HOWMET AEROSPACE INC (HWM) Stock Fundamental Analysis
NYSE:HWM - New York Stock Exchange, Inc. - US4432011082 - Common Stock - Currency: USD
Taking everything into account, HWM scores 7 out of 10 in our fundamental rating. HWM was compared to 65 industry peers in the Aerospace & Defense industry. HWM gets an excellent profitability rating and is at the same time showing great financial health properties. HWM is valued quite expensive, but it does show an excellent growth. With these ratings, HWM could be worth investigating further for growth and quality investing!.
1. Profitability
1.1 Basic Checks
HWM had positive earnings in the past year.
HWM had a positive operating cash flow in the past year.
HWM had positive earnings in each of the past 5 years.
In the past 5 years HWM always reported a positive cash flow from operatings.
1.2 Ratios
HWM's Return On Assets of 11.64% is amongst the best of the industry. HWM outperforms 95.38% of its industry peers.
The Return On Equity of HWM (26.17%) is better than 95.38% of its industry peers.
HWM has a better Return On Invested Capital (15.58%) than 96.92% of its industry peers.
HWM had an Average Return On Invested Capital over the past 3 years of 11.81%. This is above the industry average of 8.39%.
The last Return On Invested Capital (15.58%) for HWM is above the 3 year average (11.81%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.64% | ||
| ROE | 26.17% | ||
| ROIC | 15.58% |
ROA(3y)7.61%
ROA(5y)5.52%
ROE(3y)19.06%
ROE(5y)14.35%
ROIC(3y)11.81%
ROIC(5y)9.94%
1.3 Margins
HWM's Profit Margin of 16.61% is amongst the best of the industry. HWM outperforms 95.38% of its industry peers.
In the last couple of years the Profit Margin of HWM has grown nicely.
HWM has a Operating Margin of 23.52%. This is amongst the best in the industry. HWM outperforms 98.46% of its industry peers.
HWM's Operating Margin has improved in the last couple of years.
The Gross Margin of HWM (32.18%) is better than 70.77% of its industry peers.
HWM's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 23.52% | ||
| PM (TTM) | 16.61% | ||
| GM | 32.18% |
OM growth 3Y9.72%
OM growth 5Y6.18%
PM growth 3Y44.45%
PM growth 5Y18.67%
GM growth 3Y3.97%
GM growth 5Y3.11%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), HWM is creating some value.
HWM has less shares outstanding than it did 1 year ago.
HWM has less shares outstanding than it did 5 years ago.
The debt/assets ratio for HWM has been reduced compared to a year ago.
2.2 Solvency
HWM has an Altman-Z score of 8.71. This indicates that HWM is financially healthy and has little risk of bankruptcy at the moment.
HWM has a better Altman-Z score (8.71) than 86.15% of its industry peers.
The Debt to FCF ratio of HWM is 3.27, which is a good value as it means it would take HWM, 3.27 years of fcf income to pay off all of its debts.
HWM has a Debt to FCF ratio of 3.27. This is amongst the best in the industry. HWM outperforms 84.62% of its industry peers.
A Debt/Equity ratio of 0.69 indicates that HWM is somewhat dependend on debt financing.
The Debt to Equity ratio of HWM (0.69) is worse than 64.62% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.69 | ||
| Debt/FCF | 3.27 | ||
| Altman-Z | 8.71 |
ROIC/WACC1.52
WACC10.27%
2.3 Liquidity
HWM has a Current Ratio of 2.30. This indicates that HWM is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of HWM (2.30) is comparable to the rest of the industry.
A Quick Ratio of 1.07 indicates that HWM should not have too much problems paying its short term obligations.
HWM's Quick ratio of 1.07 is on the low side compared to the rest of the industry. HWM is outperformed by 66.15% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.3 | ||
| Quick Ratio | 1.07 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 49.00% over the past year.
Measured over the past 5 years, HWM shows a small growth in Earnings Per Share. The EPS has been growing by 4.88% on average per year.
Looking at the last year, HWM shows a quite strong growth in Revenue. The Revenue has grown by 10.01% in the last year.
HWM shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.92% yearly.
EPS 1Y (TTM)49%
EPS 3Y38.62%
EPS 5Y4.88%
EPS Q2Q%50.88%
Revenue 1Y (TTM)10.01%
Revenue growth 3Y14.33%
Revenue growth 5Y0.92%
Sales Q2Q%6.47%
3.2 Future
Based on estimates for the next years, HWM will show a very strong growth in Earnings Per Share. The EPS will grow by 20.32% on average per year.
The Revenue is expected to grow by 9.61% on average over the next years. This is quite good.
EPS Next Y31.48%
EPS Next 2Y24.32%
EPS Next 3Y21.72%
EPS Next 5Y20.32%
Revenue Next Year8.98%
Revenue Next 2Y9.83%
Revenue Next 3Y9.78%
Revenue Next 5Y9.61%
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
With a Price/Earnings ratio of 57.30, HWM can be considered very expensive at the moment.
HWM's Price/Earnings ratio is in line with the industry average.
HWM's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 26.55.
A Price/Forward Earnings ratio of 41.07 indicates a quite expensive valuation of HWM.
HWM's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of HWM to the average of the S&P500 Index (22.40), we can say HWM is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 57.3 | ||
| Fwd PE | 41.07 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as HWM.
HWM's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 67.97 | ||
| EV/EBITDA | 34.56 |
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 excellent profitability rating of HWM may justify a higher PE ratio.
HWM's earnings are expected to grow with 21.72% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.82
PEG (5Y)11.75
EPS Next 2Y24.32%
EPS Next 3Y21.72%
5. Dividend
5.1 Amount
With a yearly dividend of 0.23%, HWM is not a good candidate for dividend investing.
