HOWMET AEROSPACE INC (HWM) Stock Fundamental Analysis
NYSE:HWM - US4432011082 - Common Stock
184.21 USD
+0.41 (+0.22%)
184.002 USD
-0.21 (-0.11%)
HWM gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 68 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. This makes HWM very considerable for growth and quality investing!
1. Profitability
1.1 Basic Checks
In the past year HWM was profitable.
HWM had a positive operating cash flow in the past year.
In the past 5 years HWM has always been profitable.
HWM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
HWM has a Return On Assets of 12.63%. This is amongst the best in the industry. HWM outperforms 95.59% of its industry peers.
HWM has a Return On Equity of 27.67%. This is amongst the best in the industry. HWM outperforms 97.06% of its industry peers.
Looking at the Return On Invested Capital, with a value of 16.08%, HWM belongs to the top of the industry, outperforming 98.53% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for HWM is above the industry average of 8.21%.
The 3 year average ROIC (11.81%) for HWM is below the current ROIC(16.08%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.63% | ||
| ROE | 27.67% | ||
| ROIC | 16.08% |
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
The Profit Margin of HWM (18.07%) is better than 97.06% of its industry peers.
In the last couple of years the Profit Margin of HWM has grown nicely.
HWM has a better Operating Margin (24.30%) than 98.53% of its industry peers.
HWM's Operating Margin has improved in the last couple of years.
HWM has a Gross Margin of 32.69%. This is in the better half of the industry: HWM outperforms 69.12% of its industry peers.
HWM's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 24.3% | ||
| PM (TTM) | 18.07% | ||
| GM | 32.69% |
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.
Compared to 5 years ago, HWM has less shares outstanding
The debt/assets ratio for HWM has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 9.33 indicates that HWM is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 9.33, HWM belongs to the best of the industry, outperforming 83.82% of the companies in the same industry.
HWM has a debt to FCF ratio of 3.20. This is a good value and a sign of high solvency as HWM would need 3.20 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.20, HWM belongs to the top of the industry, outperforming 85.29% of the companies in the same industry.
HWM has a Debt/Equity ratio of 0.65. This is a neutral value indicating HWM is somewhat dependend on debt financing.
The Debt to Equity ratio of HWM (0.65) is worse than 66.18% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.65 | ||
| Debt/FCF | 3.2 | ||
| Altman-Z | 9.33 |
ROIC/WACC1.69
WACC9.54%
2.3 Liquidity
HWM has a Current Ratio of 2.31. This indicates that HWM is financially healthy and has no problem in meeting its short term obligations.
HWM's Current ratio of 2.31 is in line compared to the rest of the industry. HWM outperforms 50.00% of its industry peers.
HWM has a Quick Ratio of 1.08. This is a normal value and indicates that HWM is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of HWM (1.08) is worse than 64.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.31 | ||
| Quick Ratio | 1.08 |
3. Growth
3.1 Past
HWM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 44.39%, which is quite impressive.
HWM shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.88% yearly.
Looking at the last year, HWM shows a quite strong growth in Revenue. The Revenue has grown by 8.85% in the last year.
The Revenue has been growing slightly by 0.92% on average over the past years.
EPS 1Y (TTM)44.39%
EPS 3Y38.62%
EPS 5Y4.88%
EPS Q2Q%35.82%
Revenue 1Y (TTM)8.85%
Revenue growth 3Y14.33%
Revenue growth 5Y0.92%
Sales Q2Q%9.2%
3.2 Future
HWM is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 20.95% yearly.
The Revenue is expected to grow by 9.94% on average over the next years. This is quite good.
EPS Next Y36.26%
EPS Next 2Y27.53%
EPS Next 3Y23.94%
EPS Next 5Y20.95%
Revenue Next Year9.96%
Revenue Next 2Y10.43%
Revenue Next 3Y10.33%
Revenue Next 5Y9.94%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 57.21 indicates a quite expensive valuation of HWM.
The rest of the industry has a similar Price/Earnings ratio as HWM.
When comparing the Price/Earnings ratio of HWM to the average of the S&P500 Index (27.44), we can say HWM is valued expensively.
The Price/Forward Earnings ratio is 42.11, which means the current valuation is very expensive for HWM.
HWM's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.87, HWM is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 57.21 | ||
| Fwd PE | 42.11 |
4.2 Price Multiples
HWM's Enterprise Value to EBITDA ratio is in line with the industry average.
HWM's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 72.95 | ||
| EV/EBITDA | 35.64 |
4.3 Compensation for Growth
HWM's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of HWM may justify a higher PE ratio.
