AZZ INC (AZZ)
US0024741045 - Common Stock
We assign a fundamental rating of 3 out of 10 to AZZ. AZZ was compared to 43 industry peers in the Building Products industry. Both the profitability and financial health of AZZ have multiple concerns. AZZ is valued expensive and it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year AZZ was profitable.
In the past year AZZ had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: AZZ reported negative net income in multiple years.
Of the past 5 years AZZ 4 years had a positive operating cash flow.
1.2 Ratios
AZZ's Return On Assets of 3.19% is on the low side compared to the rest of the industry. AZZ is outperformed by 72.09% of its industry peers.
AZZ has a worse Return On Equity (7.64%) than 65.12% of its industry peers.
AZZ has a Return On Invested Capital (8.03%) which is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for AZZ is below the industry average of 13.45%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.19% | ||
| ROE | 7.64% | ||
| ROIC | 8.03% |
ROA(3y)-1.39%
ROA(5y)1%
ROE(3y)-3.33%
ROE(5y)1.22%
ROIC(3y)9.34%
ROIC(5y)8.7%
1.3 Margins
AZZ's Profit Margin of 4.67% is on the low side compared to the rest of the industry. AZZ is outperformed by 72.09% of its industry peers.
Looking at the Operating Margin, with a value of 14.30%, AZZ is in line with its industry, outperforming 55.81% of the companies in the same industry.
In the last couple of years the Operating Margin of AZZ has grown nicely.
Looking at the Gross Margin, with a value of 22.80%, AZZ is doing worse than 69.77% of the companies in the same industry.
In the last couple of years the Gross Margin of AZZ has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.3% | ||
| PM (TTM) | 4.67% | ||
| GM | 22.8% |
OM growth 3Y15.25%
OM growth 5Y18.87%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y0.02%
GM growth 5Y2.48%
2. Health
2.1 Basic Checks
AZZ has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
There is no outstanding debt for AZZ. 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
AZZ has an Altman-Z score of 2.53. This is not the best score and indicates that AZZ is in the grey zone with still only limited risk for bankruptcy at the moment.
AZZ's Altman-Z score of 2.53 is on the low side compared to the rest of the industry. AZZ is outperformed by 69.77% of its industry peers.
AZZ has a debt to FCF ratio of 11.47. This is a negative value and a sign of low solvency as AZZ would need 11.47 years to pay back of all of its debts.
AZZ has a worse Debt to FCF ratio (11.47) than 83.72% of its industry peers.
AZZ has a Debt/Equity ratio of 1.07. This is a high value indicating a heavy dependency on external financing.
AZZ's Debt to Equity ratio of 1.07 is on the low side compared to the rest of the industry. AZZ is outperformed by 72.09% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.07 | ||
| Debt/FCF | 11.47 | ||
| Altman-Z | 2.53 |
ROIC/WACC0.66
WACC12.24%
2.3 Liquidity
AZZ has a Current Ratio of 1.96. This is a normal value and indicates that AZZ is financially healthy and should not expect problems in meeting its short term obligations.
AZZ has a Current ratio of 1.96. This is comparable to the rest of the industry: AZZ outperforms 41.86% of its industry peers.
A Quick Ratio of 1.33 indicates that AZZ should not have too much problems paying its short term obligations.
AZZ's Quick ratio of 1.33 is in line compared to the rest of the industry. AZZ outperforms 48.84% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.96 | ||
| Quick Ratio | 1.33 |
3. Growth
3.1 Past
AZZ shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 18.59%, which is quite good.
AZZ shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 18.24% yearly.
EPS 1Y (TTM)18.59%
EPS 3Y28.8%
EPS 5Y18.24%
EPS growth Q2Q210%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Revenue growth Q2Q8.92%
3.2 Future
The Earnings Per Share is expected to grow by 10.43% on average over the next years. This is quite good.
The Revenue is expected to grow by 5.66% on average over the next years.
EPS Next Y4.57%
EPS Next 2Y10.43%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year2.93%
Revenue Next 2Y5.66%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
AZZ is valuated correctly with a Price/Earnings ratio of 16.92.
AZZ's Price/Earnings ratio is a bit cheaper when compared to the industry. AZZ is cheaper than 65.12% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.15. AZZ is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 16.18, the valuation of AZZ can be described as correct.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AZZ indicates a somewhat cheap valuation: AZZ is cheaper than 60.47% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 20.20. AZZ is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.92 | ||
| Fwd PE | 16.18 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AZZ is valued a bit cheaper than 65.12% of the companies in the same industry.
65.12% of the companies in the same industry are cheaper than AZZ, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.58 | ||
| EV/EBITDA | 11.11 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PEG (NY)3.7
PEG (5Y)0.93
EPS Next 2Y10.43%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a yearly dividend of 0.88%, AZZ is not a good candidate for dividend investing.
AZZ's Dividend Yield is a higher than the industry average which is at 1.15.
With a Dividend Yield of 0.88, AZZ pays less dividend than the S&P500 average, which is at 2.33.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.88% |
5.2 History
The dividend of AZZ is nicely growing with an annual growth rate of 6.10%!
AZZ has been paying a dividend for at least 10 years, so it has a reliable track record.
AZZ has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)6.1%
Div Incr Years0
Div Non Decr Years13
5.3 Sustainability
AZZ pays out 47.66% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of AZZ is growing, but earnings are growing more, so the dividend growth is sustainable.
DP47.66%
EPS Next 2Y10.43%
EPS Next 3YN/A
AZZ INC
NYSE:AZZ (5/17/2024, 7:04:00 PM)
After market: 76.63 0 (0%)76.63
-0.27 (-0.35%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap2.28B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.88% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.92 | ||
| Fwd PE | 16.18 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)3.7
PEG (5Y)0.93
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.19% | ||
| ROE | 7.64% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 14.3% | ||
| PM (TTM) | 4.67% | ||
| GM | 22.8% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.68
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.07 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.96 | ||
| Quick Ratio | 1.33 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)18.59%
EPS 3Y28.8%
EPS 5Y
EPS growth Q2Q
EPS Next Y4.57%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y