INSTEEL INDUSTRIES INC (IIIN) Stock Fundamental Analysis
NYSE:IIIN - New York Stock Exchange, Inc. - US45774W1080 - Common Stock - Currency: USD
IIIN gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 42 industry peers in the Building Products industry. IIIN has an excellent financial health rating, but there are some minor concerns on its profitability. IIIN has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year IIIN was profitable.
IIIN had a positive operating cash flow in the past year.
IIIN had positive earnings in each of the past 5 years.
In the past 5 years IIIN always reported a positive cash flow from operatings.
1.2 Ratios
IIIN's Return On Assets of 5.34% is in line compared to the rest of the industry. IIIN outperforms 40.48% of its industry peers.
IIIN has a worse Return On Equity (6.60%) than 66.67% of its industry peers.
The Return On Invested Capital of IIIN (5.80%) is worse than 71.43% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for IIIN is in line with the industry average of 12.90%.
The last Return On Invested Capital (5.80%) 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 | 5.34% | ||
| ROE | 6.6% | ||
| ROIC | 5.8% |
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
The Profit Margin of IIIN (3.95%) is worse than 69.05% of its industry peers.
IIIN's Profit Margin has improved in the last couple of years.
IIIN has a worse Operating Margin (4.85%) than 76.19% of its industry peers.
IIIN's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 10.82%, IIIN is doing worse than 95.24% of the companies in the same industry.
IIIN's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.85% | ||
| PM (TTM) | 3.95% | ||
| GM | 10.82% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), IIIN is creating some value.
The number of shares outstanding for IIIN has been reduced compared to 1 year ago.
The number of shares outstanding for IIIN has been increased compared to 5 years ago.
IIIN has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
IIIN has an Altman-Z score of 7.91. This indicates that IIIN is financially healthy and has little risk of bankruptcy at the moment.
IIIN's Altman-Z score of 7.91 is amongst the best of the industry. IIIN outperforms 90.48% 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 | 7.91 |
ROIC/WACC0.58
WACC10.02%
2.3 Liquidity
IIIN has a Current Ratio of 3.87. This indicates that IIIN is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 3.87, IIIN belongs to the top of the industry, outperforming 85.71% of the companies in the same industry.
A Quick Ratio of 2.11 indicates that IIIN has no problem at all paying its short term obligations.
With an excellent Quick ratio value of 2.11, IIIN belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.87 | ||
| Quick Ratio | 2.11 |
3. Growth
3.1 Past
IIIN shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -6.45%.
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.
IIIN shows a decrease in Revenue. In the last year, the revenue decreased by -0.33%.
IIIN shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.04% yearly.
EPS 1Y (TTM)-6.45%
EPS 3Y-34.48%
EPS 5Y33.9%
EPS Q2Q%48.57%
Revenue 1Y (TTM)-0.33%
Revenue growth 3Y-3.59%
Revenue growth 5Y3.04%
Sales Q2Q%26.11%
3.2 Future
The Earnings Per Share is expected to grow by 75.22% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 11.85% on average over the next years. This is quite good.
EPS Next Y71.55%
EPS Next 2Y75.22%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year17.25%
Revenue Next 2Y11.85%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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 30.19, which means the current valuation is very expensive for IIIN.
Based on the Price/Earnings ratio, IIIN is valued a bit more expensive than the industry average as 71.43% of the companies are valued more cheaply.
IIIN's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.25.
Based on the Price/Forward Earnings ratio of 11.52, the valuation of IIIN can be described as reasonable.
IIIN's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. IIIN is cheaper than 73.81% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.15, IIIN is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.19 | ||
| Fwd PE | 11.52 |
4.2 Price Multiples
IIIN's Enterprise Value to EBITDA is on the same level as the industry average.
71.43% of the companies in the same industry are more expensive than IIIN, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.64 | ||
| EV/EBITDA | 14.78 |
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 75.22% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.42
PEG (5Y)0.89
EPS Next 2Y75.22%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a yearly dividend of 0.34%, IIIN is not a good candidate for dividend investing.
IIIN's Dividend Yield is comparable with the industry average which is at 1.20.
