ARMSTRONG WORLD INDUSTRIES (AWI) Stock Fundamental Analysis
NYSE:AWI - New York Stock Exchange, Inc. - US04247X1028 - Common Stock - Currency: USD
AWI gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 41 industry peers in the Building Products industry. AWI gets an excellent profitability rating and is at the same time showing great financial health properties. AWI is quite expensive at the moment. It does show a decent growth rate. With these ratings, AWI could be worth investigating further for quality investing!.
1. Profitability
1.1 Basic Checks
AWI had positive earnings in the past year.
AWI had a positive operating cash flow in the past year.
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
The Return On Assets of AWI (15.90%) is better than 90.24% of its industry peers.
With an excellent Return On Equity value of 35.33%, AWI belongs to the best of the industry, outperforming 90.24% of the companies in the same industry.
The Return On Invested Capital of AWI (14.35%) is better than 73.17% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AWI is in line with the industry average of 12.82%.
The last Return On Invested Capital (14.35%) for AWI is above the 3 year average (11.73%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.9% | ||
| ROE | 35.33% | ||
| ROIC | 14.35% |
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
The Profit Margin of AWI (18.95%) is better than 97.56% of its industry peers.
In the last couple of years the Profit Margin of AWI has declined.
With an excellent Operating Margin value of 19.79%, AWI belongs to the best of the industry, outperforming 82.93% of the companies in the same industry.
AWI's Operating Margin has declined in the last couple of years.
The Gross Margin of AWI (40.58%) is better than 75.61% of its industry peers.
In the last couple of years the Gross Margin of AWI has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.79% | ||
| PM (TTM) | 18.95% | ||
| GM | 40.58% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), AWI is creating some value.
Compared to 1 year ago, AWI has less shares outstanding
Compared to 5 years ago, AWI has less shares outstanding
AWI has a better debt/assets ratio than last year.
2.2 Solvency
AWI has an Altman-Z score of 7.53. This indicates that AWI is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 7.53, AWI belongs to the top of the industry, outperforming 87.80% of the companies in the same industry.
The Debt to FCF ratio of AWI is 2.39, which is a good value as it means it would take AWI, 2.39 years of fcf income to pay off all of its debts.
AWI has a better Debt to FCF ratio (2.39) than 73.17% of its industry peers.
A Debt/Equity ratio of 0.59 indicates that AWI is somewhat dependend on debt financing.
The Debt to Equity ratio of AWI (0.59) is comparable to the rest of the industry.
Although AWI does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | 2.39 | ||
| Altman-Z | 7.53 |
ROIC/WACC1.67
WACC8.6%
2.3 Liquidity
A Current Ratio of 1.61 indicates that AWI should not have too much problems paying its short term obligations.
AWI has a worse Current ratio (1.61) than 68.29% of its industry peers.
AWI has a Quick Ratio of 1.11. 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 Quick ratio of 1.11 is in line compared to the rest of the industry. AWI outperforms 41.46% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.61 | ||
| Quick Ratio | 1.11 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 21.31% over the past year.
Measured over the past 5 years, AWI shows a small growth in Earnings Per Share. The EPS has been growing by 5.36% on average per year.
Looking at the last year, AWI shows a quite strong growth in Revenue. The Revenue has grown by 15.59% in the last year.
The Revenue has been growing slightly by 6.85% on average over the past years.
EPS 1Y (TTM)21.31%
EPS 3Y13.99%
EPS 5Y5.36%
EPS Q2Q%29.01%
Revenue 1Y (TTM)15.59%
Revenue growth 3Y9.32%
Revenue growth 5Y6.85%
Sales Q2Q%16.3%
3.2 Future
AWI is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.46% yearly.
AWI is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.47% yearly.
EPS Next Y12.36%
EPS Next 2Y12.5%
EPS Next 3Y13.46%
EPS Next 5YN/A
Revenue Next Year11.98%
Revenue Next 2Y9.11%
Revenue Next 3Y8.47%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 26.70 indicates a quite expensive valuation of AWI.
Based on the Price/Earnings ratio, AWI is valued a bit more expensive than 65.85% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.82. AWI is around the same levels.
The Price/Forward Earnings ratio is 23.61, which indicates a rather expensive current valuation of AWI.
60.98% of the companies in the same industry are cheaper than AWI, based on the Price/Forward Earnings ratio.
AWI is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 36.21, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.7 | ||
| Fwd PE | 23.61 |
4.2 Price Multiples
70.73% of the companies in the same industry are cheaper than AWI, based on the Enterprise Value to EBITDA ratio.
AWI's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. AWI is more expensive than 60.98% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 37.32 | ||
| EV/EBITDA | 20.36 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates AWI does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of AWI may justify a higher PE ratio.
A more expensive valuation may be justified as AWI's earnings are expected to grow with 13.46% in the coming years.