HWM's earnings are expected to grow with 23.94% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.58
PEG (5Y)11.73
EPS Next 2Y27.53%
EPS Next 3Y23.94%
5. Dividend
5.1 Amount
With a yearly dividend of 0.27%, HWM is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.52, HWM pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.27, HWM pays less dividend than the S&P500 average, which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.27% |
5.2 History
The dividend of HWM is nicely growing with an annual growth rate of 16.52%!
HWM has been paying a dividend for at least 10 years, so it has 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
10.75% of the earnings are spent on dividend by HWM. This is a low number and sustainable payout ratio.
The dividend of HWM is growing, but earnings are growing more, so the dividend growth is sustainable.
DP10.75%
EPS Next 2Y27.53%
EPS Next 3Y23.94%
184.21
+0.41 (+0.22%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners95.04%
Inst Owner Change-2.41%
Ins Owners1.11%
Ins Owner Change2.85%
Market Cap74.26B
Analysts80.67
Price Target202.47 (9.91%)
Short Float %2.78%
Short Ratio3.42
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.27% |
Yearly Dividend0.27
Dividend Growth(5Y)16.52%
DP10.75%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.37%
Min EPS beat(2)3.32%
Max EPS beat(2)9.41%
EPS beat(4)4
Avg EPS beat(4)5.54%
Min EPS beat(4)2.1%
Max EPS beat(4)9.41%
EPS beat(8)8
Avg EPS beat(8)7.53%
EPS beat(12)10
Avg EPS beat(12)5.88%
EPS beat(16)14
Avg EPS beat(16)5.61%
Revenue beat(2)1
Avg Revenue beat(2)0.11%
Min Revenue beat(2)-1.02%
Max Revenue beat(2)1.23%
Revenue beat(4)1
Avg Revenue beat(4)-0.49%
Min Revenue beat(4)-1.87%
Max Revenue beat(4)1.23%
Revenue beat(8)5
Avg Revenue beat(8)1.23%
Revenue beat(12)8
Avg Revenue beat(12)1.51%
Revenue beat(16)10
Avg Revenue beat(16)0.87%
PT rev (1m)0.83%
PT rev (3m)21.26%
EPS NQ rev (1m)1.57%
EPS NQ rev (3m)9.46%
EPS NY rev (1m)3.34%
EPS NY rev (3m)3.63%
Revenue NQ rev (1m)0.34%
Revenue NQ rev (3m)0.44%
Revenue NY rev (1m)0.91%
Revenue NY rev (3m)0.89%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 57.21 | ||
| Fwd PE | 42.11 | ||
| P/S | 9.62 | ||
| P/FCF | 72.95 | ||
| P/OCF | 52.19 | ||
| P/B | 14.73 | ||
| P/tB | 145.61 | ||
| EV/EBITDA | 35.64 |
EPS(TTM)3.22
EY1.75%
EPS(NY)4.37
Fwd EY2.37%
FCF(TTM)2.53
FCFY1.37%
OCF(TTM)3.53
OCFY1.92%
SpS19.15
BVpS12.51
TBVpS1.27
PEG (NY)1.58
PEG (5Y)11.73
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.63% | ||
| ROE | 27.67% | ||
| ROCE | 19.86% | ||
| ROIC | 16.08% | ||
| ROICexc | 17.07% | ||
| ROICexgc | 34.78% | ||
| OM | 24.3% | ||
| PM (TTM) | 18.07% | ||
| GM | 32.69% | ||
| FCFM | 13.18% |
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-Score8
Asset Turnover0.7
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.65 | ||
| Debt/FCF | 3.2 | ||
| Debt/EBITDA | 1.51 | ||
| Cap/Depr | 145.16% | ||
| Cap/Sales | 5.25% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 66.03% | ||
| Profit Quality | 72.97% | ||
| Current Ratio | 2.31 | ||
| Quick Ratio | 1.08 | ||
| Altman-Z | 9.33 |
F-Score8
WACC9.54%
ROIC/WACC1.69
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)44.39%
EPS 3Y38.62%
EPS 5Y4.88%
EPS Q2Q%35.82%
EPS Next Y36.26%
EPS Next 2Y27.53%
EPS Next 3Y23.94%
EPS Next 5Y20.95%
Revenue 1Y (TTM)8.85%
Revenue growth 3Y14.33%
Revenue growth 5Y0.92%
Sales Q2Q%9.2%
Revenue Next Year9.96%
Revenue Next 2Y10.43%
Revenue Next 3Y10.33%
Revenue Next 5Y9.94%
EBIT growth 1Y30.19%
EBIT growth 3Y25.44%
EBIT growth 5Y7.15%
EBIT Next Year43.54%
EBIT Next 3Y23.07%
EBIT Next 5Y17.33%
FCF growth 1Y75.52%
FCF growth 3Y57.51%
FCF growth 5YN/A
OCF growth 1Y84.33%
OCF growth 3Y42.45%
OCF growth 5Y23%