MOHAWK INDUSTRIES INC (MHK) Stock Fundamental Analysis
NYSE:MHK - New York Stock Exchange, Inc. - US6081901042 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to MHK. MHK was compared to 63 industry peers in the Household Durables industry. While MHK seems to be doing ok healthwise, there are quite some concerns on its profitability. MHK has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year MHK was profitable.
MHK had a positive operating cash flow in the past year.
MHK had positive earnings in 4 of the past 5 years.
Each year in the past 5 years MHK had a positive operating cash flow.
1.2 Ratios
The Return On Assets of MHK (3.62%) is comparable to the rest of the industry.
With a Return On Equity value of 6.18%, MHK perfoms like the industry average, outperforming 42.86% of the companies in the same industry.
MHK's Return On Invested Capital of 5.87% is in line compared to the rest of the industry. MHK outperforms 46.03% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MHK is below the industry average of 10.49%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.62% | ||
| ROE | 6.18% | ||
| ROIC | 5.87% |
ROA(3y)0.33%
ROA(5y)2.37%
ROE(3y)0.47%
ROE(5y)3.94%
ROIC(3y)6.82%
ROIC(5y)7.05%
1.3 Margins
Looking at the Profit Margin, with a value of 4.54%, MHK is in line with its industry, outperforming 50.79% of the companies in the same industry.
In the last couple of years the Profit Margin of MHK has declined.
MHK has a Operating Margin of 7.15%. This is comparable to the rest of the industry: MHK outperforms 49.21% of its industry peers.
In the last couple of years the Operating Margin of MHK has declined.
With a Gross Margin value of 25.47%, MHK perfoms like the industry average, outperforming 44.44% of the companies in the same industry.
In the last couple of years the Gross Margin of MHK has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.15% | ||
| PM (TTM) | 4.54% | ||
| GM | 25.47% |
OM growth 3Y-15.02%
OM growth 5Y-4.36%
PM growth 3Y-19.69%
PM growth 5Y-8.53%
GM growth 3Y-4.53%
GM growth 5Y-1.63%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so MHK is destroying value.
The number of shares outstanding for MHK has been reduced compared to 1 year ago.
The number of shares outstanding for MHK has been reduced compared to 5 years ago.
The debt/assets ratio for MHK has been reduced compared to a year ago.
2.2 Solvency
MHK has an Altman-Z score of 2.78. This is not the best score and indicates that MHK is in the grey zone with still only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.78, MHK perfoms like the industry average, outperforming 50.79% of the companies in the same industry.
MHK has a debt to FCF ratio of 4.80. This is a neutral value as MHK would need 4.80 years to pay back of all of its debts.
MHK has a Debt to FCF ratio of 4.80. This is in the better half of the industry: MHK outperforms 63.49% of its industry peers.
MHK has a Debt/Equity ratio of 0.22. This is a healthy value indicating a solid balance between debt and equity.
MHK has a better Debt to Equity ratio (0.22) than 61.90% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.22 | ||
| Debt/FCF | 4.8 | ||
| Altman-Z | 2.78 |
ROIC/WACC0.73
WACC8.01%
2.3 Liquidity
MHK has a Current Ratio of 2.01. This indicates that MHK is financially healthy and has no problem in meeting its short term obligations.
MHK's Current ratio of 2.01 is on the low side compared to the rest of the industry. MHK is outperformed by 60.32% of its industry peers.
MHK has a Quick Ratio of 1.13. This is a normal value and indicates that MHK is financially healthy and should not expect problems in meeting its short term obligations.
MHK's Quick ratio of 1.13 is fine compared to the rest of the industry. MHK outperforms 63.49% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.01 | ||
| Quick Ratio | 1.13 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 0.75% over the past year.
Measured over the past years, MHK shows a decrease in Earnings Per Share. The EPS has been decreasing by -0.63% on average per year.
MHK shows a decrease in Revenue. In the last year, the revenue decreased by -2.95%.
The Revenue has been growing slightly by 1.68% on average over the past years.
EPS 1Y (TTM)0.75%
EPS 3Y-13.18%
EPS 5Y-0.63%
EPS Q2Q%-18.28%
Revenue 1Y (TTM)-2.95%
Revenue growth 3Y-1.1%
Revenue growth 5Y1.68%
Sales Q2Q%-5.73%
3.2 Future
MHK is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.35% yearly.
MHK is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.35% yearly.
EPS Next Y-5.14%
EPS Next 2Y5.5%
EPS Next 3Y8.21%
EPS Next 5Y10.35%
Revenue Next Year-0.47%
Revenue Next 2Y1.26%
Revenue Next 3Y1.83%
Revenue Next 5Y2.35%
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.
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 11.97, which indicates a very decent valuation of MHK.
The rest of the industry has a similar Price/Earnings ratio as MHK.
MHK is valuated cheaply when we compare the Price/Earnings ratio to 27.41, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 10.38 indicates a reasonable valuation of MHK.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MHK indicates a somewhat cheap valuation: MHK is cheaper than 60.32% of the companies listed in the same industry.