With a Dividend Yield of 0.34, IIIN pays less dividend than the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.34% |
5.2 History
On average, the dividend of IIIN grows each year by 85.37%, which is quite nice.
IIIN has paid a dividend for at least 10 years, which is a reliable track record.
IIIN has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)85.37%
Div Incr Years1
Div Non Decr Years18
5.3 Sustainability
96.53% 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.
DP96.53%
EPS Next 2Y75.22%
EPS Next 3YN/A
35.02
-0.35 (-0.99%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners85.69%
Inst Owner Change1.04%
Ins Owners4.69%
Ins Owner Change1.32%
Market Cap679.74M
Analysts43.33
Price Target39.78 (13.59%)
Short Float %3.33%
Short Ratio3.36
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.34% |
Yearly Dividend2.62
Dividend Growth(5Y)85.37%
DP96.53%
Div Incr Years1
Div Non Decr Years18
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)47.88%
Min EPS beat(2)6.95%
Max EPS beat(2)88.82%
EPS beat(4)2
Avg EPS beat(4)12.3%
Min EPS beat(4)-24.1%
Max EPS beat(4)88.82%
EPS beat(8)4
Avg EPS beat(8)0.73%
EPS beat(12)4
Avg EPS beat(12)-9.49%
EPS beat(16)8
Avg EPS beat(16)1.77%
Revenue beat(2)2
Avg Revenue beat(2)6.69%
Min Revenue beat(2)5.11%
Max Revenue beat(2)8.28%
Revenue beat(4)2
Avg Revenue beat(4)-0.64%
Min Revenue beat(4)-9.32%
Max Revenue beat(4)8.28%
Revenue beat(8)2
Avg Revenue beat(8)-5.22%
Revenue beat(12)2
Avg Revenue beat(12)-6.45%
Revenue beat(16)5
Avg Revenue beat(16)-3.34%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)20%
EPS NQ rev (3m)20%
EPS NY rev (1m)23.33%
EPS NY rev (3m)23.33%
Revenue NQ rev (1m)2.35%
Revenue NQ rev (3m)2.35%
Revenue NY rev (1m)0%
Revenue NY rev (3m)2.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.19 | ||
| Fwd PE | 11.52 | ||
| P/S | 1.19 | ||
| P/FCF | 16.64 | ||
| P/OCF | 13.42 | ||
| P/B | 1.99 | ||
| P/tB | 2.38 | ||
| EV/EBITDA | 14.78 |
EPS(TTM)1.16
EY3.31%
EPS(NY)3.04
Fwd EY8.68%
FCF(TTM)2.1
FCFY6.01%
OCF(TTM)2.61
OCFY7.45%
SpS29.39
BVpS17.59
TBVpS14.74
PEG (NY)0.42
PEG (5Y)0.89
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.34% | ||
| ROE | 6.6% | ||
| ROCE | 7.53% | ||
| ROIC | 5.8% | ||
| ROICexc | 6.29% | ||
| ROICexgc | 7.51% | ||
| OM | 4.85% | ||
| PM (TTM) | 3.95% | ||
| GM | 10.82% | ||
| FCFM | 7.16% |
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-Score6
Asset Turnover1.35
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 58.19% | ||
| Cap/Sales | 1.72% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 113.75% | ||
| Profit Quality | 181.17% | ||
| Current Ratio | 3.87 | ||
| Quick Ratio | 2.11 | ||
| Altman-Z | 7.91 |
F-Score6
WACC10.02%
ROIC/WACC0.58
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)-6.45%
EPS 3Y-34.48%
EPS 5Y33.9%
EPS Q2Q%48.57%
EPS Next Y71.55%
EPS Next 2Y75.22%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-0.33%
Revenue growth 3Y-3.59%
Revenue growth 5Y3.04%
Sales Q2Q%26.11%
Revenue Next Year17.25%
Revenue Next 2Y11.85%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y7.9%
EBIT growth 3Y-39.21%
EBIT growth 5Y29.05%
EBIT Next Year143.5%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-3.9%
FCF growth 3Y-9.33%
FCF growth 5YN/A
OCF growth 1Y-22.3%
OCF growth 3Y-5.92%
OCF growth 5Y54.56%