HWM's Dividend Yield is a higher than the industry average which is at 1.29.
With a Dividend Yield of 0.23, HWM pays less dividend than the S&P500 average, which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.23% |
5.2 History
On average, the dividend of HWM grows each year by 16.52%, which is quite nice.
HWM has paid a dividend for at least 10 years, which is a reliable track record.
HWM has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)16.52%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
10.37% of the earnings are spent on dividend by HWM. This is a low number and sustainable payout ratio.
HWM's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP10.37%
EPS Next 2Y24.32%
EPS Next 3Y21.72%
170.74
+2.12 (+1.26%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners92.82%
Inst Owner Change1.74%
Ins Owners1.05%
Ins Owner Change2.41%
Market Cap69.06B
Analysts80.67
Price Target166.96 (-2.21%)
Short Float %2.9%
Short Ratio3.92
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.23% |
Yearly Dividend0.27
Dividend Growth(5Y)16.52%
DP10.37%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.76%
Min EPS beat(2)2.1%
Max EPS beat(2)9.41%
EPS beat(4)4
Avg EPS beat(4)7.31%
Min EPS beat(4)2.1%
Max EPS beat(4)10.4%
EPS beat(8)8
Avg EPS beat(8)7.22%
EPS beat(12)10
Avg EPS beat(12)6.08%
EPS beat(16)14
Avg EPS beat(16)5.42%
Revenue beat(2)0
Avg Revenue beat(2)-0.67%
Min Revenue beat(2)-1.02%
Max Revenue beat(2)-0.32%
Revenue beat(4)1
Avg Revenue beat(4)-0.46%
Min Revenue beat(4)-1.87%
Max Revenue beat(4)1.35%
Revenue beat(8)5
Avg Revenue beat(8)1.24%
Revenue beat(12)8
Avg Revenue beat(12)1.48%
Revenue beat(16)9
Avg Revenue beat(16)0.63%
PT rev (1m)4.83%
PT rev (3m)19.46%
EPS NQ rev (1m)2.11%
EPS NQ rev (3m)7.95%
EPS NY rev (1m)6.97%
EPS NY rev (3m)6.18%
Revenue NQ rev (1m)0.1%
Revenue NQ rev (3m)-0.15%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)-0.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 57.3 | ||
| Fwd PE | 41.07 | ||
| P/S | 9.15 | ||
| P/FCF | 67.97 | ||
| P/OCF | 50.26 | ||
| P/B | 14.41 | ||
| P/tB | 234.89 | ||
| EV/EBITDA | 34.56 |
EPS(TTM)2.98
EY1.75%
EPS(NY)4.16
Fwd EY2.43%
FCF(TTM)2.51
FCFY1.47%
OCF(TTM)3.4
OCFY1.99%
SpS18.66
BVpS11.85
TBVpS0.73
PEG (NY)1.82
PEG (5Y)11.75
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.64% | ||
| ROE | 26.17% | ||
| ROCE | 19.24% | ||
| ROIC | 15.58% | ||
| ROICexc | 16.55% | ||
| ROICexgc | 34.31% | ||
| OM | 23.52% | ||
| PM (TTM) | 16.61% | ||
| GM | 32.18% | ||
| FCFM | 13.46% |
ROA(3y)7.61%
ROA(5y)5.52%
ROE(3y)19.06%
ROE(5y)14.35%
ROIC(3y)11.81%
ROIC(5y)9.94%
ROICexc(3y)12.73%
ROICexc(5y)10.88%
ROICexgc(3y)28.49%
ROICexgc(5y)24.58%
ROCE(3y)14.58%
ROCE(5y)12.27%
ROICexcg growth 3Y22.26%
ROICexcg growth 5Y20.98%
ROICexc growth 3Y24.64%
ROICexc growth 5Y14.79%
OM growth 3Y9.72%
OM growth 5Y6.18%
PM growth 3Y44.45%
PM growth 5Y18.67%
GM growth 3Y3.97%
GM growth 5Y3.11%
F-Score9
Asset Turnover0.7
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.69 | ||
| Debt/FCF | 3.27 | ||
| Debt/EBITDA | 1.61 | ||
| Cap/Depr | 128.32% | ||
| Cap/Sales | 4.74% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 66.89% | ||
| Profit Quality | 81.02% | ||
| Current Ratio | 2.3 | ||
| Quick Ratio | 1.07 | ||
| Altman-Z | 8.71 |
F-Score9
WACC10.27%
ROIC/WACC1.52
Cap/Depr(3y)89.74%
Cap/Depr(5y)84.39%
Cap/Sales(3y)3.68%
Cap/Sales(5y)4.02%
Profit Quality(3y)96.58%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)49%
EPS 3Y38.62%
EPS 5Y4.88%
EPS Q2Q%50.88%
EPS Next Y31.48%
EPS Next 2Y24.32%
EPS Next 3Y21.72%
EPS Next 5Y20.32%
Revenue 1Y (TTM)10.01%
Revenue growth 3Y14.33%
Revenue growth 5Y0.92%
Sales Q2Q%6.47%
Revenue Next Year8.98%
Revenue Next 2Y9.83%
Revenue Next 3Y9.78%
Revenue Next 5Y9.61%
EBIT growth 1Y35.6%
EBIT growth 3Y25.44%
EBIT growth 5Y7.15%
EBIT Next Year41.1%
EBIT Next 3Y22.91%
EBIT Next 5Y18.33%
FCF growth 1Y100.79%
FCF growth 3Y57.51%
FCF growth 5YN/A
OCF growth 1Y96.01%
OCF growth 3Y42.45%
OCF growth 5Y23%