ARMSTRONG WORLD INDUSTRIES (AWI) Stock Fundamental Analysis
USA - NYSE:AWI - US04247X1028 - Common Stock
196.57 USD
-0.85 (-0.43%)
196.57 USD
0 (0%)
Taking everything into account, AWI scores 6 out of 10 in our fundamental rating. AWI was compared to 41 industry peers in the Building Products industry. Both the health and profitability get an excellent rating, making AWI a very profitable company, without any liquidiy or solvency issues. While showing a medium growth rate, AWI is valued expensive at the moment. These ratings could make AWI a good candidate 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
AWI has a Return On Assets of 15.90%. This is amongst the best in the industry. AWI outperforms 95.12% of its industry peers.
AWI has a better Return On Equity (35.33%) than 90.24% of its industry peers.
Looking at the Return On Invested Capital, with a value of 14.35%, AWI is in the better half of the industry, outperforming 78.05% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for AWI is in line with the industry average of 12.76%.
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 Profit Margin of 18.95%. This is amongst the best in the industry. AWI outperforms 97.56% of its industry peers.
In the last couple of years the Profit Margin of AWI has declined.
AWI has a Operating Margin of 19.79%. This is amongst the best in the industry. AWI outperforms 82.93% of its industry peers.
In the last couple of years the Operating Margin of AWI has declined.
AWI has a Gross Margin of 40.58%. This is in the better half 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.
AWI has less shares outstanding than it did 1 year ago.
AWI has less shares outstanding than it did 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 7.75. This indicates that AWI is financially healthy and has little risk of bankruptcy at the moment.
AWI's Altman-Z score of 7.75 is amongst the best of the industry. AWI outperforms 87.80% of its industry peers.
AWI has a debt to FCF ratio of 2.39. This is a good value and a sign of high solvency as AWI would need 2.39 years to pay back of all of its debts.
AWI's Debt to FCF ratio of 2.39 is fine compared to the rest of the industry. AWI outperforms 65.85% of its industry peers.
AWI has a Debt/Equity ratio of 0.59. This is a neutral value indicating AWI is somewhat dependend on debt financing.
The Debt to Equity ratio of AWI (0.59) is comparable to the rest of the industry.
Even though the debt/equity ratio score it not favorable for AWI, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | 2.39 | ||
| Altman-Z | 7.75 |
ROIC/WACC1.39
WACC10.34%
2.3 Liquidity
AWI has a Current Ratio of 1.61. This is a normal value and indicates that AWI is financially healthy and should not expect problems in meeting its short term obligations.
AWI has a worse Current ratio (1.61) than 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.
Looking at the Quick ratio, with a value of 1.11, AWI is in line with its industry, 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
AWI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 21.31%, which is quite impressive.
The Earnings Per Share has been growing slightly by 5.36% on average over the past years.
AWI shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 15.59%.
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
Based on estimates for the next years, AWI will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.79% on average per year.
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 Year13.64%
Revenue Next 2Y10.09%
Revenue Next 3Y8.94%
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
AWI is valuated quite expensively with a Price/Earnings ratio of 27.84.
Based on the Price/Earnings ratio, AWI is valued a bit more expensive than the industry average as 63.41% of the companies are valued more cheaply.
When comparing the Price/Earnings ratio of AWI to the average of the S&P500 Index (27.38), we can say AWI is valued inline with the index average.
AWI is valuated rather expensively with a Price/Forward Earnings ratio of 23.51.
Based on the Price/Forward Earnings ratio, AWI is valued a bit more expensive than the industry average as 65.85% of the companies are valued more cheaply.
AWI is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.86, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.84 | ||
| Fwd PE | 23.51 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AWI is valued a bit more expensive than the industry average as 70.73% of the companies are valued more cheaply.
Based on the Price/Free Cash Flow ratio, AWI is valued a bit more expensive than the industry average as 60.98% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 38.92 | ||
| EV/EBITDA | 21.27 |
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.
A more expensive valuation may be justified as AWI's earnings are expected to grow with 13.79% in the coming years.
PEG (NY)1.65
PEG (5Y)5.19
EPS Next 2Y15.12%
EPS Next 3Y13.79%
5. Dividend
5.1 Amount
AWI has a yearly dividend return of 0.62%, which is pretty low.
AWI's Dividend Yield is comparable with the industry average which is at 1.16.
With a Dividend Yield of 0.62, AWI pays less dividend than the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.62% |
5.2 History
On average, the dividend of AWI grows each year by 9.49%, which is quite nice.
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.
The dividend of AWI is growing, but earnings are growing more, so the dividend growth is sustainable.
DP17.87%
EPS Next 2Y15.12%
EPS Next 3Y13.79%
196.57
-0.85 (-0.43%)
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 Cap8.50B
Analysts75.38
Price Target197.75 (0.6%)
Short Float %1.61%
Short Ratio1.81
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.62% |
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)2.31%
PT rev (3m)19.86%
EPS NQ rev (1m)0.72%
EPS NQ rev (3m)0.23%
EPS NY rev (1m)4.01%
EPS NY rev (3m)4.35%
Revenue NQ rev (1m)0.07%
Revenue NQ rev (3m)1.22%
Revenue NY rev (1m)1.48%
Revenue NY rev (3m)1.67%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.84 | ||
| Fwd PE | 23.51 | ||
| P/S | 5.45 | ||
| P/FCF | 38.92 | ||
| P/OCF | 27.82 | ||
| P/B | 10.15 | ||
| P/tB | 43.83 | ||
| EV/EBITDA | 21.27 |
EPS(TTM)7.06
EY3.59%
EPS(NY)8.36
Fwd EY4.25%
FCF(TTM)5.05
FCFY2.57%
OCF(TTM)7.07
OCFY3.59%
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
WACC10.34%
ROIC/WACC1.39
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 Year13.64%
Revenue Next 2Y10.09%
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%