ALAMO GROUP INC (ALG) Stock Fundamental Analysis
NYSE:ALG - New York Stock Exchange, Inc. - US0113111076 - Common Stock - Currency: USD
Overall ALG gets a fundamental rating of 6 out of 10. We evaluated ALG against 128 industry peers in the Machinery industry. While ALG has a great health rating, its profitability is only average at the moment. ALG is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
ALG had positive earnings in the past year.
In the past year ALG had a positive cash flow from operations.
Each year in the past 5 years ALG has been profitable.
Each year in the past 5 years ALG had a positive operating cash flow.
1.2 Ratios
ALG has a better Return On Assets (7.68%) than 68.75% of its industry peers.
ALG's Return On Equity of 10.94% is in line compared to the rest of the industry. ALG outperforms 57.81% of its industry peers.
ALG has a better Return On Invested Capital (9.74%) than 67.19% of its industry peers.
ALG had an Average Return On Invested Capital over the past 3 years of 11.11%. This is in line with the industry average of 10.71%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.68% | ||
| ROE | 10.94% | ||
| ROIC | 9.74% |
ROA(3y)8.48%
ROA(5y)7.45%
ROE(3y)12.99%
ROE(5y)11.88%
ROIC(3y)11.11%
ROIC(5y)9.98%
1.3 Margins
Looking at the Profit Margin, with a value of 7.25%, ALG is in the better half of the industry, outperforming 60.16% of the companies in the same industry.
ALG's Profit Margin has improved in the last couple of years.
ALG has a Operating Margin of 10.18%. This is comparable to the rest of the industry: ALG outperforms 53.91% of its industry peers.
In the last couple of years the Operating Margin of ALG has grown nicely.
ALG's Gross Margin of 25.33% is on the low side compared to the rest of the industry. ALG is outperformed by 64.06% of its industry peers.
In the last couple of years the Gross Margin of ALG has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.18% | ||
| PM (TTM) | 7.25% | ||
| GM | 25.33% |
OM growth 3Y4.92%
OM growth 5Y3.6%
PM growth 3Y5.8%
PM growth 5Y4.77%
GM growth 3Y0.34%
GM growth 5Y0.72%
2. Health
2.1 Basic Checks
ALG has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, ALG has more shares outstanding
The number of shares outstanding for ALG has been increased compared to 5 years ago.
ALG has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 6.55 indicates that ALG is not in any danger for bankruptcy at the moment.
ALG has a better Altman-Z score (6.55) than 84.38% of its industry peers.
ALG has a debt to FCF ratio of 1.09. This is a very positive value and a sign of high solvency as it would only need 1.09 years to pay back of all of its debts.
ALG has a Debt to FCF ratio of 1.09. This is amongst the best in the industry. ALG outperforms 83.59% of its industry peers.
ALG has a Debt/Equity ratio of 0.19. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of ALG (0.19) is better than 71.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.19 | ||
| Debt/FCF | 1.09 | ||
| Altman-Z | 6.55 |
ROIC/WACC0.97
WACC10%
2.3 Liquidity
A Current Ratio of 4.30 indicates that ALG has no problem at all paying its short term obligations.
ALG has a Current ratio of 4.30. This is amongst the best in the industry. ALG outperforms 89.84% of its industry peers.
ALG has a Quick Ratio of 2.62. This indicates that ALG is financially healthy and has no problem in meeting its short term obligations.
ALG has a Quick ratio of 2.62. This is amongst the best in the industry. ALG outperforms 85.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.3 | ||
| Quick Ratio | 2.62 |
3. Growth
3.1 Past
The earnings per share for ALG have decreased strongly by -14.59% in the last year.
Measured over the past years, ALG shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.26% on average per year.
Looking at the last year, ALG shows a decrease in Revenue. The Revenue has decreased by -6.43% in the last year.
The Revenue has been growing slightly by 7.79% on average over the past years.
EPS 1Y (TTM)-14.59%
EPS 3Y13.14%
EPS 5Y10.26%
EPS Q2Q%-1.12%
Revenue 1Y (TTM)-6.43%
Revenue growth 3Y6.87%
Revenue growth 5Y7.79%
Sales Q2Q%-8.14%
3.2 Future
ALG is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.28% yearly.
The Revenue is expected to grow by 1.88% on average over the next years.
EPS Next Y12.93%
EPS Next 2Y12.28%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year-1.15%
Revenue Next 2Y1.88%
Revenue Next 3YN/A
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 stable.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 23.56, the valuation of ALG can be described as rather expensive.
ALG's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 27.45, ALG is valued at the same level.
ALG is valuated rather expensively with a Price/Forward Earnings ratio of 18.63.
ALG's Price/Forward Earnings ratio is in line with the industry average.
ALG's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.90.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.56 | ||
| Fwd PE | 18.63 |
4.2 Price Multiples
63.28% of the companies in the same industry are more expensive than ALG, based on the Enterprise Value to EBITDA ratio.
82.81% of the companies in the same industry are more expensive than ALG, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.79 | ||
| EV/EBITDA | 12.75 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
ALG has a very decent profitability rating, which may justify a higher PE ratio.
ALG's earnings are expected to grow with 12.28% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.82
PEG (5Y)2.3
EPS Next 2Y12.28%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a yearly dividend of 0.53%, ALG is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.83, ALG has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.38, ALG's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.53% |
5.2 History
The dividend of ALG is nicely growing with an annual growth rate of 16.84%!
