AZZ INC (AZZ) Stock Fundamental Analysis
NYSE:AZZ - New York Stock Exchange, Inc. - US0024741045 - Common Stock - Currency: USD
Overall AZZ gets a fundamental rating of 4 out of 10. We evaluated AZZ against 42 industry peers in the Building Products industry. There are concerns on the financial health of AZZ while its profitability can be described as average. AZZ has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year AZZ was profitable.
AZZ had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: AZZ reported negative net income in multiple years.
In the past 5 years AZZ always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of AZZ (2.35%) is worse than 71.43% of its industry peers.
With a Return On Equity value of 5.02%, AZZ is not doing good in the industry: 71.43% of the companies in the same industry are doing better.
AZZ has a Return On Invested Capital (9.05%) which is comparable to the rest of the industry.
AZZ had an Average Return On Invested Capital over the past 3 years of 8.27%. This is below the industry average of 12.62%.
The 3 year average ROIC (8.27%) for AZZ is below the current ROIC(9.05%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.35% | ||
| ROE | 5.02% | ||
| ROIC | 9.05% |
ROA(3y)1.19%
ROA(5y)0.43%
ROE(3y)2.39%
ROE(5y)0.87%
ROIC(3y)8.27%
ROIC(5y)9.3%
1.3 Margins
With a Profit Margin value of 3.32%, AZZ is not doing good in the industry: 71.43% of the companies in the same industry are doing better.
AZZ's Profit Margin has declined in the last couple of years.
AZZ has a Operating Margin of 14.98%. This is comparable to the rest of the industry: AZZ outperforms 54.76% of its industry peers.
AZZ's Operating Margin has improved in the last couple of years.
The Gross Margin of AZZ (24.25%) is worse than 73.81% of its industry peers.
AZZ's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.98% | ||
| PM (TTM) | 3.32% | ||
| GM | 24.25% |
OM growth 3Y2.01%
OM growth 5Y10.19%
PM growth 3YN/A
PM growth 5Y-6.05%
GM growth 3Y2.76%
GM growth 5Y1.66%
2. Health
2.1 Basic Checks
AZZ has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for AZZ has been increased compared to 1 year ago.
The number of shares outstanding for AZZ has been increased compared to 5 years ago.
The debt/assets ratio for AZZ has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.14 indicates that AZZ is not in any danger for bankruptcy at the moment.
AZZ has a Altman-Z score of 3.14. This is comparable to the rest of the industry: AZZ outperforms 42.86% of its industry peers.
AZZ has a debt to FCF ratio of 6.41. This is a slightly negative value and a sign of low solvency as AZZ would need 6.41 years to pay back of all of its debts.
AZZ's Debt to FCF ratio of 6.41 is on the low side compared to the rest of the industry. AZZ is outperformed by 61.90% of its industry peers.
AZZ has a Debt/Equity ratio of 0.82. This is a neutral value indicating AZZ is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.82, AZZ is doing worse than 69.05% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.82 | ||
| Debt/FCF | 6.41 | ||
| Altman-Z | 3.14 |
ROIC/WACC0.88
WACC10.28%
2.3 Liquidity
A Current Ratio of 1.70 indicates that AZZ should not have too much problems paying its short term obligations.
AZZ has a Current ratio of 1.70. This is in the lower half of the industry: AZZ underperforms 66.67% of its industry peers.
AZZ has a Quick Ratio of 1.19. This is a normal value and indicates that AZZ is financially healthy and should not expect problems in meeting its short term obligations.
AZZ's Quick ratio of 1.19 is in line compared to the rest of the industry. AZZ outperforms 47.62% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.7 | ||
| Quick Ratio | 1.19 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 13.81% over the past year.
AZZ shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.92% yearly.
Looking at the last year, AZZ shows a small growth in Revenue. The Revenue has grown by 2.61% in the last year.
The Revenue has been growing by 8.24% on average over the past years. This is quite good.
EPS 1Y (TTM)13.81%
EPS 3Y15.67%
EPS 5Y13.92%
EPS Q2Q%21.92%
Revenue 1Y (TTM)2.61%
Revenue growth 3Y6.03%
Revenue growth 5Y8.24%
Sales Q2Q%2.12%
3.2 Future
The Earnings Per Share is expected to grow by 11.57% on average over the next years. This is quite good.
Based on estimates for the next years, AZZ will show a small growth in Revenue. The Revenue will grow by 5.33% on average per year.
EPS Next Y14.29%
EPS Next 2Y11.99%
EPS Next 3Y11.57%
EPS Next 5YN/A
Revenue Next Year6.02%
Revenue Next 2Y4.28%
Revenue Next 3Y5.33%
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 stable.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 19.21, which indicates a rather expensive current valuation of AZZ.
AZZ's Price/Earnings ratio is in line with the industry average.
AZZ's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.30.
With a Price/Forward Earnings ratio of 16.26, AZZ is valued correctly.
Based on the Price/Forward Earnings ratio, AZZ is valued a bit cheaper than the industry average as 61.90% of the companies are valued more expensively.
AZZ is valuated rather cheaply 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 | 19.21 | ||
| Fwd PE | 16.26 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AZZ is on the same level as its industry peers.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AZZ indicates a somewhat cheap valuation: AZZ is cheaper than 61.90% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.7 | ||
| EV/EBITDA | 12.66 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEG (NY)1.34
PEG (5Y)1.38
EPS Next 2Y11.99%
EPS Next 3Y11.57%
5. Dividend
5.1 Amount
With a yearly dividend of 0.75%, AZZ is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.12, AZZ pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.35, AZZ's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.75% |
5.2 History
The dividend of AZZ has a limited annual growth rate of 4.26%.
