ARMSTRONG WORLD INDUSTRIES (AWI) Stock Fundamental Analysis
NYSE:AWI - New York Stock Exchange, Inc. - US04247X1028 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to AWI. AWI was compared to 41 industry peers in the Building Products industry. While AWI belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. AWI is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year AWI was profitable.
In the past year AWI had a positive cash flow from operations.
Of the past 5 years AWI 4 years were profitable.
In the past 5 years AWI always reported a positive cash flow from operatings.
1.2 Ratios
AWI's Return On Assets of 14.78% is amongst the best of the industry. AWI outperforms 85.37% of its industry peers.
The Return On Equity of AWI (34.55%) is better than 85.37% of its industry peers.
Looking at the Return On Invested Capital, with a value of 13.45%, AWI is in the better half of the industry, outperforming 73.17% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for AWI is in line with the industry average of 12.62%.
The 3 year average ROIC (11.73%) for AWI is below the current ROIC(13.45%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.78% | ||
| ROE | 34.55% | ||
| ROIC | 13.45% |
ROA(3y)13.26%
ROA(5y)8.94%
ROE(3y)36.91%
ROE(5y)24.8%
ROIC(3y)11.73%
ROIC(5y)10.44%
1.3 Margins
With an excellent Profit Margin value of 18.25%, AWI belongs to the best of the industry, outperforming 92.68% of the companies in the same industry.
In the last couple of years the Profit Margin of AWI has declined.
Looking at the Operating Margin, with a value of 19.20%, AWI belongs to the top of the industry, outperforming 80.49% of the companies in the same industry.
In the last couple of years the Operating Margin of AWI has declined.
Looking at the Gross Margin, with a value of 40.44%, AWI is in the better half of the industry, outperforming 75.61% of the companies in the same industry.
AWI's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.2% | ||
| PM (TTM) | 18.25% | ||
| GM | 40.44% |
OM growth 3Y6.93%
OM growth 5Y-2.19%
PM growth 3Y3.44%
PM growth 5Y-2.33%
GM growth 3Y3.17%
GM growth 5Y1.13%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so AWI is still creating some value.
The number of shares outstanding for AWI has been reduced compared to 1 year ago.
The number of shares outstanding for AWI has been reduced compared to 5 years ago.
The debt/assets ratio for AWI has been reduced compared to a year ago.
2.2 Solvency
AWI has an Altman-Z score of 6.80. This indicates that AWI is financially healthy and has little risk of bankruptcy at the moment.
AWI has a Altman-Z score of 6.80. This is in the better half of the industry: AWI outperforms 73.17% of its industry peers.
AWI has a debt to FCF ratio of 2.86. This is a good value and a sign of high solvency as AWI would need 2.86 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 2.86, AWI is doing good in the industry, outperforming 68.29% of the companies in the same industry.
AWI has a Debt/Equity ratio of 0.67. This is a neutral value indicating AWI is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.67, AWI perfoms like the industry average, outperforming 41.46% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 2.86 | ||
| Altman-Z | 6.8 |
ROIC/WACC1.34
WACC10.05%
2.3 Liquidity
AWI has a Current Ratio of 1.60. This is a normal value and indicates that AWI is financially healthy and should not expect problems in meeting its short term obligations.
AWI's Current ratio of 1.60 is on the low side compared to the rest of the industry. AWI is outperformed by 70.73% of its industry peers.
AWI has a Quick Ratio of 1.10. This is a normal value and indicates that AWI is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.10, AWI is not doing good in the industry: 63.41% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.6 | ||
| Quick Ratio | 1.1 |
3. Growth
3.1 Past
AWI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 18.10%, which is quite good.
AWI shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.36% yearly.
Looking at the last year, AWI shows a quite strong growth in Revenue. The Revenue has grown by 14.55% in the last year.
Measured over the past years, AWI shows a small growth in Revenue. The Revenue has been growing by 6.85% on average per year.
EPS 1Y (TTM)18.1%
EPS 3Y13.99%
EPS 5Y5.36%
EPS Q2Q%20.29%
Revenue 1Y (TTM)14.55%
Revenue growth 3Y9.32%
Revenue growth 5Y6.85%
Sales Q2Q%17.28%
3.2 Future
Based on estimates for the next years, AWI will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.46% on average per year.
Based on estimates for the next years, AWI will show a quite strong growth in Revenue. The Revenue will grow by 8.39% on average per year.
EPS Next Y12%
EPS Next 2Y12.3%
EPS Next 3Y13.46%
EPS Next 5YN/A
Revenue Next Year11.77%
Revenue Next 2Y8.85%
Revenue Next 3Y8.39%
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 accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
AWI is valuated quite expensively with a Price/Earnings ratio of 25.50.
The rest of the industry has a similar Price/Earnings ratio as AWI.
AWI is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 21.12, AWI is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AWI is on the same level as its industry peers.
AWI is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.5 | ||
| Fwd PE | 21.12 |
4.2 Price Multiples
AWI's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. AWI is more expensive than 65.85% of the companies in the same industry.
60.98% of the companies in the same industry are cheaper than AWI, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 37.58 | ||
| EV/EBITDA | 19.77 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
AWI has a very decent profitability rating, which may justify a higher PE ratio.
AWI's earnings are expected to grow with 13.46% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.12
PEG (5Y)4.76
EPS Next 2Y12.3%
EPS Next 3Y13.46%
5. Dividend
5.1 Amount
With a yearly dividend of 0.73%, AWI is not a good candidate for dividend investing.
