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 42 industry peers in the Building Products industry. AWI scores excellent on profitability, but there are some minor concerns on its financial health. While showing a medium growth rate, AWI is valued expensive at the moment.
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.
AWI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 14.78%, AWI belongs to the best of the industry, outperforming 85.71% of the companies in the same industry.
Looking at the Return On Equity, with a value of 34.55%, AWI belongs to the top of the industry, outperforming 85.71% of the companies in the same industry.
AWI has a Return On Invested Capital of 13.45%. This is in the better half of the industry: AWI outperforms 73.81% 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 12.71%.
The last Return On Invested Capital (13.45%) for AWI is above the 3 year average (11.73%), which is a sign of increasing profitability.
| 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
AWI has a better Profit Margin (18.25%) than 92.86% of its industry peers.
In the last couple of years the Profit Margin of AWI has declined.
AWI has a Operating Margin of 19.20%. This is amongst the best in the industry. AWI outperforms 80.95% of its industry peers.
AWI's Operating Margin has declined in the last couple of years.
AWI has a Gross Margin of 40.44%. This is in the better half of the industry: AWI outperforms 76.19% of its industry peers.
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.
AWI has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, AWI has an improved debt to assets ratio.
2.2 Solvency
AWI has an Altman-Z score of 6.39. This indicates that AWI is financially healthy and has little risk of bankruptcy at the moment.
AWI has a Altman-Z score of 6.39. This is in the better half of the industry: AWI outperforms 73.81% 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.
AWI has a better Debt to FCF ratio (2.86) than 69.05% of its industry peers.
A Debt/Equity ratio of 0.67 indicates that AWI is somewhat dependend on debt financing.
AWI's Debt to Equity ratio of 0.67 is in line compared to the rest of the industry. AWI outperforms 40.48% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 2.86 | ||
| Altman-Z | 6.39 |
ROIC/WACC1.32
WACC10.21%
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.
Looking at the Current ratio, with a value of 1.60, AWI is doing worse than 69.05% of the companies in the same industry.
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.
Looking at the Quick ratio, with a value of 1.10, AWI is doing worse than 64.29% of the companies in the same industry.
| 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.
The Earnings Per Share has been growing slightly by 5.36% on average over the past years.
The Revenue has grown by 14.55% in the past year. This is quite good.
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
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.
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
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 23.20 indicates a rather expensive valuation of AWI.
The rest of the industry has a similar Price/Earnings ratio as AWI.
The average S&P500 Price/Earnings ratio is at 26.55. AWI is around the same levels.
With a Price/Forward Earnings ratio of 19.21, 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 22.40, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.2 | ||
| Fwd PE | 19.21 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AWI is valued a bit more expensive than 61.90% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AWI is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.19 | ||
| EV/EBITDA | 17.94 |
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 AWI 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)1.93
PEG (5Y)4.33
EPS Next 2Y12.3%
EPS Next 3Y13.46%
5. Dividend
5.1 Amount
AWI has a yearly dividend return of 0.79%, which is pretty low.
AWI's Dividend Yield is a higher than the industry average which is at 1.20.
With a Dividend Yield of 0.79, AWI pays less dividend than the S&P500 average, which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.79% |
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
AWI pays out 18.86% of its income as dividend. This is a sustainable payout ratio.
The dividend of AWI is growing, but earnings are growing more, so the dividend growth is sustainable.
DP18.86%
EPS Next 2Y12.3%
EPS Next 3Y13.46%
152.9
-1.52 (-0.98%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners103.44%
Inst Owner Change1.2%
Ins Owners1.26%
Ins Owner Change0.91%
Market Cap6.64B
Analysts75
Price Target164.99 (7.91%)
Short Float %1.62%
Short Ratio2.14
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.79% |
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)-0.92%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.78%
EPS NY rev (1m)0.37%
EPS NY rev (3m)1.87%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.39%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.81%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.2 | ||
| Fwd PE | 19.21 | ||
| P/S | 4.42 | ||
| P/FCF | 34.19 | ||
| P/OCF | 23.6 | ||
| P/B | 8.37 | ||
| P/tB | 46.4 | ||
| EV/EBITDA | 17.94 |
EPS(TTM)6.59
EY4.31%
EPS(NY)7.96
Fwd EY5.2%
FCF(TTM)4.47
FCFY2.92%
OCF(TTM)6.48
OCFY4.24%
SpS34.59
BVpS18.27
TBVpS3.29
PEG (NY)1.93
PEG (5Y)4.33
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 | 6.39 |
F-Score8
WACC10.21%
ROIC/WACC1.32
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%