ARMSTRONG WORLD INDUSTRIES (AWI) Stock Fundamental Analysis
NYSE:AWI - New York Stock Exchange, Inc. - US04247X1028 - Common Stock - Currency: USD
Taking everything into account, AWI scores 5 out of 10 in our fundamental rating. AWI was compared to 40 industry peers in the Building Products industry. While AWI belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. AWI is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year AWI was profitable.
AWI had a positive operating cash flow in the past year.
Of the past 5 years AWI 4 years were profitable.
In the past 5 years AWI always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of AWI (13.83%) is better than 80.00% of its industry peers.
AWI has a Return On Equity of 34.80%. This is amongst the best in the industry. AWI outperforms 87.50% of its industry peers.
AWI has a Return On Invested Capital (12.62%) which is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for AWI is below the industry average of 13.20%.
The last Return On Invested Capital (12.62%) for AWI is above the 3 year average (10.36%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.83% | ||
| ROE | 34.8% | ||
| ROIC | 12.62% |
ROA(3y)12.04%
ROA(5y)8.94%
ROE(3y)37%
ROE(5y)29.53%
ROIC(3y)10.36%
ROIC(5y)10.41%
1.3 Margins
With an excellent Profit Margin value of 17.95%, AWI belongs to the best of the industry, outperforming 92.50% of the companies in the same industry.
AWI's Profit Margin has declined in the last couple of years.
AWI's Operating Margin of 18.86% is fine compared to the rest of the industry. AWI outperforms 70.00% of its industry peers.
AWI's Operating Margin has been stable in the last couple of years.
With a decent Gross Margin value of 40.10%, AWI is doing good in the industry, outperforming 75.00% of the companies in the same industry.
AWI's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.86% | ||
| PM (TTM) | 17.95% | ||
| GM | 40.1% |
OM growth 3Y-0.05%
OM growth 5Y0.23%
PM growth 3YN/A
PM growth 5Y-1.88%
GM growth 3Y2.58%
GM growth 5Y2.33%
2. Health
2.1 Basic Checks
AWI 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, AWI has less shares outstanding
The number of shares outstanding for AWI has been reduced compared to 5 years ago.
Compared to 1 year ago, AWI has an improved debt to assets ratio.
2.2 Solvency
AWI has an Altman-Z score of 6.05. This indicates that AWI is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 6.05, AWI is doing good in the industry, outperforming 67.50% of the companies in the same industry.
The Debt to FCF ratio of AWI is 3.66, which is a good value as it means it would take AWI, 3.66 years of fcf income to pay off all of its debts.
AWI's Debt to FCF ratio of 3.66 is in line compared to the rest of the industry. AWI outperforms 55.00% of its industry peers.
AWI has a Debt/Equity ratio of 0.78. This is a neutral value indicating AWI is somewhat dependend on debt financing.
The Debt to Equity ratio of AWI (0.78) is worse than 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 3.66 | ||
| Altman-Z | 6.05 |
ROIC/WACC1.21
WACC10.41%
2.3 Liquidity
AWI has a Current Ratio of 1.64. This is a normal value and indicates that AWI is financially healthy and should not expect problems in meeting its short term obligations.
AWI has a worse Current ratio (1.64) than 70.00% of its industry peers.
A Quick Ratio of 1.11 indicates that AWI should not have too much problems paying its short term obligations.
AWI has a Quick ratio of 1.11. This is in the lower half of the industry: AWI underperforms 65.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.64 | ||
| Quick Ratio | 1.11 |
3. Growth
3.1 Past
AWI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 16.41%, which is quite good.
AWI shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.48% yearly.
AWI shows a small growth in Revenue. In the last year, the Revenue has grown by 7.99%.
Measured over the past years, AWI shows a small growth in Revenue. The Revenue has been growing by 5.84% on average per year.
EPS 1Y (TTM)16.41%
EPS 3Y12.97%
EPS 5Y7.48%
EPS Q2Q%13.12%
Revenue 1Y (TTM)7.99%
Revenue growth 3Y11.4%
Revenue growth 5Y5.84%
Sales Q2Q%11.32%
3.2 Future
AWI is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.29% yearly.
The Revenue is expected to grow by 8.46% on average over the next years. This is quite good.
EPS Next Y17.61%
EPS Next 2Y14.19%
EPS Next 3Y13.29%
EPS Next 5YN/A
Revenue Next Year10.99%
Revenue Next 2Y9.33%
Revenue Next 3Y8.46%
Revenue Next 5YN/A
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
With a Price/Earnings ratio of 24.36, AWI is valued on the expensive side.
Based on the Price/Earnings ratio, AWI is valued a bit more expensive than the industry average as 62.50% of the companies are valued more cheaply.
The average S&P500 Price/Earnings ratio is at 29.63. AWI is around the same levels.
With a Price/Forward Earnings ratio of 21.17, AWI is valued on the expensive side.
60.00% of the companies in the same industry are cheaper than AWI, based on the Price/Forward Earnings ratio.
AWI's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.36 | ||
| Fwd PE | 21.17 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AWI is valued a bit more expensive than the industry average as 67.50% of the companies are valued more cheaply.
Based on the Price/Free Cash Flow ratio, AWI is valued a bit more expensive than 72.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.12 | ||
| EV/EBITDA | 19.12 |
4.3 Compensation for Growth
AWI's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of AWI may justify a higher PE ratio.
AWI's earnings are expected to grow with 13.29% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.38
PEG (5Y)3.26
EPS Next 2Y14.19%
EPS Next 3Y13.29%
5. Dividend
5.1 Amount
AWI has a yearly dividend return of 0.82%, which is pretty low.