AWI's Dividend Yield is comparable with the industry average which is at 1.14.
Compared to an average S&P500 Dividend Yield of 2.37, AWI's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.73% |
5.2 History
The dividend of AWI is nicely growing with an annual growth rate of 9.49%!
AWI has been paying a dividend for over 5 years, so it has already some track record.
AWI has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)9.49%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
AWI pays out 18.86% of its income as dividend. This is a sustainable payout ratio.
AWI's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP18.86%
EPS Next 2Y12.3%
EPS Next 3Y13.46%
168.06
-1.55 (-0.91%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners103.08%
Inst Owner Change-0.02%
Ins Owners1.04%
Ins Owner Change0.96%
Market Cap7.30B
Analysts75
Price Target164.99 (-1.83%)
Short Float %1.88%
Short Ratio2.68
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.73% |
Yearly Dividend1.16
Dividend Growth(5Y)9.49%
DP18.86%
Div Incr Years6
Div Non Decr Years6
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.45%
Min EPS beat(2)7.25%
Max EPS beat(2)7.65%
EPS beat(4)4
Avg EPS beat(4)5.14%
Min EPS beat(4)2.19%
Max EPS beat(4)7.65%
EPS beat(8)8
Avg EPS beat(8)9.17%
EPS beat(12)9
Avg EPS beat(12)4.67%
EPS beat(16)11
Avg EPS beat(16)2.94%
Revenue beat(2)2
Avg Revenue beat(2)2.82%
Min Revenue beat(2)2.24%
Max Revenue beat(2)3.4%
Revenue beat(4)3
Avg Revenue beat(4)1.24%
Min Revenue beat(4)-1.01%
Max Revenue beat(4)3.4%
Revenue beat(8)6
Avg Revenue beat(8)0.93%
Revenue beat(12)8
Avg Revenue beat(12)0.35%
Revenue beat(16)10
Avg Revenue beat(16)0.36%
PT rev (1m)0.62%
PT rev (3m)-1.37%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.43%
EPS NY rev (1m)0%
EPS NY rev (3m)0.19%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.44%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.5 | ||
| Fwd PE | 21.12 | ||
| P/S | 4.86 | ||
| P/FCF | 37.58 | ||
| P/OCF | 25.94 | ||
| P/B | 9.2 | ||
| P/tB | 51.01 | ||
| EV/EBITDA | 19.77 |
EPS(TTM)6.59
EY3.92%
EPS(NY)7.96
Fwd EY4.73%
FCF(TTM)4.47
FCFY2.66%
OCF(TTM)6.48
OCFY3.86%
SpS34.59
BVpS18.27
TBVpS3.29
PEG (NY)2.12
PEG (5Y)4.76
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.78% | ||
| ROE | 34.55% | ||
| ROCE | 17.77% | ||
| ROIC | 13.45% | ||
| ROICexc | 14.17% | ||
| ROICexgc | 24.53% | ||
| OM | 19.2% | ||
| PM (TTM) | 18.25% | ||
| GM | 40.44% | ||
| FCFM | 12.93% |
ROA(3y)13.26%
ROA(5y)8.94%
ROE(3y)36.91%
ROE(5y)24.8%
ROIC(3y)11.73%
ROIC(5y)10.44%
ROICexc(3y)12.41%
ROICexc(5y)11.13%
ROICexgc(3y)21.49%
ROICexgc(5y)19.35%
ROCE(3y)15.5%
ROCE(5y)13.79%
ROICexcg growth 3Y14.97%
ROICexcg growth 5Y3.82%
ROICexc growth 3Y13.95%
ROICexc growth 5Y1.26%
OM growth 3Y6.93%
OM growth 5Y-2.19%
PM growth 3Y3.44%
PM growth 5Y-2.33%
GM growth 3Y3.17%
GM growth 5Y1.13%
F-Score8
Asset Turnover0.81
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 2.86 | ||
| Debt/EBITDA | 1.34 | ||
| Cap/Depr | 80.59% | ||
| Cap/Sales | 5.81% | ||
| Interest Coverage | 7.86 | ||
| Cash Conversion | 70.95% | ||
| Profit Quality | 70.85% | ||
| Current Ratio | 1.6 | ||
| Quick Ratio | 1.1 | ||
| Altman-Z | 6.8 |
F-Score8
WACC10.05%
ROIC/WACC1.34
Cap/Depr(3y)87.85%
Cap/Depr(5y)82.44%
Cap/Sales(3y)6.09%
Cap/Sales(5y)6.28%
Profit Quality(3y)63.13%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)18.1%
EPS 3Y13.99%
EPS 5Y5.36%
EPS Q2Q%20.29%
EPS Next Y12%
EPS Next 2Y12.3%
EPS Next 3Y13.46%
EPS Next 5YN/A
Revenue 1Y (TTM)14.55%
Revenue growth 3Y9.32%
Revenue growth 5Y6.85%
Sales Q2Q%17.28%
Revenue Next Year11.77%
Revenue Next 2Y8.85%
Revenue Next 3Y8.39%
Revenue Next 5YN/A
EBIT growth 1Y18.25%
EBIT growth 3Y16.89%
EBIT growth 5Y4.5%
EBIT Next Year40.54%
EBIT Next 3Y18.02%
EBIT Next 5YN/A
FCF growth 1Y81.84%
FCF growth 3Y19.66%
FCF growth 5Y8.67%
OCF growth 1Y46.64%
OCF growth 3Y12.54%
OCF growth 5Y6.72%