KENNAMETAL INC (KMT) Stock Fundamental Analysis
NYSE:KMT - New York Stock Exchange, Inc. - US4891701009 - Common Stock - Currency: USD
Taking everything into account, KMT scores 5 out of 10 in our fundamental rating. KMT was compared to 128 industry peers in the Machinery industry. While KMT seems to be doing ok healthwise, there are quite some concerns on its profitability. KMT is valued correctly, but it does not seem to be growing. KMT also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
KMT had positive earnings in the past year.
In the past year KMT had a positive cash flow from operations.
KMT had positive earnings in 4 of the past 5 years.
Each year in the past 5 years KMT had a positive operating cash flow.
1.2 Ratios
With a Return On Assets value of 3.95%, KMT perfoms like the industry average, outperforming 49.22% of the companies in the same industry.
With a Return On Equity value of 7.89%, KMT perfoms like the industry average, outperforming 46.09% of the companies in the same industry.
KMT has a Return On Invested Capital of 6.61%. This is comparable to the rest of the industry: KMT outperforms 46.88% of its industry peers.
The Average Return On Invested Capital over the past 3 years for KMT is below the industry average of 10.65%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.95% | ||
| ROE | 7.89% | ||
| ROIC | 6.61% |
ROA(3y)4.88%
ROA(5y)3.3%
ROE(3y)9.86%
ROE(5y)6.64%
ROIC(3y)7.41%
ROIC(5y)6.27%
1.3 Margins
KMT has a Profit Margin of 4.76%. This is comparable to the rest of the industry: KMT outperforms 48.44% of its industry peers.
KMT's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 8.62%, KMT is in line with its industry, outperforming 49.22% of the companies in the same industry.
In the last couple of years the Operating Margin of KMT has declined.
With a Gross Margin value of 30.68%, KMT perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
In the last couple of years the Gross Margin of KMT has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.62% | ||
| PM (TTM) | 4.76% | ||
| GM | 30.68% |
OM growth 3Y4.91%
OM growth 5Y-9.21%
PM growth 3Y21.82%
PM growth 5Y-12.11%
GM growth 3Y0.05%
GM growth 5Y-2.63%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so KMT is destroying value.
Compared to 1 year ago, KMT has less shares outstanding
Compared to 5 years ago, KMT has less shares outstanding
Compared to 1 year ago, KMT has a worse debt to assets ratio.
2.2 Solvency
KMT has an Altman-Z score of 2.80. This is not the best score and indicates that KMT is in the grey zone with still only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.80, KMT perfoms like the industry average, outperforming 46.88% of the companies in the same industry.
KMT has a debt to FCF ratio of 3.06. This is a good value and a sign of high solvency as KMT would need 3.06 years to pay back of all of its debts.
KMT's Debt to FCF ratio of 3.06 is fine compared to the rest of the industry. KMT outperforms 64.06% of its industry peers.
A Debt/Equity ratio of 0.49 indicates that KMT is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.49, KMT perfoms like the industry average, outperforming 48.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 3.06 | ||
| Altman-Z | 2.8 |
ROIC/WACC0.7
WACC9.49%
2.3 Liquidity
KMT has a Current Ratio of 2.53. This indicates that KMT is financially healthy and has no problem in meeting its short term obligations.
KMT has a Current ratio of 2.53. This is in the better half of the industry: KMT outperforms 65.63% of its industry peers.
KMT has a Quick Ratio of 1.13. This is a normal value and indicates that KMT is financially healthy and should not expect problems in meeting its short term obligations.
KMT has a Quick ratio (1.13) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.53 | ||
| Quick Ratio | 1.13 |
3. Growth
3.1 Past
KMT shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -14.19%.
The earnings per share for KMT have been decreasing by -13.06% on average. This is quite bad
KMT shows a decrease in Revenue. In the last year, the revenue decreased by -2.46%.
KMT shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -2.93% yearly.
EPS 1Y (TTM)-14.19%
EPS 3Y12.98%
EPS 5Y-13.06%
EPS Q2Q%-16.67%
Revenue 1Y (TTM)-2.46%
Revenue growth 3Y3.59%
Revenue growth 5Y-2.93%
Sales Q2Q%-2.68%
3.2 Future
The Earnings Per Share is expected to grow by 2.19% on average over the next years.
Based on estimates for the next years, KMT will show a small growth in Revenue. The Revenue will grow by 0.40% on average per year.
EPS Next Y-22.86%
EPS Next 2Y-5.7%
EPS Next 3Y2.19%
EPS Next 5YN/A
Revenue Next Year-3.16%
Revenue Next 2Y-0.78%
Revenue Next 3Y0.4%
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
With a Price/Earnings ratio of 15.01, KMT is valued correctly.
74.22% of the companies in the same industry are more expensive than KMT, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 28.10. KMT is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 14.96, KMT is valued correctly.
Based on the Price/Forward Earnings ratio, KMT is valued a bit cheaper than 69.53% of the companies in the same industry.
KMT is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 20.74, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.01 | ||
| Fwd PE | 14.96 |
4.2 Price Multiples
86.72% of the companies in the same industry are more expensive than KMT, based on the Enterprise Value to EBITDA ratio.
92.97% of the companies in the same industry are more expensive than KMT, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.89 | ||
| EV/EBITDA | 6.55 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-5.7%
EPS Next 3Y2.19%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.10%, KMT is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.02, KMT pays a better dividend. On top of this KMT pays more dividend than 93.75% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.43, KMT pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.1% |
5.2 History
The dividend of KMT has a limited annual growth rate of 0.08%.
