HOWMET AEROSPACE INC (HWM) Stock Fundamental Analysis
NYSE:HWM - New York Stock Exchange, Inc. - US4432011082 - Common Stock - Currency: USD
HWM gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 64 industry peers in the Aerospace & Defense industry. HWM has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. HWM is not priced too expensively while it is growing strongly. Keep and eye on this one! 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.
Each year in the past 5 years HWM has been profitable.
Each year in the past 5 years HWM had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 11.64%, HWM belongs to the top of the industry, outperforming 95.31% of the companies in the same industry.
HWM has a better Return On Equity (26.17%) than 95.31% of its industry peers.
HWM has a Return On Invested Capital of 15.58%. This is amongst the best in the industry. HWM outperforms 96.88% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HWM is above the industry average of 7.94%.
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 93.75% of its industry peers.
HWM's Profit Margin has improved in the last couple of years.
The Operating Margin of HWM (23.52%) is better than 98.44% of its industry peers.
HWM's Operating Margin has improved in the last couple of years.
HWM has a better Gross Margin (32.18%) than 70.31% 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.
Compared to 5 years ago, HWM has less shares outstanding
HWM has a better debt/assets ratio than last year.
2.2 Solvency
HWM has an Altman-Z score of 8.57. This indicates that HWM is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 8.57, HWM belongs to the top of the industry, outperforming 84.38% of the companies in the same industry.
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.
Looking at the Debt to FCF ratio, with a value of 3.27, HWM belongs to the top of the industry, outperforming 89.06% of the companies in the same industry.
A Debt/Equity ratio of 0.69 indicates that HWM is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.69, HWM is doing worse than 65.63% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.69 | ||
| Debt/FCF | 3.27 | ||
| Altman-Z | 8.57 |
ROIC/WACC1.54
WACC10.12%
2.3 Liquidity
A Current Ratio of 2.30 indicates that HWM has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.30, HWM is in line with its industry, outperforming 53.13% of the companies in the same industry.
HWM has a Quick Ratio of 1.07. This is a normal value and indicates that HWM is financially healthy and should not expect problems in meeting 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 68.75% 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.
The Earnings Per Share has been growing slightly by 4.88% on average over the past years.
HWM shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.01%.
The Revenue has been growing slightly by 0.92% on average over the past years.
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 22.94% on average per year.
Based on estimates for the next years, HWM will show a quite strong growth in Revenue. The Revenue will grow by 11.36% on average per year.
EPS Next Y31.48%
EPS Next 2Y24.32%
EPS Next 3Y21.72%
EPS Next 5Y22.94%
Revenue Next Year8.93%
Revenue Next 2Y9.71%
Revenue Next 3Y9.52%
Revenue Next 5Y11.36%
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
HWM is valuated quite expensively with a Price/Earnings ratio of 54.62.
Compared to the rest of the industry, the Price/Earnings ratio of HWM is on the same level as its industry peers.
HWM's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 26.03.
Based on the Price/Forward Earnings ratio of 39.15, the valuation of HWM can be described as expensive.
HWM's Price/Forward Earnings is on the same level as the industry average.
HWM's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 21.94.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 54.62 | ||
| Fwd PE | 39.15 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as HWM.
Based on the Price/Free Cash Flow ratio, HWM is valued a bit cheaper than the industry average as 60.94% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 64.79 | ||
| EV/EBITDA | 33.87 |
4.3 Compensation for Growth
HWM's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
HWM has an outstanding profitability rating, which 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)1.73
PEG (5Y)11.2
EPS Next 2Y24.32%
EPS Next 3Y21.72%
5. Dividend
5.1 Amount
With a yearly dividend of 0.25%, HWM is not a good candidate for dividend investing.
HWM's Dividend Yield is a higher than the industry average which is at 1.34.
Compared to an average S&P500 Dividend Yield of 2.36, HWM's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.25% |
5.2 History
On average, the dividend of HWM grows each year by 16.52%, which is quite nice.
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
HWM pays out 10.37% of its income as dividend. This is a 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%
162.76
-2.34 (-1.42%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners92.82%
Inst Owner Change1.81%
Ins Owners1.05%
Ins Owner Change2.19%
Market Cap65.83B
Analysts80.67
Price Target159.27 (-2.14%)
Short Float %2.64%
Short Ratio3.4
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.25% |
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)13.25%
PT rev (3m)26.39%
EPS NQ rev (1m)7.33%
EPS NQ rev (3m)11.18%
EPS NY rev (1m)6.97%
EPS NY rev (3m)9.15%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.85%
Revenue NY rev (1m)-0.16%
Revenue NY rev (3m)0.46%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 54.62 | ||
| Fwd PE | 39.15 | ||
| P/S | 8.72 | ||
| P/FCF | 64.79 | ||
| P/OCF | 47.91 | ||
| P/B | 13.74 | ||
| P/tB | 223.91 | ||
| EV/EBITDA | 33.87 |
EPS(TTM)2.98
EY1.83%
EPS(NY)4.16
Fwd EY2.55%
FCF(TTM)2.51
FCFY1.54%
OCF(TTM)3.4
OCFY2.09%
SpS18.66
BVpS11.85
TBVpS0.73
PEG (NY)1.73
PEG (5Y)11.2
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 | 8.57 |
F-Score9
WACC10.12%
ROIC/WACC1.54
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 5Y22.94%
Revenue 1Y (TTM)10.01%
Revenue growth 3Y14.33%
Revenue growth 5Y0.92%
Sales Q2Q%6.47%
Revenue Next Year8.93%
Revenue Next 2Y9.71%
Revenue Next 3Y9.52%
Revenue Next 5Y11.36%
EBIT growth 1Y35.6%
EBIT growth 3Y25.44%
EBIT growth 5Y7.15%
EBIT Next Year34.33%
EBIT Next 3Y21.22%
EBIT Next 5Y19.91%
FCF growth 1Y100.79%
FCF growth 3Y57.51%
FCF growth 5YN/A
OCF growth 1Y96.01%
OCF growth 3Y42.45%
OCF growth 5Y23%