MHK is valuated cheaply when we compare the Price/Forward Earnings ratio to 35.19, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.97 | ||
| Fwd PE | 10.38 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MHK is valued a bit cheaper than 77.78% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, MHK is valued cheaply inside the industry as 80.95% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.11 | ||
| EV/EBITDA | 6.23 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y5.5%
EPS Next 3Y8.21%
5. Dividend
5.1 Amount
MHK does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
112.18
-0.35 (-0.31%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryHousehold Durables
Earnings (Last)
Earnings (Next)
Inst Owners83.17%
Inst Owner Change0%
Ins Owners3.58%
Ins Owner Change7.26%
Market Cap7.01B
Analysts75.65
Price Target128.48 (14.53%)
Short Float %3.91%
Short Ratio2.56
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.55%
Min EPS beat(2)4.23%
Max EPS beat(2)6.88%
EPS beat(4)3
Avg EPS beat(4)4.6%
Min EPS beat(4)-0.6%
Max EPS beat(4)7.91%
EPS beat(8)7
Avg EPS beat(8)4.69%
EPS beat(12)9
Avg EPS beat(12)5.89%
EPS beat(16)13
Avg EPS beat(16)7.75%
Revenue beat(2)1
Avg Revenue beat(2)0.32%
Min Revenue beat(2)-2.29%
Max Revenue beat(2)2.94%
Revenue beat(4)1
Avg Revenue beat(4)-0.42%
Min Revenue beat(4)-2.29%
Max Revenue beat(4)2.94%
Revenue beat(8)3
Avg Revenue beat(8)-0.19%
Revenue beat(12)4
Avg Revenue beat(12)-0.72%
Revenue beat(16)7
Avg Revenue beat(16)-0.03%
PT rev (1m)0%
PT rev (3m)-12.05%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-7.55%
EPS NY rev (1m)-0.41%
EPS NY rev (3m)-5.01%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.5%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)-0.62%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.97 | ||
| Fwd PE | 10.38 | ||
| P/S | 0.66 | ||
| P/FCF | 14.11 | ||
| P/OCF | 7.35 | ||
| P/B | 0.89 | ||
| P/tB | 1.19 | ||
| EV/EBITDA | 6.23 |
EPS(TTM)9.37
EY8.35%
EPS(NY)10.81
Fwd EY9.63%
FCF(TTM)7.95
FCFY7.09%
OCF(TTM)15.26
OCFY13.6%
SpS170.88
BVpS125.66
TBVpS94.47
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.62% | ||
| ROE | 6.18% | ||
| ROCE | 7.32% | ||
| ROIC | 5.87% | ||
| ROICexc | 6.29% | ||
| ROICexgc | 7.87% | ||
| OM | 7.15% | ||
| PM (TTM) | 4.54% | ||
| GM | 25.47% | ||
| FCFM | 4.65% |
ROA(3y)0.33%
ROA(5y)2.37%
ROE(3y)0.47%
ROE(5y)3.94%
ROIC(3y)6.82%
ROIC(5y)7.05%
ROICexc(3y)7.28%
ROICexc(5y)7.56%
ROICexgc(3y)9.46%
ROICexgc(5y)10.45%
ROCE(3y)8.51%
ROCE(5y)8.8%
ROICexcg growth 3Y-17.3%
ROICexcg growth 5Y-4.07%
ROICexc growth 3Y-12.4%
ROICexc growth 5Y-0.59%
OM growth 3Y-15.02%
OM growth 5Y-4.36%
PM growth 3Y-19.69%
PM growth 5Y-8.53%
GM growth 3Y-4.53%
GM growth 5Y-1.63%
F-Score6
Asset Turnover0.8
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.22 | ||
| Debt/FCF | 4.8 | ||
| Debt/EBITDA | 1.21 | ||
| Cap/Depr | 71.98% | ||
| Cap/Sales | 4.27% | ||
| Interest Coverage | 13.08 | ||
| Cash Conversion | 68.21% | ||
| Profit Quality | 102.47% | ||
| Current Ratio | 2.01 | ||
| Quick Ratio | 1.13 | ||
| Altman-Z | 2.78 |
F-Score6
WACC8.01%
ROIC/WACC0.73
Cap/Depr(3y)88.65%
Cap/Depr(5y)90.05%
Cap/Sales(3y)4.88%
Cap/Sales(5y)5.03%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)0.75%
EPS 3Y-13.18%
EPS 5Y-0.63%
EPS Q2Q%-18.28%
EPS Next Y-5.14%
EPS Next 2Y5.5%
EPS Next 3Y8.21%
EPS Next 5Y10.35%
Revenue 1Y (TTM)-2.95%
Revenue growth 3Y-1.1%
Revenue growth 5Y1.68%
Sales Q2Q%-5.73%
Revenue Next Year-0.47%
Revenue Next 2Y1.26%
Revenue Next 3Y1.83%
Revenue Next 5Y2.35%
EBIT growth 1Y6.37%
EBIT growth 3Y-15.95%
EBIT growth 5Y-2.76%
EBIT Next Year64.49%
EBIT Next 3Y23.72%
EBIT Next 5Y17.9%
FCF growth 1Y70.39%
FCF growth 3Y2.39%
FCF growth 5Y-4.89%
OCF growth 1Y9.45%
OCF growth 3Y-4.68%
OCF growth 5Y-4.38%