HOWMET AEROSPACE INC (HWM) Stock Fundamental Analysis
NYSE:HWM - New York Stock Exchange, Inc. - US4432011082 - Common Stock - Currency: USD
Overall HWM gets a fundamental rating of 7 out of 10. We evaluated HWM against 68 industry peers in the Aerospace & Defense industry. Both the health and profitability get an excellent rating, making HWM a very profitable company, without any liquidiy or solvency issues. HWM is growing strongly while it is still valued neutral. This is a good combination! With these ratings, HWM could be worth investigating further for growth and quality investing!.
1. Profitability
1.1 Basic Checks
In the past year HWM was profitable.
In the past year HWM had a positive cash flow from operations.
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
The Return On Assets of HWM (12.63%) is better than 97.06% of its industry peers.
Looking at the Return On Equity, with a value of 27.67%, HWM belongs to the top of the industry, outperforming 97.06% of the companies in the same industry.
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.
HWM had an Average Return On Invested Capital over the past 3 years of 11.81%. This is above the industry average of 8.58%.
The last Return On Invested Capital (16.08%) for HWM is above the 3 year average (11.81%), which is a sign of increasing profitability.
| 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
HWM has a better Profit Margin (18.07%) than 97.06% of its industry peers.
In the last couple of years the Profit Margin of HWM has grown nicely.
The Operating Margin of HWM (24.30%) is better than 98.53% of its industry peers.
In the last couple of years the Operating Margin of HWM has grown nicely.
The Gross Margin of HWM (32.69%) is better than 72.06% 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
HWM has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
HWM has less shares outstanding than it did 1 year ago.
The number of shares outstanding for HWM has been reduced compared to 5 years ago.
HWM has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 8.83 indicates that HWM is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 8.83, HWM belongs to the top of the industry, outperforming 83.82% of the companies in the same industry.
The Debt to FCF ratio of HWM is 3.20, which is a good value as it means it would take HWM, 3.20 years of fcf income to pay off 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 88.24% of the companies in the same industry.
A Debt/Equity ratio of 0.65 indicates that HWM is somewhat dependend on debt financing.
The Debt to Equity ratio of HWM (0.65) is worse than 64.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.65 | ||
| Debt/FCF | 3.2 | ||
| Altman-Z | 8.83 |
ROIC/WACC1.6
WACC10.04%
2.3 Liquidity
A Current Ratio of 2.31 indicates that HWM has no problem at all paying its short term obligations.
The Current ratio of HWM (2.31) is comparable to the rest of the industry.
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.
HWM has a Quick ratio of 1.08. This is in the lower half of the industry: HWM underperforms 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.
The Earnings Per Share has been growing slightly by 4.88% on average over the past years.
Looking at the last year, HWM shows a quite strong growth in Revenue. The Revenue has grown by 8.85% 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)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
Based on estimates for the next years, HWM will show a very strong growth in Earnings Per Share. The EPS will grow by 20.95% on average per year.
The Revenue is expected to grow by 9.94% on average over the next years. This is quite good.
EPS Next Y31.86%
EPS Next 2Y24.75%
EPS Next 3Y22.03%
EPS Next 5Y20.95%
Revenue Next Year8.97%
Revenue Next 2Y9.59%
Revenue Next 3Y9.45%
Revenue Next 5Y9.94%
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 accelerating.
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
HWM is valuated quite expensively with a Price/Earnings ratio of 53.18.
The rest of the industry has a similar Price/Earnings ratio as HWM.
The average S&P500 Price/Earnings ratio is at 26.84. HWM is valued rather expensively when compared to this.
A Price/Forward Earnings ratio of 40.91 indicates a quite expensive valuation of HWM.
Compared to the rest of the industry, the Price/Forward Earnings ratio of HWM is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 35.29, HWM is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 53.18 | ||
| Fwd PE | 40.91 |
4.2 Price Multiples
HWM's Enterprise Value to EBITDA is on the same level as the industry average.
HWM's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. HWM is cheaper than 60.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 67.91 | ||
| EV/EBITDA | 33.34 |
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.
A more expensive valuation may be justified as HWM's earnings are expected to grow with 22.03% in the coming years.
PEG (NY)1.67
PEG (5Y)10.9
EPS Next 2Y24.75%
EPS Next 3Y22.03%
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 1.19, HWM pays a bit more dividend than its industry peers.
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 | 0.27% |
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.
HWM's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP10.75%
EPS Next 2Y24.75%
EPS Next 3Y22.03%
171.25
-4.74 (-2.69%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners95.04%
Inst Owner Change-2.44%
Ins Owners1.11%
Ins Owner Change4.28%
Market Cap69.13B
Analysts80.67
Price Target200.79 (17.25%)
Short Float %3.42%
Short Ratio4.3
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)13.52%
PT rev (3m)26.07%
EPS NQ rev (1m)3.78%
EPS NQ rev (3m)9.28%
EPS NY rev (1m)0%
EPS NY rev (3m)0.29%
Revenue NQ rev (1m)0.59%
Revenue NQ rev (3m)0.44%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)0.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 53.18 | ||
| Fwd PE | 40.91 | ||
| P/S | 8.95 | ||
| P/FCF | 67.91 | ||
| P/OCF | 48.58 | ||
| P/B | 13.71 | ||
| P/tB | 135.55 | ||
| EV/EBITDA | 33.34 |
EPS(TTM)3.22
EY1.88%
EPS(NY)4.19
Fwd EY2.44%
FCF(TTM)2.52
FCFY1.47%
OCF(TTM)3.53
OCFY2.06%
SpS19.13
BVpS12.49
TBVpS1.26
PEG (NY)1.67
PEG (5Y)10.9
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 | 8.83 |
F-Score8
WACC10.04%
ROIC/WACC1.6
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 Y31.86%
EPS Next 2Y24.75%
EPS Next 3Y22.03%
EPS Next 5Y20.95%
Revenue 1Y (TTM)8.85%
Revenue growth 3Y14.33%
Revenue growth 5Y0.92%
Sales Q2Q%9.2%
Revenue Next Year8.97%
Revenue Next 2Y9.59%
Revenue Next 3Y9.45%
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%