
| P/OCF | 12.17 | ||
| P/B | 2.57 | ||
| P/tB | 3.85 | ||
| EV/EBITDA | 12.73 |
EPS(TTM)9.6
EY4.28%
EPS(NY)12.14
Fwd EY5.41%
FCF(TTM)16.4
FCFY7.31%
OCF(TTM)18.43
OCFY8.22%
SpS131.83
BVpS87.43
TBVpS58.28
PEG (NY)1.81
PEG (5Y)2.28
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 | 6.55 |
F-Score6
WACC10.02%
ROIC/WACC0.97
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 Y12.9%
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%