KENNAMETAL INC (KMT) Stock Fundamental Analysis
NYSE:KMT - New York Stock Exchange, Inc. - US4891701009 - Common Stock - Currency: USD
Overall KMT gets a fundamental rating of 4 out of 10. We evaluated KMT against 128 industry peers in the Machinery industry. The financial health of KMT is average, but there are quite some concerns on its profitability. KMT is valued correctly, but it does not seem to be growing. Finally 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
KMT has a Return On Assets (4.37%) which is comparable to the rest of the industry.
KMT's Return On Equity of 8.79% is in line compared to the rest of the industry. KMT outperforms 50.78% of its industry peers.
The Return On Invested Capital of KMT (6.81%) is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for KMT is below the industry average of 10.72%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.37% | ||
| ROE | 8.79% | ||
| ROIC | 6.81% |
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 5.45%. This is comparable to the rest of the industry: KMT outperforms 52.34% of its industry peers.
In the last couple of years the Profit Margin of KMT has declined.
With a Operating Margin value of 9.14%, KMT perfoms like the industry average, outperforming 50.78% of the companies in the same industry.
KMT's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 31.29%, KMT is in line with its industry, outperforming 51.56% of the companies in the same industry.
KMT's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.14% | ||
| PM (TTM) | 5.45% | ||
| GM | 31.29% |
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
KMT has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
KMT has less shares outstanding than it did 1 year ago.
The number of shares outstanding for KMT has been reduced compared to 5 years ago.
Compared to 1 year ago, KMT has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.83 indicates that KMT is not a great score, but indicates only limited risk for bankruptcy at the moment.
KMT has a Altman-Z score of 2.83. This is comparable to the rest of the industry: KMT outperforms 44.53% of its industry peers.
The Debt to FCF ratio of KMT is 3.99, which is a good value as it means it would take KMT, 3.99 years of fcf income to pay off all of its debts.
KMT has a Debt to FCF ratio (3.99) which is in line with its industry peers.
A Debt/Equity ratio of 0.49 indicates that KMT is not too dependend on debt financing.
KMT's Debt to Equity ratio of 0.49 is in line compared to the rest of the industry. KMT outperforms 45.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 3.99 | ||
| Altman-Z | 2.83 |
ROIC/WACC0.71
WACC9.57%
2.3 Liquidity
A Current Ratio of 2.44 indicates that KMT has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.44, KMT is in the better half of the industry, outperforming 63.28% of the companies in the same industry.
A Quick Ratio of 1.10 indicates that KMT should not have too much problems paying its short term obligations.
The Quick ratio of KMT (1.10) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.44 | ||
| Quick Ratio | 1.1 |
3. Growth
3.1 Past
KMT shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.74%.
The earnings per share for KMT have been decreasing by -13.06% on average. This is quite bad
Looking at the last year, KMT shows a decrease in Revenue. The Revenue has decreased by -2.93% in the last year.
The Revenue has been decreasing by -2.93% on average over the past years.
EPS 1Y (TTM)2.74%
EPS 3Y12.98%
EPS 5Y-13.06%
EPS Q2Q%56.67%
Revenue 1Y (TTM)-2.93%
Revenue growth 3Y3.59%
Revenue growth 5Y-2.93%
Sales Q2Q%-5.7%
3.2 Future
The Earnings Per Share is expected to grow by 6.35% on average over the next years.
The Revenue is expected to grow by 1.67% on average over the next years.
EPS Next Y-6.44%
EPS Next 2Y-2.96%
EPS Next 3Y2.9%
EPS Next 5Y6.35%
Revenue Next Year-2.97%
Revenue Next 2Y-0.61%
Revenue Next 3Y0.53%
Revenue Next 5Y1.67%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
The Price/Earnings ratio is 15.15, which indicates a correct valuation of KMT.
KMT's Price/Earnings ratio is a bit cheaper when compared to the industry. KMT is cheaper than 78.13% of the companies in the same industry.
KMT's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.69.
KMT is valuated correctly with a Price/Forward Earnings ratio of 16.09.
Compared to the rest of the industry, the Price/Forward Earnings ratio of KMT indicates a somewhat cheap valuation: KMT is cheaper than 65.63% of the companies listed in the same industry.
