ALAMO GROUP INC (ALG) Stock Fundamental Analysis
NYSE:ALG - New York Stock Exchange, Inc. - US0113111076 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to ALG. ALG was compared to 128 industry peers in the Machinery industry. ALG is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. ALG has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
ALG had positive earnings in the past year.
ALG had a positive operating cash flow in the past year.
ALG had positive earnings in each of the past 5 years.
ALG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.99%, ALG is in the better half of the industry, outperforming 71.88% of the companies in the same industry.
Looking at the Return On Equity, with a value of 11.39%, ALG is in line with its industry, outperforming 59.38% of the companies in the same industry.
The Return On Invested Capital of ALG (10.15%) is better than 67.97% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ALG is in line with the industry average of 10.69%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.99% | ||
| ROE | 11.39% | ||
| ROIC | 10.15% |
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
ALG's Profit Margin of 7.12% is fine compared to the rest of the industry. ALG outperforms 60.16% of its industry peers.
In the last couple of years the Profit Margin of ALG has grown nicely.
With a Operating Margin value of 10.12%, ALG perfoms like the industry average, outperforming 52.34% of the companies in the same industry.
ALG's Operating Margin has improved in the last couple of years.
ALG has a worse Gross Margin (25.33%) than 60.94% 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 | 10.12% | ||
| PM (TTM) | 7.12% | ||
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), ALG is creating some value.
The number of shares outstanding for ALG has been increased compared to 1 year ago.
Compared to 5 years ago, ALG has more shares outstanding
Compared to 1 year ago, ALG has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 5.80 indicates that ALG is not in any danger for bankruptcy at the moment.
ALG's Altman-Z score of 5.80 is amongst the best of the industry. ALG outperforms 83.59% of its industry peers.
The Debt to FCF ratio of ALG is 1.19, which is an excellent value as it means it would take ALG, only 1.19 years of fcf income to pay off all of its debts.
ALG has a better Debt to FCF ratio (1.19) than 83.59% of its industry peers.
ALG has a Debt/Equity ratio of 0.20. This is a healthy value indicating a solid balance between debt and equity.
With a decent Debt to Equity ratio value of 0.20, ALG is doing good in the industry, outperforming 69.53% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.2 | ||
| Debt/FCF | 1.19 | ||
| Altman-Z | 5.8 |
ROIC/WACC1
WACC10.14%
2.3 Liquidity
ALG has a Current Ratio of 4.51. This indicates that ALG is financially healthy and has no problem in meeting its short term obligations.
ALG has a better Current ratio (4.51) than 88.28% of its industry peers.
ALG has a Quick Ratio of 2.70. This indicates that ALG is financially healthy and has no problem in meeting its short term obligations.
The Quick ratio of ALG (2.70) is better than 85.94% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.51 | ||
| Quick Ratio | 2.7 |
3. Growth
3.1 Past
The earnings per share for ALG have decreased strongly by -15.23% in the last year.
ALG shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.26% yearly.
ALG shows a decrease in Revenue. In the last year, the revenue decreased by -3.62%.
Measured over the past years, ALG shows a small growth in Revenue. The Revenue has been growing by 7.79% on average per year.
EPS 1Y (TTM)-15.23%
EPS 3Y13.14%
EPS 5Y10.26%
EPS Q2Q%-11.41%
Revenue 1Y (TTM)-3.62%
Revenue growth 3Y6.87%
Revenue growth 5Y7.79%
Sales Q2Q%-7.72%
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 8.95% yearly.
The Revenue is expected to grow by 1.23% on average over the next years.
EPS Next Y3.4%
EPS Next 2Y8.95%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year-1.27%
Revenue Next 2Y1.23%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
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
A Price/Earnings ratio of 17.50 indicates a rather expensive valuation of ALG.
ALG's Price/Earnings ratio is a bit cheaper when compared to the industry. ALG is cheaper than 63.28% of the companies in the same industry.
ALG is valuated rather cheaply when we compare the Price/Earnings ratio to 28.78, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 16.93, which indicates a correct valuation of ALG.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ALG indicates a somewhat cheap valuation: ALG is cheaper than 64.84% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.32, ALG is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.5 | ||
| Fwd PE | 16.93 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ALG is valued a bit cheaper than the industry average as 71.88% of the companies are valued more expensively.
ALG's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ALG is cheaper than 87.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.04 | ||
| EV/EBITDA | 9.46 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ALG does not grow enough to justify the current Price/Earnings ratio.