AZZ has paid a dividend for at least 10 years, which is a reliable track record.
AZZ has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)4.26%
Div Incr Years0
Div Non Decr Years14
5.3 Sustainability
AZZ pays out 44.07% of its income as dividend. This is a bit on the high side, but may be sustainable.
AZZ's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP44.07%
EPS Next 2Y11.99%
EPS Next 3Y11.57%
106.04
-0.25 (-0.24%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners103.64%
Inst Owner Change0%
Ins Owners1.59%
Ins Owner Change0.68%
Market Cap3.18B
Analysts77.14
Price Target105.95 (-0.08%)
Short Float %2.43%
Short Ratio3.27
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.75% |
Yearly Dividend0.84
Dividend Growth(5Y)4.26%
DP44.07%
Div Incr Years0
Div Non Decr Years14
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)4.59%
Min EPS beat(2)-0.54%
Max EPS beat(2)9.72%
EPS beat(4)3
Avg EPS beat(4)5.95%
Min EPS beat(4)-0.54%
Max EPS beat(4)11.56%
EPS beat(8)6
Avg EPS beat(8)10.79%
EPS beat(12)9
Avg EPS beat(12)10.49%
EPS beat(16)13
Avg EPS beat(16)13.13%
Revenue beat(2)1
Avg Revenue beat(2)-2.32%
Min Revenue beat(2)-5.47%
Max Revenue beat(2)0.82%
Revenue beat(4)2
Avg Revenue beat(4)-1.14%
Min Revenue beat(4)-5.47%
Max Revenue beat(4)1.76%
Revenue beat(8)4
Avg Revenue beat(8)-0.44%
Revenue beat(12)5
Avg Revenue beat(12)-3.39%
Revenue beat(16)6
Avg Revenue beat(16)9.44%
PT rev (1m)0%
PT rev (3m)-0.12%
EPS NQ rev (1m)0%
EPS NQ rev (3m)2.68%
EPS NY rev (1m)-0.02%
EPS NY rev (3m)0.8%
Revenue NQ rev (1m)0.26%
Revenue NQ rev (3m)2.63%
Revenue NY rev (1m)0.65%
Revenue NY rev (3m)0.77%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.21 | ||
| Fwd PE | 16.26 | ||
| P/S | 2.01 | ||
| P/FCF | 23.7 | ||
| P/OCF | 12.71 | ||
| P/B | 3.04 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.66 |
EPS(TTM)5.52
EY5.21%
EPS(NY)6.52
Fwd EY6.15%
FCF(TTM)4.47
FCFY4.22%
OCF(TTM)8.34
OCFY7.87%
SpS52.68
BVpS34.91
TBVpS-2.68
PEG (NY)1.34
PEG (5Y)1.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.35% | ||
| ROE | 5.02% | ||
| ROCE | 11.78% | ||
| ROIC | 9.05% | ||
| ROICexc | 9.05% | ||
| ROICexgc | 20.65% | ||
| OM | 14.98% | ||
| PM (TTM) | 3.32% | ||
| GM | 24.25% | ||
| FCFM | 8.49% |
ROA(3y)1.19%
ROA(5y)0.43%
ROE(3y)2.39%
ROE(5y)0.87%
ROIC(3y)8.27%
ROIC(5y)9.3%
ROICexc(3y)8.29%
ROICexc(5y)9.38%
ROICexgc(3y)19.39%
ROICexgc(5y)20.37%
ROCE(3y)10.78%
ROCE(5y)12.12%
ROICexcg growth 3Y-10.37%
ROICexcg growth 5Y-4.21%
ROICexc growth 3Y-15.16%
ROICexc growth 5Y-1.84%
OM growth 3Y2.01%
OM growth 5Y10.19%
PM growth 3YN/A
PM growth 5Y-6.05%
GM growth 3Y2.76%
GM growth 5Y1.66%
F-Score6
Asset Turnover0.71
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.82 | ||
| Debt/FCF | 6.41 | ||
| Debt/EBITDA | 2.69 | ||
| Cap/Depr | 140.97% | ||
| Cap/Sales | 7.34% | ||
| Interest Coverage | 3.12 | ||
| Cash Conversion | 78.45% | ||
| Profit Quality | 255.6% | ||
| Current Ratio | 1.7 | ||
| Quick Ratio | 1.19 | ||
| Altman-Z | 3.14 |
F-Score6
WACC10.28%
ROIC/WACC0.88
Cap/Depr(3y)112.42%
Cap/Depr(5y)96.8%
Cap/Sales(3y)5.95%
Cap/Sales(5y)4.88%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)13.81%
EPS 3Y15.67%
EPS 5Y13.92%
EPS Q2Q%21.92%
EPS Next Y14.29%
EPS Next 2Y11.99%
EPS Next 3Y11.57%
EPS Next 5YN/A
Revenue 1Y (TTM)2.61%
Revenue growth 3Y6.03%
Revenue growth 5Y8.24%
Sales Q2Q%2.12%
Revenue Next Year6.02%
Revenue Next 2Y4.28%
Revenue Next 3Y5.33%
Revenue Next 5YN/A
EBIT growth 1Y6.64%
EBIT growth 3Y8.16%
EBIT growth 5Y19.28%
EBIT Next Year43.37%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-10.26%
FCF growth 3Y32.51%
FCF growth 5Y4.09%
OCF growth 1Y2.23%
OCF growth 3Y42.7%
OCF growth 5Y11.92%