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 65 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 valued quite expensively, but it does show have an excellent growth rating. These ratings would make HWM suitable 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.
Each year in the past 5 years HWM has been profitable.
HWM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
HWM has a better Return On Assets (11.64%) than 95.38% of its industry peers.
HWM has a Return On Equity of 26.17%. This is amongst the best in the industry. HWM outperforms 95.38% of its industry peers.
HWM has a Return On Invested Capital of 15.58%. This is amongst the best in the industry. HWM outperforms 96.92% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for HWM is above the industry average of 8.44%.
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
With an excellent Profit Margin value of 16.61%, HWM belongs to the best of the industry, outperforming 95.38% of the companies in the same industry.
In the last couple of years the Profit Margin of HWM has grown nicely.
Looking at the Operating Margin, with a value of 23.52%, HWM belongs to the top of the industry, outperforming 98.46% of the companies in the same industry.
In the last couple of years the Operating Margin of HWM has grown nicely.
With a decent Gross Margin value of 32.18%, HWM is doing good in the industry, outperforming 70.77% of the companies in the same industry.
In the last couple of years the Gross Margin of HWM has grown nicely.
| 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.
Compared to 1 year ago, HWM has less shares outstanding
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 9.21 indicates that HWM is not in any danger for bankruptcy at the moment.
The Altman-Z score of HWM (9.21) is better than 86.15% of its industry peers.
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.
HWM has a Debt to FCF ratio of 3.27. This is amongst the best in the industry. HWM outperforms 84.62% of its industry peers.
A Debt/Equity ratio of 0.69 indicates that HWM is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.69, HWM is not doing good in the industry: 66.15% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.69 | ||
| Debt/FCF | 3.27 | ||
| Altman-Z | 9.21 |
ROIC/WACC1.55
WACC10.05%
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 comparable to the rest of the 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 has a worse Quick ratio (1.07) than 66.15% 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.
HWM shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.88% yearly.
HWM shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.01%.
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
Based on estimates for the next years, HWM will show a quite strong growth in Revenue. The Revenue will grow by 9.61% on average per year.
EPS Next Y31.91%
EPS Next 2Y25.1%
EPS Next 3Y22.46%
EPS Next 5Y20.32%
Revenue Next Year8.93%
Revenue Next 2Y9.66%
Revenue Next 3Y9.54%
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.
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
With a Price/Earnings ratio of 60.76, HWM can be considered very expensive at the moment.
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 (27.45), we can say HWM is valued expensively.
Based on the Price/Forward Earnings ratio of 43.01, the valuation of HWM can be described as expensive.
HWM's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 21.90. HWM is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 60.76 | ||
| Fwd PE | 43.01 |
4.2 Price Multiples
HWM's Enterprise Value to EBITDA ratio is in line with the industry average.
HWM's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 72.08 | ||
| EV/EBITDA | 37.01 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of HWM may justify a higher PE ratio.
HWM's earnings are expected to grow with 22.46% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.9
PEG (5Y)12.46
EPS Next 2Y25.1%
EPS Next 3Y22.46%
5. Dividend
5.1 Amount
With a yearly dividend of 0.23%, HWM is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.27, HWM pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.23, HWM pays less dividend than the S&P500 average, which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.23% |
5.2 History
On average, the dividend of HWM grows each year by 16.52%, which is quite nice.
HWM has paid a dividend for at least 10 years, which is 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 2Y25.1%
EPS Next 3Y22.46%
181.06
+5.11 (+2.9%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners94.49%
Inst Owner Change1.74%
Ins Owners1.05%
Ins Owner Change2.41%
Market Cap73.23B
Analysts80.67
Price Target176.87 (-2.31%)
Short Float %3.03%
Short Ratio3.73
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.23% |
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)11.05%
PT rev (3m)26.55%
EPS NQ rev (1m)0%
EPS NQ rev (3m)7.86%
EPS NY rev (1m)0.33%
EPS NY rev (3m)6.8%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.05%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 60.76 | ||
| Fwd PE | 43.01 | ||
| P/S | 9.7 | ||
| P/FCF | 72.08 | ||
| P/OCF | 53.3 | ||
| P/B | 15.28 | ||
| P/tB | 249.09 | ||
| EV/EBITDA | 37.01 |
EPS(TTM)2.98
EY1.65%
EPS(NY)4.21
Fwd EY2.33%
FCF(TTM)2.51
FCFY1.39%
OCF(TTM)3.4
OCFY1.88%
SpS18.66
BVpS11.85
TBVpS0.73
PEG (NY)1.9
PEG (5Y)12.46
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 | 9.21 |
F-Score9
WACC10.05%
ROIC/WACC1.55
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 Y31.91%
EPS Next 2Y25.1%
EPS Next 3Y22.46%
EPS Next 5Y20.32%
Revenue 1Y (TTM)10.01%
Revenue growth 3Y14.33%
Revenue growth 5Y0.92%
Sales Q2Q%6.47%
Revenue Next Year8.93%
Revenue Next 2Y9.66%
Revenue Next 3Y9.54%
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%