AWI's Dividend Yield is a higher than the industry average which is at 1.11.
With a Dividend Yield of 0.82, AWI pays less dividend than the S&P500 average, which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.82% |
5.2 History
On average, the dividend of AWI grows each year by 43.99%, which is quite nice.
AWI has been paying a dividend for over 5 years, so it has already some track record.
As AWI did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)43.99%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
AWI pays out 19.88% of its income as dividend. This is a sustainable payout ratio.
The dividend of AWI is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP19.88%
EPS Next 2Y14.19%
EPS Next 3Y13.29%
146.89
-2.45 (-1.64%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners103.44%
Inst Owner Change-89.98%
Ins Owners1.26%
Ins Owner Change0%
Market Cap6.40B
Analysts75
Price Target157.72 (7.37%)
Short Float %1.07%
Short Ratio2.44
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.82% |
Yearly Dividend1.05
Dividend Growth(5Y)43.99%
DP19.88%
Div Incr Years6
Div Non Decr Years6
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.82%
Min EPS beat(2)2.19%
Max EPS beat(2)3.46%
EPS beat(4)4
Avg EPS beat(4)8.36%
Min EPS beat(4)2.19%
Max EPS beat(4)16.64%
EPS beat(8)7
Avg EPS beat(8)7.03%
EPS beat(12)8
Avg EPS beat(12)2.71%
EPS beat(16)10
Avg EPS beat(16)2.36%
Revenue beat(2)1
Avg Revenue beat(2)-0.35%
Min Revenue beat(2)-1.01%
Max Revenue beat(2)0.31%
Revenue beat(4)3
Avg Revenue beat(4)0.4%
Min Revenue beat(4)-1.01%
Max Revenue beat(4)1.18%
Revenue beat(8)5
Avg Revenue beat(8)0.16%
Revenue beat(12)7
Avg Revenue beat(12)-0.31%
Revenue beat(16)10
Avg Revenue beat(16)0.34%
PT rev (1m)2.06%
PT rev (3m)3.26%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)0.04%
EPS NY rev (3m)0.04%
Revenue NQ rev (1m)0.17%
Revenue NQ rev (3m)0.17%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.36 | ||
| Fwd PE | 21.17 | ||
| P/S | 4.61 | ||
| P/FCF | 40.12 | ||
| P/OCF | 26.98 | ||
| P/B | 8.93 | ||
| P/tB | 76.77 | ||
| EV/EBITDA | 19.12 |
EPS(TTM)6.03
EY4.11%
EPS(NY)6.94
Fwd EY4.72%
FCF(TTM)3.66
FCFY2.49%
OCF(TTM)5.44
OCFY3.71%
SpS31.89
BVpS16.45
TBVpS1.91
PEG (NY)1.38
PEG (5Y)3.26
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.83% | ||
| ROE | 34.8% | ||
| ROCE | 16.54% | ||
| ROIC | 12.62% | ||
| ROICexc | 13.23% | ||
| ROICexgc | 22.78% | ||
| OM | 18.86% | ||
| PM (TTM) | 17.95% | ||
| GM | 40.1% | ||
| FCFM | 11.48% |
ROA(3y)12.04%
ROA(5y)8.94%
ROE(3y)37%
ROE(5y)29.53%
ROIC(3y)10.36%
ROIC(5y)10.41%
ROICexc(3y)11.02%
ROICexc(5y)11.06%
ROICexgc(3y)18.88%
ROICexgc(5y)18.67%
ROCE(3y)13.57%
ROCE(5y)13.64%
ROICexcg growth 3Y10.06%
ROICexcg growth 5Y-3.1%
ROICexc growth 3Y11.4%
ROICexc growth 5Y-1.67%
OM growth 3Y-0.05%
OM growth 5Y0.23%
PM growth 3YN/A
PM growth 5Y-1.88%
GM growth 3Y2.58%
GM growth 5Y2.33%
F-Score7
Asset Turnover0.77
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 3.66 | ||
| Debt/EBITDA | 1.54 | ||
| Cap/Depr | 78.25% | ||
| Cap/Sales | 5.59% | ||
| Interest Coverage | 7.13 | ||
| Cash Conversion | 65.64% | ||
| Profit Quality | 63.97% | ||
| Current Ratio | 1.64 | ||
| Quick Ratio | 1.11 | ||
| Altman-Z | 6.05 |
F-Score7
WACC10.41%
ROIC/WACC1.21
Cap/Depr(3y)88.67%
Cap/Depr(5y)86.17%
Cap/Sales(3y)6.58%
Cap/Sales(5y)6.51%
Profit Quality(3y)59.52%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)16.41%
EPS 3Y12.97%
EPS 5Y7.48%
EPS Q2Q%13.12%
EPS Next Y17.61%
EPS Next 2Y14.19%
EPS Next 3Y13.29%
EPS Next 5YN/A
Revenue 1Y (TTM)7.99%
Revenue growth 3Y11.4%
Revenue growth 5Y5.84%
Sales Q2Q%11.32%
Revenue Next Year10.99%
Revenue Next 2Y9.33%
Revenue Next 3Y8.46%
Revenue Next 5YN/A
EBIT growth 1Y7.9%
EBIT growth 3Y11.35%
EBIT growth 5Y6.08%
EBIT Next Year50.54%
EBIT Next 3Y20.93%
EBIT Next 5YN/A
FCF growth 1Y77.14%
FCF growth 3Y-2.88%
FCF growth 5Y2.66%
OCF growth 1Y40.83%
OCF growth 3Y2.19%
OCF growth 5Y2.82%