ARMSTRONG WORLD INDUSTRIES (AWI) Stock Fundamental Analysis
NYSE:AWI - US04247X1028 - Common Stock
196.25 USD
-0.99 (-0.5%)
196.25 USD
0 (0%)
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 valied quite expensively at the moment, while it does show a decent growth rate. This makes AWI very considerable for quality investing!
1. Profitability
1.1 Basic Checks
AWI had positive earnings in the past year.
In the past year AWI had a positive cash flow from operations.
AWI had positive earnings in 4 of the past 5 years.
Each year in the past 5 years AWI had a positive operating cash flow.
1.2 Ratios
AWI has a better Return On Assets (15.90%) than 95.12% of its industry peers.
AWI has a Return On Equity of 35.33%. This is amongst the best in the industry. AWI outperforms 90.24% of its industry peers.
AWI has a Return On Invested Capital of 14.35%. This is in the better half of the industry: AWI outperforms 78.05% of its industry peers.
AWI had an Average Return On Invested Capital over the past 3 years of 11.73%. This is in line with the industry average of 12.73%.
The 3 year average ROIC (11.73%) for AWI is below the current ROIC(14.35%), indicating increased profibility in the last year.
| 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
AWI has a better Profit Margin (18.95%) than 97.56% of its industry peers.
AWI's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 19.79%, AWI belongs to the top 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.
AWI's Gross Margin of 40.58% is fine compared to the rest of the industry. AWI outperforms 78.05% 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so AWI is still creating some value.
Compared to 1 year ago, AWI has less shares outstanding
Compared to 5 years ago, AWI has less shares outstanding
The debt/assets ratio for AWI has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 7.75 indicates that AWI is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 7.75, AWI belongs to the best 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.
Looking at the Debt to FCF ratio, with a value of 2.39, AWI is in the better half of the industry, outperforming 65.85% of the companies in the same industry.
AWI has a Debt/Equity ratio of 0.59. This is a neutral value indicating AWI is somewhat dependend on debt financing.
AWI has a Debt to Equity ratio (0.59) which 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 | 7.75 |
ROIC/WACC1.38
WACC10.42%
2.3 Liquidity
A Current Ratio of 1.61 indicates that AWI should not have too much problems paying its short term obligations.
AWI's Current ratio of 1.61 is on the low side compared to the rest of the industry. AWI is outperformed by 68.29% of its industry peers.
A Quick Ratio of 1.11 indicates that AWI should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.11, AWI perfoms like the industry average, outperforming 41.46% of the companies in the same industry.
| 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.
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 15.59% in the last year.
AWI shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.85% yearly.
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
The Earnings Per Share is expected to grow by 13.79% on average over the next years. This is quite good.
The Revenue is expected to grow by 8.94% on average over the next years. This is quite good.
EPS Next Y16.87%
EPS Next 2Y15.12%
EPS Next 3Y13.79%
EPS Next 5YN/A
Revenue Next Year13.43%
Revenue Next 2Y9.9%
Revenue Next 3Y8.94%
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
A Price/Earnings ratio of 27.80 indicates a quite expensive valuation of AWI.
Based on the Price/Earnings ratio, AWI is valued a bit more expensive than 63.41% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.03, AWI is valued at the same level.
The Price/Forward Earnings ratio is 23.47, which indicates a rather expensive current valuation of AWI.
63.41% of the companies in the same industry are cheaper than AWI, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.63, AWI is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.8 | ||
| Fwd PE | 23.47 |
4.2 Price Multiples
68.29% of the companies in the same industry are cheaper than AWI, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, AWI is valued a bit more expensive than 60.98% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 38.85 | ||
| EV/EBITDA | 21.26 |
4.3 Compensation for Growth
AWI's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct 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 13.79% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.65
PEG (5Y)5.19
EPS Next 2Y15.12%
EPS Next 3Y13.79%
5. Dividend
5.1 Amount
With a yearly dividend of 0.64%, 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.
With a Dividend Yield of 0.64, AWI pays less dividend than the S&P500 average, which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.64% |
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 17.87% 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.
DP17.87%
EPS Next 2Y15.12%
EPS Next 3Y13.79%
196.25
-0.99 (-0.5%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners103.69%
Inst Owner Change-1.7%
Ins Owners1.06%
Ins Owner Change0.95%
Market Cap8.49B
Analysts75.38
Price Target193.29 (-1.51%)
Short Float %1.35%
Short Ratio1.55
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.64% |
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)15.9%
PT rev (3m)17.88%
EPS NQ rev (1m)0.53%
EPS NQ rev (3m)-0.93%
EPS NY rev (1m)4.01%
EPS NY rev (3m)4.35%
Revenue NQ rev (1m)0.85%
Revenue NQ rev (3m)1.64%
Revenue NY rev (1m)1.36%
Revenue NY rev (3m)1.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.8 | ||
| Fwd PE | 23.47 | ||
| P/S | 5.44 | ||
| P/FCF | 38.85 | ||
| P/OCF | 27.77 | ||
| P/B | 10.13 | ||
| P/tB | 43.76 | ||
| EV/EBITDA | 21.26 |
EPS(TTM)7.06
EY3.6%
EPS(NY)8.36
Fwd EY4.26%
FCF(TTM)5.05
FCFY2.57%
OCF(TTM)7.07
OCFY3.6%
SpS36.1
BVpS19.37
TBVpS4.48
PEG (NY)1.65
PEG (5Y)5.19
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 | 7.75 |
F-Score8
WACC10.42%
ROIC/WACC1.38
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 Y16.87%
EPS Next 2Y15.12%
EPS Next 3Y13.79%
EPS Next 5YN/A
Revenue 1Y (TTM)15.59%
Revenue growth 3Y9.32%
Revenue growth 5Y6.85%
Sales Q2Q%16.3%
Revenue Next Year13.43%
Revenue Next 2Y9.9%
Revenue Next 3Y8.94%
Revenue Next 5YN/A
EBIT growth 1Y22.38%
EBIT growth 3Y16.89%
EBIT growth 5Y4.5%
EBIT Next Year45.79%
EBIT Next 3Y19.51%
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%