ALG has been paying a dividend for at least 10 years, so it has a reliable track record.
ALG has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)16.84%
Div Incr Years10
Div Non Decr Years24
5.3 Sustainability
ALG pays out 11.19% of its income as dividend. This is a sustainable payout ratio.
The dividend of ALG is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP11.19%
EPS Next 2Y12.28%
EPS Next 3YN/A
226.21
+0.73 (+0.32%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners86.82%
Inst Owner Change4.07%
Ins Owners1.13%
Ins Owner Change2.09%
Market Cap2.73B
Analysts80
Price Target221.85 (-1.93%)
Short Float %3.68%
Short Ratio3.69
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.53% |
Yearly Dividend1.04
Dividend Growth(5Y)16.84%
DP11.19%
Div Incr Years10
Div Non Decr Years24
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.89%
Min EPS beat(2)2.42%
Max EPS beat(2)15.36%
EPS beat(4)2
Avg EPS beat(4)-1%
Min EPS beat(4)-14.4%
Max EPS beat(4)15.36%
EPS beat(8)4
Avg EPS beat(8)0.6%
EPS beat(12)7
Avg EPS beat(12)5.53%
EPS beat(16)9
Avg EPS beat(16)3.78%
Revenue beat(2)0
Avg Revenue beat(2)-2.44%
Min Revenue beat(2)-3.87%
Max Revenue beat(2)-1.02%
Revenue beat(4)0
Avg Revenue beat(4)-2.61%
Min Revenue beat(4)-3.87%
Max Revenue beat(4)-1.02%
Revenue beat(8)3
Avg Revenue beat(8)-0.6%
Revenue beat(12)6
Avg Revenue beat(12)0.3%
Revenue beat(16)9
Avg Revenue beat(16)1.15%
PT rev (1m)6.88%
PT rev (3m)6.88%
EPS NQ rev (1m)0%
EPS NQ rev (3m)10.66%
EPS NY rev (1m)0%
EPS NY rev (3m)8.81%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.34%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.56 | ||
| Fwd PE | 18.63 | ||
| P/S | 1.72 | ||
| P/FCF | 13.79 | ||
| P/OCF | 12.27 | ||
| P/B | 2.59 | ||
| P/tB | 3.88 | ||
| EV/EBITDA | 12.75 |
EPS(TTM)9.6
EY4.24%
EPS(NY)12.14
Fwd EY5.37%
FCF(TTM)16.4
FCFY7.25%
OCF(TTM)18.43
OCFY8.15%
SpS131.83
BVpS87.43
TBVpS58.28
PEG (NY)1.82
PEG (5Y)2.3
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.68% | ||
| ROE | 10.94% | ||
| ROCE | 12.55% | ||
| ROIC | 9.74% | ||
| ROICexc | 11.53% | ||
| ROICexgc | 17.02% | ||
| OM | 10.18% | ||
| PM (TTM) | 7.25% | ||
| GM | 25.33% | ||
| FCFM | 12.44% |
ROA(3y)8.48%
ROA(5y)7.45%
ROE(3y)12.99%
ROE(5y)11.88%
ROIC(3y)11.11%
ROIC(5y)9.98%
ROICexc(3y)12.08%
ROICexc(5y)10.73%
ROICexgc(3y)18.15%
ROICexgc(5y)16.79%
ROCE(3y)14.31%
ROCE(5y)12.86%
ROICexcg growth 3Y5.21%
ROICexcg growth 5Y8.14%
ROICexc growth 3Y8.81%
ROICexc growth 5Y10.49%
OM growth 3Y4.92%
OM growth 5Y3.6%
PM growth 3Y5.8%
PM growth 5Y4.77%
GM growth 3Y0.34%
GM growth 5Y0.72%
F-Score6
Asset Turnover1.06
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.19 | ||
| Debt/FCF | 1.09 | ||
| Debt/EBITDA | 0.93 | ||
| Cap/Depr | 45.87% | ||
| Cap/Sales | 1.54% | ||
| Interest Coverage | 8.92 | ||
| Cash Conversion | 103.23% | ||
| Profit Quality | 171.5% | ||
| Current Ratio | 4.3 | ||
| Quick Ratio | 2.62 | ||
| Altman-Z | 6.55 |
F-Score6
WACC10%
ROIC/WACC0.97
Cap/Depr(3y)64.41%
Cap/Depr(5y)58.21%
Cap/Sales(3y)1.95%
Cap/Sales(5y)1.86%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-14.59%
EPS 3Y13.14%
EPS 5Y10.26%
EPS Q2Q%-1.12%
EPS Next Y12.93%
EPS Next 2Y12.28%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-6.43%
Revenue growth 3Y6.87%
Revenue growth 5Y7.79%
Sales Q2Q%-8.14%
Revenue Next Year-1.15%
Revenue Next 2Y1.88%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-17.19%
EBIT growth 3Y12.13%
EBIT growth 5Y11.67%
EBIT Next Year38.46%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y469.75%
FCF growth 3Y96.3%
FCF growth 5Y26.31%
OCF growth 1Y215.21%
OCF growth 3Y61.61%
OCF growth 5Y18.76%