INSTEEL INDUSTRIES INC (IIIN) Stock Fundamental Analysis
NYSE:IIIN - New York Stock Exchange, Inc. - US45774W1080 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to IIIN. IIIN was compared to 41 industry peers in the Building Products industry. While IIIN has a great health rating, its profitability is only average at the moment. IIIN is growing strongly while it also seems undervalued. This is an interesting combination This makes IIIN very considerable for value and growth investing!
1. Profitability
1.1 Basic Checks
IIIN had positive earnings in the past year.
In the past year IIIN had a positive cash flow from operations.
IIIN had positive earnings in each of the past 5 years.
Each year in the past 5 years IIIN had a positive operating cash flow.
1.2 Ratios
With a Return On Assets value of 6.60%, IIIN perfoms like the industry average, outperforming 53.66% of the companies in the same industry.
IIIN has a worse Return On Equity (8.74%) than 60.98% of its industry peers.
IIIN has a worse Return On Invested Capital (8.13%) than 60.98% of its industry peers.
The Average Return On Invested Capital over the past 3 years for IIIN is in line with the industry average of 12.68%.
The last Return On Invested Capital (8.13%) for IIIN is well below the 3 year average (13.67%), which needs to be investigated, but indicates that IIIN had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.6% | ||
| ROE | 8.74% | ||
| ROIC | 8.13% |
ROA(3y)12.77%
ROA(5y)12.2%
ROE(3y)15.36%
ROE(5y)15.06%
ROIC(3y)13.67%
ROIC(5y)13.79%
1.3 Margins
IIIN has a worse Profit Margin (5.15%) than 63.41% of its industry peers.
In the last couple of years the Profit Margin of IIIN has grown nicely.
With a Operating Margin value of 6.67%, IIIN is not doing good in the industry: 73.17% of the companies in the same industry are doing better.
In the last couple of years the Operating Margin of IIIN has grown nicely.
IIIN has a Gross Margin of 12.75%. This is amonst the worse of the industry: IIIN underperforms 95.12% of its industry peers.
In the last couple of years the Gross Margin of IIIN has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.67% | ||
| PM (TTM) | 5.15% | ||
| GM | 12.75% |
OM growth 3Y-36.94%
OM growth 5Y25.24%
PM growth 3Y-31.35%
PM growth 5Y24.31%
GM growth 3Y-23.04%
GM growth 5Y7.26%
2. Health
2.1 Basic Checks
IIIN has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
IIIN has less shares outstanding than it did 1 year ago.
The number of shares outstanding for IIIN has been increased compared to 5 years ago.
There is no outstanding debt for IIIN. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
An Altman-Z score of 6.31 indicates that IIIN is not in any danger for bankruptcy at the moment.
IIIN's Altman-Z score of 6.31 is fine compared to the rest of the industry. IIIN outperforms 78.05% of its industry peers.
There is no outstanding debt for IIIN. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 6.31 |
ROIC/WACC0.83
WACC9.82%
2.3 Liquidity
IIIN has a Current Ratio of 2.94. This indicates that IIIN is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of IIIN (2.94) is better than 80.49% of its industry peers.
IIIN has a Quick Ratio of 1.61. This is a normal value and indicates that IIIN is financially healthy and should not expect problems in meeting its short term obligations.
IIIN has a better Quick ratio (1.61) than 73.17% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.94 | ||
| Quick Ratio | 1.61 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 53.85% over the past year.
Measured over the past years, IIIN shows a very strong growth in Earnings Per Share. The EPS has been growing by 33.90% on average per year.
The Revenue has grown by 9.44% in the past year. This is quite good.
IIIN shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.04% yearly.
EPS 1Y (TTM)53.85%
EPS 3Y-34.48%
EPS 5Y33.9%
EPS Q2Q%129.41%
Revenue 1Y (TTM)9.44%
Revenue growth 3Y-3.59%
Revenue growth 5Y3.04%
Sales Q2Q%23.4%
3.2 Future
Based on estimates for the next years, IIIN will show a very strong growth in Earnings Per Share. The EPS will grow by 48.84% on average per year.
The Revenue is expected to grow by 12.71% on average over the next years. This is quite good.
EPS Next Y71.55%
EPS Next 2Y75.22%
EPS Next 3Y48.84%
EPS Next 5YN/A
Revenue Next Year20.58%
Revenue Next 2Y15.18%
Revenue Next 3Y12.71%
Revenue Next 5YN/A
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
The Price/Earnings ratio is 22.42, which indicates a rather expensive current valuation of IIIN.
Compared to the rest of the industry, the Price/Earnings ratio of IIIN is on the same level as its industry peers.
When comparing the Price/Earnings ratio of IIIN to the average of the S&P500 Index (26.48), we can say IIIN is valued inline with the index average.
IIIN is valuated reasonably with a Price/Forward Earnings ratio of 11.80.
Based on the Price/Forward Earnings ratio, IIIN is valued cheaply inside the industry as 82.93% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 34.04. IIIN is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.42 | ||
| Fwd PE | 11.8 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of IIIN indicates a somewhat cheap valuation: IIIN is cheaper than 68.29% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, IIIN is valued cheaper than 85.37% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.33 | ||
| EV/EBITDA | 10.91 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
IIIN's earnings are expected to grow with 48.84% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.31
PEG (5Y)0.66
EPS Next 2Y75.22%
EPS Next 3Y48.84%
5. Dividend
5.1 Amount
With a yearly dividend of 0.33%, IIIN is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.15, IIIN has a dividend in line with its industry peers.