PEG (NY)2.16
PEG (5Y)4.98
EPS Next 2Y12.5%
EPS Next 3Y13.46%
5. Dividend
5.1 Amount
With a yearly dividend of 0.65%, AWI is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.14, AWI has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.39, AWI's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.65% |
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.
As AWI did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)9.49%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
17.87% of the earnings are spent on dividend by AWI. This is a low number and sustainable payout ratio.
AWI's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP17.87%
EPS Next 2Y12.5%
EPS Next 3Y13.46%
188.52
+0.35 (+0.19%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners103.08%
Inst Owner Change-0.35%
Ins Owners1.04%
Ins Owner Change0.96%
Market Cap8.16B
Analysts75
Price Target166.77 (-11.54%)
Short Float %1.5%
Short Ratio2.36
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.65% |
Yearly Dividend1.16
Dividend Growth(5Y)9.49%
DP17.87%
Div Incr Years6
Div Non Decr Years6
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)11.88%
Min EPS beat(2)7.65%
Max EPS beat(2)16.11%
EPS beat(4)4
Avg EPS beat(4)8.3%
Min EPS beat(4)2.19%
Max EPS beat(4)16.11%
EPS beat(8)8
Avg EPS beat(8)10.63%
EPS beat(12)10
Avg EPS beat(12)6.57%
EPS beat(16)11
Avg EPS beat(16)3.36%
Revenue beat(2)2
Avg Revenue beat(2)3.11%
Min Revenue beat(2)2.24%
Max Revenue beat(2)3.98%
Revenue beat(4)3
Avg Revenue beat(4)2.15%
Min Revenue beat(4)-1.01%
Max Revenue beat(4)3.98%
Revenue beat(8)7
Avg Revenue beat(8)1.92%
Revenue beat(12)8
Avg Revenue beat(12)0.66%
Revenue beat(16)10
Avg Revenue beat(16)0.31%
PT rev (1m)1.08%
PT rev (3m)2.35%
EPS NQ rev (1m)-0.87%
EPS NQ rev (3m)-2.03%
EPS NY rev (1m)0.32%
EPS NY rev (3m)0.7%
Revenue NQ rev (1m)1.16%
Revenue NQ rev (3m)1.64%
Revenue NY rev (1m)0.19%
Revenue NY rev (3m)0.56%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.7 | ||
| Fwd PE | 23.61 | ||
| P/S | 5.22 | ||
| P/FCF | 37.32 | ||
| P/OCF | 26.68 | ||
| P/B | 9.73 | ||
| P/tB | 42.04 | ||
| EV/EBITDA | 20.36 |
EPS(TTM)7.06
EY3.74%
EPS(NY)7.99
Fwd EY4.24%
FCF(TTM)5.05
FCFY2.68%
OCF(TTM)7.07
OCFY3.75%
SpS36.1
BVpS19.37
TBVpS4.48
PEG (NY)2.16
PEG (5Y)4.98
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.9% | ||
| ROE | 35.33% | ||
| ROCE | 18.97% | ||
| ROIC | 14.35% | ||
| ROICexc | 15.11% | ||
| ROICexgc | 25.86% | ||
| OM | 19.79% | ||
| PM (TTM) | 18.95% | ||
| GM | 40.58% | ||
| FCFM | 13.99% |
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 Turnover0.84
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | 2.39 | ||
| Debt/EBITDA | 1.17 | ||
| Cap/Depr | 77.03% | ||
| Cap/Sales | 5.58% | ||
| Interest Coverage | 8.85 | ||
| Cash Conversion | 72.41% | ||
| Profit Quality | 73.82% | ||
| Current Ratio | 1.61 | ||
| Quick Ratio | 1.11 | ||
| Altman-Z | 7.53 |
F-Score8
WACC8.6%
ROIC/WACC1.67
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)21.31%
EPS 3Y13.99%
EPS 5Y5.36%
EPS Q2Q%29.01%
EPS Next Y12.36%
EPS Next 2Y12.5%
EPS Next 3Y13.46%
EPS Next 5YN/A
Revenue 1Y (TTM)15.59%
Revenue growth 3Y9.32%
Revenue growth 5Y6.85%
Sales Q2Q%16.3%
Revenue Next Year11.98%
Revenue Next 2Y9.11%
Revenue Next 3Y8.47%
Revenue Next 5YN/A
EBIT growth 1Y22.38%
EBIT growth 3Y16.89%
EBIT growth 5Y4.5%
EBIT Next Year40.54%
EBIT Next 3Y18.02%
EBIT Next 5YN/A
FCF growth 1Y75.08%
FCF growth 3Y19.66%
FCF growth 5Y8.67%
OCF growth 1Y43.39%
OCF growth 3Y12.54%
OCF growth 5Y6.72%