ALG has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)5.15
PEG (5Y)1.71
EPS Next 2Y8.95%
EPS Next 3YN/A
5. Dividend
5.1 Amount
ALG has a yearly dividend return of 0.70%, which is pretty low.
Compared to an average industry Dividend Yield of 2.03, ALG has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.46, ALG's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.7% |
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 10.73% 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.
DP10.73%
EPS Next 2Y8.95%
EPS Next 3YN/A
168.55
-2.01 (-1.18%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners85.04%
Inst Owner Change-62.37%
Ins Owners0.99%
Ins Owner Change1%
Market Cap2.04B
Analysts80
Price Target207.57 (23.15%)
Short Float %2.94%
Short Ratio2.76
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.7% |
Yearly Dividend1.04
Dividend Growth(5Y)16.84%
DP10.73%
Div Incr Years10
Div Non Decr Years24
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-2.49%
Min EPS beat(2)-7.39%
Max EPS beat(2)2.42%
EPS beat(4)2
Avg EPS beat(4)-3.68%
Min EPS beat(4)-14.4%
Max EPS beat(4)4.65%
EPS beat(8)4
Avg EPS beat(8)2.51%
EPS beat(12)6
Avg EPS beat(12)3.69%
EPS beat(16)9
Avg EPS beat(16)3.12%
Revenue beat(2)0
Avg Revenue beat(2)-2.8%
Min Revenue beat(2)-3.87%
Max Revenue beat(2)-1.72%
Revenue beat(4)1
Avg Revenue beat(4)-1.7%
Min Revenue beat(4)-3.87%
Max Revenue beat(4)2.61%
Revenue beat(8)4
Avg Revenue beat(8)0.09%
Revenue beat(12)7
Avg Revenue beat(12)0.73%
Revenue beat(16)10
Avg Revenue beat(16)1.5%
PT rev (1m)-0.25%
PT rev (3m)-7.6%
EPS NQ rev (1m)-0.33%
EPS NQ rev (3m)-3.45%
EPS NY rev (1m)-0.38%
EPS NY rev (3m)-9.16%
Revenue NQ rev (1m)-0.29%
Revenue NQ rev (3m)-1.05%
Revenue NY rev (1m)-0.06%
Revenue NY rev (3m)-1.98%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.5 | ||
| Fwd PE | 16.93 | ||
| P/S | 1.25 | ||
| P/FCF | 11.04 | ||
| P/OCF | 9.71 | ||
| P/B | 2 | ||
| P/tB | 3.07 | ||
| EV/EBITDA | 9.46 |
EPS(TTM)9.63
EY5.71%
EPS(NY)9.96
Fwd EY5.91%
FCF(TTM)15.26
FCFY9.06%
OCF(TTM)17.35
OCFY10.29%
SpS134.7
BVpS84.22
TBVpS54.91
PEG (NY)5.15
PEG (5Y)1.71
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.99% | ||
| ROE | 11.39% | ||
| ROCE | 13.08% | ||
| ROIC | 10.15% | ||
| ROICexc | 12.04% | ||
| ROICexgc | 18.06% | ||
| OM | 10.12% | ||
| PM (TTM) | 7.12% | ||
| GM | 25.33% | ||
| FCFM | 11.33% |
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 Turnover1.12
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.2 | ||
| Debt/FCF | 1.19 | ||
| Debt/EBITDA | 0.94 | ||
| Cap/Depr | 47.52% | ||
| Cap/Sales | 1.55% | ||
| Interest Coverage | 7.93 | ||
| Cash Conversion | 96.28% | ||
| Profit Quality | 159.19% | ||
| Current Ratio | 4.51 | ||
| Quick Ratio | 2.7 | ||
| Altman-Z | 5.8 |
F-Score6
WACC10.14%
ROIC/WACC1
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)-15.23%
EPS 3Y13.14%
EPS 5Y10.26%
EPS Q2Q%-11.41%
EPS Next Y3.4%
EPS Next 2Y8.95%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-3.62%
Revenue growth 3Y6.87%
Revenue growth 5Y7.79%
Sales Q2Q%-7.72%
Revenue Next Year-1.27%
Revenue Next 2Y1.23%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-16.76%
EBIT growth 3Y12.13%
EBIT growth 5Y11.67%
EBIT Next Year31.09%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y97.57%
FCF growth 3Y96.3%
FCF growth 5Y26.31%
OCF growth 1Y59.95%
OCF growth 3Y61.61%
OCF growth 5Y18.76%