KMT's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.15 | ||
| Fwd PE | 16.09 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, KMT is valued cheaply inside the industry as 89.84% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, KMT is valued cheaper than 91.41% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.36 | ||
| EV/EBITDA | 7 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-2.96%
EPS Next 3Y2.9%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.64%, KMT has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.94, KMT pays a better dividend. On top of this KMT pays more dividend than 92.19% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.43, KMT pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.64% |
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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)0.08%
Div Incr Years0
Div Non Decr Years34
5.3 Sustainability
KMT pays out 57.34% of its income as dividend. This is a bit on the high side, but may be sustainable.
KMT's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP57.34%
EPS Next 2Y-2.96%
EPS Next 3Y2.9%
22.73
+0.7 (+3.18%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners108.02%
Inst Owner Change-6.92%
Ins Owners0.69%
Ins Owner Change1.98%
Market Cap1.73B
Analysts47.5
Price Target22.08 (-2.86%)
Short Float %5.14%
Short Ratio3.89
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.64% |
Yearly Dividend0.8
Dividend Growth(5Y)0.08%
DP57.34%
Div Incr Years0
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)45.67%
Min EPS beat(2)-4.1%
Max EPS beat(2)95.43%
EPS beat(4)3
Avg EPS beat(4)28.78%
Min EPS beat(4)-4.1%
Max EPS beat(4)95.43%
EPS beat(8)5
Avg EPS beat(8)15.13%
EPS beat(12)8
Avg EPS beat(12)13.31%
EPS beat(16)11
Avg EPS beat(16)12.87%
Revenue beat(2)0
Avg Revenue beat(2)-1.99%
Min Revenue beat(2)-2.18%
Max Revenue beat(2)-1.8%
Revenue beat(4)1
Avg Revenue beat(4)-1.07%
Min Revenue beat(4)-2.18%
Max Revenue beat(4)1.11%
Revenue beat(8)1
Avg Revenue beat(8)-1.83%
Revenue beat(12)5
Avg Revenue beat(12)-0.98%
Revenue beat(16)5
Avg Revenue beat(16)-1.11%
PT rev (1m)2.71%
PT rev (3m)-7.05%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.85%
EPS NY rev (1m)0%
EPS NY rev (3m)18.98%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.46%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.25%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.15 | ||
| Fwd PE | 16.09 | ||
| P/S | 0.87 | ||
| P/FCF | 11.36 | ||
| P/OCF | 7.12 | ||
| P/B | 1.4 | ||
| P/tB | 1.95 | ||
| EV/EBITDA | 7 |
EPS(TTM)1.5
EY6.6%
EPS(NY)1.41
Fwd EY6.21%
FCF(TTM)2
FCFY8.8%
OCF(TTM)3.19
OCFY14.05%
SpS26.15
BVpS16.23
TBVpS11.68
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.37% | ||
| ROE | 8.79% | ||
| ROCE | 8.78% | ||
| ROIC | 6.81% | ||
| ROICexc | 7.14% | ||
| ROICexgc | 8.64% | ||
| OM | 9.14% | ||
| PM (TTM) | 5.45% | ||
| GM | 31.29% | ||
| FCFM | 7.65% |
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-Score7
Asset Turnover0.8
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 3.99 | ||
| Debt/EBITDA | 1.91 | ||
| Cap/Depr | 66.6% | ||
| Cap/Sales | 4.56% | ||
| Interest Coverage | 7.34 | ||
| Cash Conversion | 76.38% | ||
| Profit Quality | 140.32% | ||
| Current Ratio | 2.44 | ||
| Quick Ratio | 1.1 | ||
| Altman-Z | 2.83 |
F-Score7
WACC9.57%
ROIC/WACC0.71
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)2.74%
EPS 3Y12.98%
EPS 5Y-13.06%
EPS Q2Q%56.67%
EPS Next Y-6.44%
EPS Next 2Y-2.96%
EPS Next 3Y2.9%
EPS Next 5Y6.35%
Revenue 1Y (TTM)-2.93%
Revenue growth 3Y3.59%
Revenue growth 5Y-2.93%
Sales Q2Q%-5.7%
Revenue Next Year-2.97%
Revenue Next 2Y-0.61%
Revenue Next 3Y0.53%
Revenue Next 5Y1.67%
EBIT growth 1Y0.19%
EBIT growth 3Y8.67%
EBIT growth 5Y-11.87%
EBIT Next Year71.18%
EBIT Next 3Y23.05%
EBIT Next 5YN/A
FCF growth 1Y42.84%
FCF growth 3Y16.08%
FCF growth 5Y13.96%
OCF growth 1Y13.41%
OCF growth 3Y5.54%
OCF growth 5Y-1.61%