AZZ INC (AZZ) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AZZ - US0024741045 - Common Stock
122.88 USD
-0.24 (-0.19%)
122.88 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to AZZ. AZZ was compared to 42 industry peers in the Building Products industry. Both the profitability and the financial health of AZZ get a neutral evaluation. Nothing too spectacular is happening here. AZZ has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
- In the past year AZZ was profitable.
- AZZ had a positive operating cash flow in the past year.
- Of the past 5 years AZZ 4 years were profitable.
- AZZ had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- AZZ has a better Return On Assets (14.41%) than 88.10% of its industry peers.
- AZZ has a Return On Equity of 24.37%. This is in the better half of the industry: AZZ outperforms 78.57% of its industry peers.
- The Return On Invested Capital of AZZ (9.72%) is comparable to the rest of the industry.
- AZZ had an Average Return On Invested Capital over the past 3 years of 8.28%. This is below the industry average of 12.68%.
- The last Return On Invested Capital (9.72%) for AZZ is above the 3 year average (8.28%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.41% | ||
| ROE | 24.37% | ||
| ROIC | 9.72% |
ROA(3y)1.19%
ROA(5y)2.99%
ROE(3y)2.39%
ROE(5y)5.22%
ROIC(3y)8.28%
ROIC(5y)7.31%
1.3 Margins
- With an excellent Profit Margin value of 19.89%, AZZ belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
- In the last couple of years the Profit Margin of AZZ has declined.
- Looking at the Operating Margin, with a value of 15.57%, AZZ is in line with its industry, outperforming 59.52% of the companies in the same industry.
- In the last couple of years the Operating Margin of AZZ has grown nicely.
- The Gross Margin of AZZ (24.12%) is worse than 66.67% of its industry peers.
- AZZ's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.57% | ||
| PM (TTM) | 19.89% | ||
| GM | 24.12% |
OM growth 3Y-0.2%
OM growth 5Y10.18%
PM growth 3Y-40.76%
PM growth 5Y-6.06%
GM growth 3Y-4.45%
GM growth 5Y1.66%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), AZZ is creating some 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
- AZZ has an Altman-Z score of 4.16. This indicates that AZZ is financially healthy and has little risk of bankruptcy at the moment.
- AZZ has a Altman-Z score (4.16) which is in line with its industry peers.
- The Debt to FCF ratio of AZZ is 1.28, which is an excellent value as it means it would take AZZ, only 1.28 years of fcf income to pay off all of its debts.
- AZZ has a Debt to FCF ratio of 1.28. This is amongst the best in the industry. AZZ outperforms 83.33% of its industry peers.
- A Debt/Equity ratio of 0.41 indicates that AZZ is not too dependend on debt financing.
- With a decent Debt to Equity ratio value of 0.41, AZZ is doing good in the industry, outperforming 61.90% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.41 | ||
| Debt/FCF | 1.28 | ||
| Altman-Z | 4.16 |
ROIC/WACC1.04
WACC9.36%
2.3 Liquidity
- A Current Ratio of 1.66 indicates that AZZ should not have too much problems paying its short term obligations.
- AZZ's Current ratio of 1.66 is on the low side compared to the rest of the industry. AZZ is outperformed by 71.43% of its industry peers.
- AZZ has a Quick Ratio of 1.21. This is a normal value and indicates that AZZ is financially healthy and should not expect problems in meeting its short term obligations.
- The Quick ratio of AZZ (1.21) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.66 | ||
| Quick Ratio | 1.21 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 13.20% 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.
- The Revenue has been growing slightly by 1.53% in the past year.
- Measured over the past years, AZZ shows a quite strong growth in Revenue. The Revenue has been growing by 8.24% on average per year.
EPS 1Y (TTM)13.2%
EPS 3Y15.67%
EPS 5Y13.92%
EPS Q2Q%9.35%
Revenue 1Y (TTM)1.53%
Revenue growth 3Y44.25%
Revenue growth 5Y8.24%
Sales Q2Q%5.47%
3.2 Future
- AZZ is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.23% yearly.
- AZZ is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.26% yearly.
EPS Next Y17.24%
EPS Next 2Y14.37%
EPS Next 3Y12.66%
EPS Next 5Y7.23%
Revenue Next Year2.98%
Revenue Next 2Y4.1%
Revenue Next 3Y3.92%
Revenue Next 5Y4.26%
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 decreasing.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 21.08 indicates a rather expensive valuation of AZZ.
- AZZ's Price/Earnings is on the same level as the industry average.
- When comparing the Price/Earnings ratio of AZZ to the average of the S&P500 Index (28.82), we can say AZZ is valued slightly cheaper.
- AZZ is valuated rather expensively with a Price/Forward Earnings ratio of 18.06.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of AZZ indicates a somewhat cheap valuation: AZZ is cheaper than 64.29% of the companies listed in the same industry.
- AZZ is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.95, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.08 | ||
| Fwd PE | 18.06 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as AZZ.
- AZZ's Price/Free Cash Flow ratio is rather cheap when compared to the industry. AZZ is cheaper than 95.24% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.62 | ||
| EV/EBITDA | 12.49 |
4.3 Compensation for Growth
- AZZ's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- AZZ has a very decent profitability rating, which may justify a higher PE ratio.
- AZZ's earnings are expected to grow with 12.66% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.22
PEG (5Y)1.51
EPS Next 2Y14.37%
EPS Next 3Y12.66%
5. Dividend
5.1 Amount
- AZZ has a yearly dividend return of 0.63%, which is pretty low.
- AZZ's Dividend Yield is comparable with the industry average which is at 0.66.
- With a Dividend Yield of 0.63, AZZ pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.63% |
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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)4.26%
Div Incr Years0
Div Non Decr Years14
5.3 Sustainability
- AZZ pays out 6.90% of its income as dividend. This is a sustainable payout ratio.
- The dividend of AZZ is growing, but earnings are growing more, so the dividend growth is sustainable.
DP6.9%
EPS Next 2Y14.37%
EPS Next 3Y12.66%
AZZ INC / AZZ FAQ
What is the ChartMill fundamental rating of AZZ INC (AZZ) stock?
ChartMill assigns a fundamental rating of 5 / 10 to AZZ.
What is the valuation status of AZZ INC (AZZ) stock?
ChartMill assigns a valuation rating of 5 / 10 to AZZ INC (AZZ). This can be considered as Fairly Valued.
What is the profitability of AZZ stock?
AZZ INC (AZZ) has a profitability rating of 6 / 10.
What are the PE and PB ratios of AZZ INC (AZZ) stock?
The Price/Earnings (PE) ratio for AZZ INC (AZZ) is 21.08 and the Price/Book (PB) ratio is 2.8.
Can you provide the financial health for AZZ stock?
The financial health rating of AZZ INC (AZZ) is 6 / 10.