HOWMET AEROSPACE INC (HWM)

US4432011082 - Common Stock

68.36  +0.28 (+0.41%)

Fundamental Rating

6

HWM gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 65 industry peers in the Aerospace & Defense industry. HWM scores excellent on profitability, but there are some minor concerns on its financial health. HWM has a correct valuation and a medium growth rate.



9

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.
Each year in the past 5 years HWM had a positive operating cash flow.

1.2 Ratios

HWM has a better Return On Assets (7.32%) than 81.54% of its industry peers.
HWM has a Return On Equity of 18.90%. This is amongst the best in the industry. HWM outperforms 90.77% of its industry peers.
HWM's Return On Invested Capital of 11.05% is amongst the best of the industry. HWM outperforms 87.69% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HWM is in line with the industry average of 8.68%.
The 3 year average ROIC (9.00%) for HWM is below the current ROIC(11.05%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 7.32%
ROE 18.9%
ROIC 11.05%
ROA(3y)4.79%
ROA(5y)3.86%
ROE(3y)13.06%
ROE(5y)11.32%
ROIC(3y)9%
ROIC(5y)8.04%

1.3 Margins

HWM has a Profit Margin of 11.49%. This is amongst the best in the industry. HWM outperforms 86.15% of its industry peers.
In the last couple of years the Profit Margin of HWM has grown nicely.
With an excellent Operating Margin value of 18.46%, HWM belongs to the best of the industry, outperforming 92.31% of the companies in the same industry.
In the last couple of years the Operating Margin of HWM has grown nicely.
HWM has a Gross Margin of 28.12%. This is in the better half of the industry: HWM outperforms 73.85% of its industry peers.
HWM's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 18.46%
PM (TTM) 11.49%
GM 28.12%
OM growth 3Y6.32%
OM growth 5Y5.94%
PM growth 3Y32.63%
PM growth 5Y4.01%
GM growth 3Y2.3%
GM growth 5Y2.75%

5

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.
Compared to 1 year ago, HWM has less shares outstanding
The number of shares outstanding for HWM has been reduced compared to 5 years ago.
Compared to 1 year ago, HWM has an improved debt to assets ratio.

2.2 Solvency

An Altman-Z score of 4.05 indicates that HWM is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.05, HWM is in the better half of the industry, outperforming 72.31% of the companies in the same industry.
The Debt to FCF ratio of HWM is 5.43, which is a neutral value as it means it would take HWM, 5.43 years of fcf income to pay off all of its debts.
HWM's Debt to FCF ratio of 5.43 is fine compared to the rest of the industry. HWM outperforms 72.31% of its industry peers.
A Debt/Equity ratio of 0.87 indicates that HWM is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.87, HWM is not doing good in the industry: 70.77% of the companies in the same industry are doing better.
Industry RankSector Rank
Debt/Equity 0.87
Debt/FCF 5.43
Altman-Z 4.05
ROIC/WACC1.29
WACC8.56%

2.3 Liquidity

HWM has a Current Ratio of 1.86. This is a normal value and indicates that HWM is financially healthy and should not expect problems in meeting its short term obligations.
HWM has a Current ratio (1.86) which is comparable to the rest of the industry.
A Quick Ratio of 0.87 indicates that HWM may have some problems paying its short term obligations.
With a Quick ratio value of 0.87, HWM is not doing good in the industry: 76.92% of the companies in the same industry are doing better.
Industry RankSector Rank
Current Ratio 1.86
Quick Ratio 0.87

5

3. Growth

3.1 Past

HWM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 32.14%, which is quite impressive.
The Earnings Per Share has been growing slightly by 6.35% on average over the past years.
HWM shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 17.25%.
The Revenue has been decreasing by -0.41% on average over the past years.
EPS 1Y (TTM)32.14%
EPS 3Y23.59%
EPS 5Y6.35%
EPS growth Q2Q39.47%
Revenue 1Y (TTM)17.25%
Revenue growth 3Y8.08%
Revenue growth 5Y-0.41%
Revenue growth Q2Q14.41%

3.2 Future

The Earnings Per Share is expected to grow by 15.41% on average over the next years. This is quite good.
Based on estimates for the next years, HWM will show a small growth in Revenue. The Revenue will grow by 5.75% on average per year.
EPS Next Y20.68%
EPS Next 2Y20.98%
EPS Next 3Y19.73%
EPS Next 5Y15.41%
Revenue Next Year9.42%
Revenue Next 2Y9.28%
Revenue Next 3Y8.91%
Revenue Next 5Y5.75%

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

4. Valuation

4.1 Price/Earnings Ratio

HWM is valuated quite expensively with a Price/Earnings ratio of 36.95.
HWM's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of HWM to the average of the S&P500 Index (26.42), we can say HWM is valued slightly more expensively.
The Price/Forward Earnings ratio is 30.62, which means the current valuation is very expensive for HWM.
Based on the Price/Forward Earnings ratio, HWM is valued a bit cheaper than 64.62% of the companies in the same industry.
HWM is valuated rather expensively when we compare the Price/Forward Earnings ratio to 22.74, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 36.95
Fwd PE 30.62

4.2 Price Multiples

HWM's Enterprise Value to EBITDA is on the same level as the industry average.
72.31% of the companies in the same industry are more expensive than HWM, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 41.13
EV/EBITDA 20.71

4.3 Compensation for Growth

The 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 19.73% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.79
PEG (5Y)5.82
EPS Next 2Y20.98%
EPS Next 3Y19.73%

3

5. Dividend

5.1 Amount

HWM has a yearly dividend return of 0.30%, which is pretty low.
Compared to an average industry Dividend Yield of 1.30, HWM pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.30, HWM pays less dividend than the S&P500 average, which is at 2.34.
Industry RankSector Rank
Dividend Yield 0.3%

5.2 History

The dividend of HWM decreases each year by -6.39%.
HWM has been paying a dividend for over 5 years, so it has already some track record.
HWM has decreased its dividend in the last 3 years.
Dividend Growth(5Y)-6.39%
Div Incr Years2
Div Non Decr Years2

5.3 Sustainability

HWM pays out 9.57% of its income as dividend. This is a sustainable payout ratio.
DP9.57%
EPS Next 2Y20.98%
EPS Next 3Y19.73%

HOWMET AEROSPACE INC

NYSE:HWM (3/28/2024, 1:48:40 PM)

68.36

+0.28 (+0.41%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap28.05B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 0.3%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 36.95
Fwd PE 30.62
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.79
PEG (5Y)5.82
Profitability
Industry RankSector Rank
ROA 7.32%
ROE 18.9%
ROCE
ROIC
ROICexc
ROICexgc
OM 18.46%
PM (TTM) 11.49%
GM 28.12%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.64
Health
Industry RankSector Rank
Debt/Equity 0.87
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 1.86
Quick Ratio 0.87
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)32.14%
EPS 3Y23.59%
EPS 5Y
EPS growth Q2Q
EPS Next Y20.68%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)17.25%
Revenue growth 3Y8.08%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y