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 67 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. These ratings could make HWM a good candidate 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.
In the past 5 years HWM always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of HWM (11.64%) is better than 95.52% of its industry peers.
Looking at the Return On Equity, with a value of 26.17%, HWM belongs to the top of the industry, outperforming 95.52% of the companies in the same industry.
HWM has a better Return On Invested Capital (15.58%) than 98.51% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HWM is above the industry average of 8.47%.
The 3 year average ROIC (11.81%) for HWM is below the current ROIC(15.58%), indicating increased profibility in the last year.
| 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 has a Profit Margin of 16.61%. This is amongst the best in the industry. HWM outperforms 95.52% 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 23.52%, HWM belongs to the best of the industry, outperforming 98.51% of the companies in the same industry.
HWM's Operating Margin has improved in the last couple of years.
HWM has a better Gross Margin (32.18%) than 71.64% 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so HWM is still creating some value.
The number of shares outstanding for HWM has been reduced compared to 1 year ago.
Compared to 5 years ago, HWM has less shares outstanding
Compared to 1 year ago, HWM has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 9.54 indicates that HWM is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 9.54, HWM belongs to the top of the industry, outperforming 83.58% 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.
With an excellent Debt to FCF ratio value of 3.27, HWM belongs to the best of the industry, outperforming 85.07% of the companies in the same industry.
HWM has a Debt/Equity ratio of 0.69. This is a neutral value indicating HWM is somewhat dependend on debt financing.
HWM's Debt to Equity ratio of 0.69 is on the low side compared to the rest of the industry. HWM is outperformed by 64.18% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.69 | ||
| Debt/FCF | 3.27 | ||
| Altman-Z | 9.54 |
ROIC/WACC1.5
WACC10.39%
2.3 Liquidity
A Current Ratio of 2.30 indicates that HWM has no problem at all paying its short term obligations.
HWM has a Current ratio (2.30) which is in line with its industry peers.
A Quick Ratio of 1.07 indicates that HWM should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.07, HWM is not doing good in the industry: 65.67% of the companies in the same industry are doing better.
| 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.
Measured over the past years, HWM shows a small growth in Revenue. The Revenue has been growing by 0.92% on average per year.
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
The Earnings Per Share is expected to grow by 20.32% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 9.61% on average over the next years. This is quite good.
EPS Next Y31.86%
EPS Next 2Y24.75%
EPS Next 3Y22.03%
EPS Next 5Y20.32%
Revenue Next Year8.94%
Revenue Next 2Y9.57%
Revenue Next 3Y9.45%
Revenue Next 5Y9.61%
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.
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 63.60.
The rest of the industry has a similar Price/Earnings ratio as HWM.
The average S&P500 Price/Earnings ratio is at 28.05. HWM is valued rather expensively when compared to this.
Based on the Price/Forward Earnings ratio of 45.27, the valuation of HWM can be described as expensive.
HWM's Price/Forward Earnings ratio is in line with the industry average.
HWM is valuated rather expensively when we compare the Price/Forward Earnings ratio to 37.67, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 63.6 | ||
| Fwd PE | 45.27 |
4.2 Price Multiples
HWM's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, HWM is valued a bit cheaper than 61.19% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 75.3 | ||
| EV/EBITDA | 38.6 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates HWM does not grow enough to justify the current Price/Earnings ratio.
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)2
PEG (5Y)13.04
EPS Next 2Y24.75%
EPS Next 3Y22.03%
5. Dividend
5.1 Amount
HWM has a yearly dividend return of 0.21%, which is pretty low.
Compared to an average industry Dividend Yield of 1.17, HWM pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.21, HWM pays less dividend than the S&P500 average, which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.21% |
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
HWM pays out 10.37% of its income as dividend. This is a sustainable payout ratio.
The dividend of HWM is growing, but earnings are growing more, so the dividend growth is sustainable.
DP10.37%
EPS Next 2Y24.75%
EPS Next 3Y22.03%
189.52
+2.72 (+1.46%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners94.49%
Inst Owner Change-0.33%
Ins Owners1.05%
Ins Owner Change8.8%
Market Cap76.50B
Analysts80.67
Price Target187.74 (-0.94%)
Short Float %4.03%
Short Ratio4.8
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.21% |
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)6.14%
PT rev (3m)34.16%
EPS NQ rev (1m)-0.07%
EPS NQ rev (3m)7.56%
EPS NY rev (1m)-0.04%
EPS NY rev (3m)7.28%
Revenue NQ rev (1m)0.05%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)0.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 63.6 | ||
| Fwd PE | 45.27 | ||
| P/S | 10.14 | ||
| P/FCF | 75.3 | ||
| P/OCF | 55.68 | ||
| P/B | 15.96 | ||
| P/tB | 260.22 | ||
| EV/EBITDA | 38.6 |
EPS(TTM)2.98
EY1.57%
EPS(NY)4.19
Fwd EY2.21%
FCF(TTM)2.52
FCFY1.33%
OCF(TTM)3.4
OCFY1.8%
SpS18.7
BVpS11.87
TBVpS0.73
PEG (NY)2
PEG (5Y)13.04
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 | 9.54 |
F-Score9
WACC10.39%
ROIC/WACC1.5
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 Y31.86%
EPS Next 2Y24.75%
EPS Next 3Y22.03%
EPS Next 5Y20.32%
Revenue 1Y (TTM)10.01%
Revenue growth 3Y14.33%
Revenue growth 5Y0.92%
Sales Q2Q%6.47%
Revenue Next Year8.94%
Revenue Next 2Y9.57%
Revenue Next 3Y9.45%
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%