KMT has been paying a dividend for at least 10 years, so it has a reliable track record.
KMT has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)0.08%
Div Incr Years0
Div Non Decr Years34
5.3 Sustainability
KMT pays out 65.21% of its income as dividend. This is not a sustainable payout ratio.
KMT's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP65.21%
EPS Next 2Y-5.7%
EPS Next 3Y2.19%
19.96
-0.16 (-0.8%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners113.97%
Inst Owner Change-0.93%
Ins Owners0.69%
Ins Owner Change-2.01%
Market Cap1.54B
Analysts47.5
Price Target21.49 (7.67%)
Short Float %5.26%
Short Ratio3.78
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.1% |
Yearly Dividend0.8
Dividend Growth(5Y)0.08%
DP65.21%
Div Incr Years0
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)4.06%
Min EPS beat(2)-4.1%
Max EPS beat(2)12.21%
EPS beat(4)2
Avg EPS beat(4)4.67%
Min EPS beat(4)-4.1%
Max EPS beat(4)12.21%
EPS beat(8)5
Avg EPS beat(8)4.94%
EPS beat(12)8
Avg EPS beat(12)6.15%
EPS beat(16)11
Avg EPS beat(16)10.48%
Revenue beat(2)0
Avg Revenue beat(2)-1.8%
Min Revenue beat(2)-2.18%
Max Revenue beat(2)-1.42%
Revenue beat(4)1
Avg Revenue beat(4)-1%
Min Revenue beat(4)-2.18%
Max Revenue beat(4)1.11%
Revenue beat(8)2
Avg Revenue beat(8)-1.58%
Revenue beat(12)5
Avg Revenue beat(12)-0.89%
Revenue beat(16)6
Avg Revenue beat(16)-0.9%
PT rev (1m)-8.39%
PT rev (3m)-20.7%
EPS NQ rev (1m)-3.68%
EPS NQ rev (3m)-37.88%
EPS NY rev (1m)-1.9%
EPS NY rev (3m)-20.29%
Revenue NQ rev (1m)0.14%
Revenue NQ rev (3m)-4.87%
Revenue NY rev (1m)-0.05%
Revenue NY rev (3m)-2.73%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.01 | ||
| Fwd PE | 14.96 | ||
| P/S | 0.76 | ||
| P/FCF | 7.89 | ||
| P/OCF | 5.33 | ||
| P/B | 1.27 | ||
| P/tB | 1.76 | ||
| EV/EBITDA | 6.55 |
EPS(TTM)1.33
EY6.66%
EPS(NY)1.33
Fwd EY6.68%
FCF(TTM)2.53
FCFY12.67%
OCF(TTM)3.74
OCFY18.76%
SpS26.15
BVpS15.77
TBVpS11.32
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.95% | ||
| ROE | 7.89% | ||
| ROCE | 8.49% | ||
| ROIC | 6.61% | ||
| ROICexc | 7.03% | ||
| ROICexgc | 8.55% | ||
| OM | 8.62% | ||
| PM (TTM) | 4.76% | ||
| GM | 30.68% | ||
| FCFM | 9.67% |
ROA(3y)4.88%
ROA(5y)3.3%
ROE(3y)9.86%
ROE(5y)6.64%
ROIC(3y)7.41%
ROIC(5y)6.27%
ROICexc(3y)7.8%
ROICexc(5y)6.83%
ROICexgc(3y)9.53%
ROICexgc(5y)8.39%
ROCE(3y)9.55%
ROCE(5y)8.32%
ROICexcg growth 3Y10.38%
ROICexcg growth 5Y-12.5%
ROICexc growth 3Y10.87%
ROICexc growth 5Y-11.41%
OM growth 3Y4.91%
OM growth 5Y-9.21%
PM growth 3Y21.82%
PM growth 5Y-12.11%
GM growth 3Y0.05%
GM growth 5Y-2.63%
F-Score6
Asset Turnover0.83
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 3.06 | ||
| Debt/EBITDA | 1.93 | ||
| Cap/Depr | 69.16% | ||
| Cap/Sales | 4.65% | ||
| Interest Coverage | 6.85 | ||
| Cash Conversion | 93.37% | ||
| Profit Quality | 203.37% | ||
| Current Ratio | 2.53 | ||
| Quick Ratio | 1.13 | ||
| Altman-Z | 2.8 |
F-Score6
WACC9.49%
ROIC/WACC0.7
Cap/Depr(3y)74.63%
Cap/Depr(5y)105.67%
Cap/Sales(3y)4.87%
Cap/Sales(5y)6.9%
Profit Quality(3y)117.17%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-14.19%
EPS 3Y12.98%
EPS 5Y-13.06%
EPS Q2Q%-16.67%
EPS Next Y-22.86%
EPS Next 2Y-5.7%
EPS Next 3Y2.19%
EPS Next 5YN/A
Revenue 1Y (TTM)-2.46%
Revenue growth 3Y3.59%
Revenue growth 5Y-2.93%
Sales Q2Q%-2.68%
Revenue Next Year-3.16%
Revenue Next 2Y-0.78%
Revenue Next 3Y0.4%
Revenue Next 5YN/A
EBIT growth 1Y-9.51%
EBIT growth 3Y8.67%
EBIT growth 5Y-11.87%
EBIT Next Year62.05%
EBIT Next 3Y23.13%
EBIT Next 5YN/A
FCF growth 1Y195.11%
FCF growth 3Y16.08%
FCF growth 5Y13.96%
OCF growth 1Y64.51%
OCF growth 3Y5.54%
OCF growth 5Y-1.61%