With a Dividend Yield of 0.33, IIIN pays less dividend than the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.33% |
5.2 History
The dividend of IIIN is nicely growing with an annual growth rate of 85.37%!
IIIN has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)85.37%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
69.88% of the earnings are spent on dividend by IIIN. This is not a sustainable payout ratio.
IIIN's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP69.88%
EPS Next 2Y75.22%
EPS Next 3Y48.84%
35.87
+0.48 (+1.36%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners87.04%
Inst Owner Change-0.77%
Ins Owners4.73%
Ins Owner Change2.34%
Market Cap696.24M
Analysts43.33
Price Target39.78 (10.9%)
Short Float %2.15%
Short Ratio2.82
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.33% |
Yearly Dividend2.62
Dividend Growth(5Y)85.37%
DP69.88%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)61.49%
Min EPS beat(2)34.16%
Max EPS beat(2)88.82%
EPS beat(4)3
Avg EPS beat(4)26.46%
Min EPS beat(4)-24.1%
Max EPS beat(4)88.82%
EPS beat(8)5
Avg EPS beat(8)7.55%
EPS beat(12)5
Avg EPS beat(12)-5.99%
EPS beat(16)8
Avg EPS beat(16)2.09%
Revenue beat(2)2
Avg Revenue beat(2)3.17%
Min Revenue beat(2)1.24%
Max Revenue beat(2)5.11%
Revenue beat(4)3
Avg Revenue beat(4)1.33%
Min Revenue beat(4)-9.32%
Max Revenue beat(4)8.28%
Revenue beat(8)3
Avg Revenue beat(8)-3.46%
Revenue beat(12)3
Avg Revenue beat(12)-5.74%
Revenue beat(16)5
Avg Revenue beat(16)-3.37%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)23.81%
EPS NQ rev (3m)43.12%
EPS NY rev (1m)0%
EPS NY rev (3m)23.33%
Revenue NQ rev (1m)5.17%
Revenue NQ rev (3m)6.76%
Revenue NY rev (1m)2.84%
Revenue NY rev (3m)2.84%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.42 | ||
| Fwd PE | 11.8 | ||
| P/S | 1.15 | ||
| P/FCF | 13.33 | ||
| P/OCF | 11.53 | ||
| P/B | 1.95 | ||
| P/tB | 2.31 | ||
| EV/EBITDA | 10.91 |
EPS(TTM)1.6
EY4.46%
EPS(NY)3.04
Fwd EY8.47%
FCF(TTM)2.69
FCFY7.5%
OCF(TTM)3.11
OCFY8.68%
SpS31.15
BVpS18.35
TBVpS15.53
PEG (NY)0.31
PEG (5Y)0.66
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.6% | ||
| ROE | 8.74% | ||
| ROCE | 10.55% | ||
| ROIC | 8.13% | ||
| ROICexc | 9.46% | ||
| ROICexgc | 11.35% | ||
| OM | 6.67% | ||
| PM (TTM) | 5.15% | ||
| GM | 12.75% | ||
| FCFM | 8.64% |
ROA(3y)12.77%
ROA(5y)12.2%
ROE(3y)15.36%
ROE(5y)15.06%
ROIC(3y)13.67%
ROIC(5y)13.79%
ROICexc(3y)16.6%
ROICexc(5y)17.63%
ROICexgc(3y)17.46%
ROICexgc(5y)18.79%
ROCE(3y)17.74%
ROCE(5y)17.9%
ROICexcg growth 3Y-42.14%
ROICexcg growth 5Y24.68%
ROICexc growth 3Y-41.77%
ROICexc growth 5Y25.14%
OM growth 3Y-36.94%
OM growth 5Y25.24%
PM growth 3Y-31.35%
PM growth 5Y24.31%
GM growth 3Y-23.04%
GM growth 5Y7.26%
F-Score7
Asset Turnover1.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 46.14% | ||
| Cap/Sales | 1.35% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 104.04% | ||
| Profit Quality | 167.7% | ||
| Current Ratio | 2.94 | ||
| Quick Ratio | 1.61 | ||
| Altman-Z | 6.31 |
F-Score7
WACC9.82%
ROIC/WACC0.83
Cap/Depr(3y)154.91%
Cap/Depr(5y)127.01%
Cap/Sales(3y)3.42%
Cap/Sales(5y)2.95%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)53.85%
EPS 3Y-34.48%
EPS 5Y33.9%
EPS Q2Q%129.41%
EPS Next Y71.55%
EPS Next 2Y75.22%
EPS Next 3Y48.84%
EPS Next 5YN/A
Revenue 1Y (TTM)9.44%
Revenue growth 3Y-3.59%
Revenue growth 5Y3.04%
Sales Q2Q%23.4%
Revenue Next Year20.58%
Revenue Next 2Y15.18%
Revenue Next 3Y12.71%
Revenue Next 5YN/A
EBIT growth 1Y94.32%
EBIT growth 3Y-39.21%
EBIT growth 5Y29.05%
EBIT Next Year143.5%
EBIT Next 3Y56.2%
EBIT Next 5YN/A
FCF growth 1Y-18.02%
FCF growth 3Y-9.33%
FCF growth 5YN/A
OCF growth 1Y-35.68%
OCF growth 3Y-5.92%
OCF growth 5Y54.56%