AZZ INC (AZZ) Stock Fundamental Analysis
NYSE:AZZ - New York Stock Exchange, Inc. - US0024741045 - Common Stock - Currency: USD
AZZ gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 40 industry peers in the Building Products industry. AZZ has a bad profitability rating. Also its financial health evaluation is rather negative. AZZ has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
AZZ had positive earnings in the past year.
In the past year AZZ had a positive cash flow from operations.
In multiple years AZZ reported negative net income over the last 5 years.
AZZ had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
AZZ's Return On Assets of 2.07% is on the low side compared to the rest of the industry. AZZ is outperformed by 75.00% of its industry peers.
With a Return On Equity value of 4.52%, AZZ is not doing good in the industry: 75.00% of the companies in the same industry are doing better.
With a Return On Invested Capital value of 9.01%, AZZ perfoms like the industry average, outperforming 47.50% of the companies in the same industry.
AZZ had an Average Return On Invested Capital over the past 3 years of 10.08%. This is below the industry average of 13.20%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.07% | ||
| ROE | 4.52% | ||
| ROIC | 9.01% |
ROA(3y)-1.39%
ROA(5y)0.86%
ROE(3y)-2.34%
ROE(5y)1.39%
ROIC(3y)10.08%
ROIC(5y)9.35%
1.3 Margins
With a Profit Margin value of 2.92%, AZZ is not doing good in the industry: 75.00% of the companies in the same industry are doing better.
In the last couple of years the Profit Margin of AZZ has remained more or less at the same level.
AZZ has a Operating Margin (14.96%) which is in line with its industry peers.
In the last couple of years the Operating Margin of AZZ has grown nicely.
The Gross Margin of AZZ (24.18%) is worse than 72.50% of its industry peers.
AZZ's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.96% | ||
| PM (TTM) | 2.92% | ||
| GM | 24.18% |
OM growth 3Y14.99%
OM growth 5Y12.23%
PM growth 3Y6.31%
PM growth 5Y0.53%
GM growth 3Y1.67%
GM growth 5Y1.99%
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.
Compared to 1 year ago, AZZ has more shares outstanding
Compared to 5 years ago, AZZ has less shares outstanding
Compared to 1 year ago, AZZ has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.96 indicates that AZZ is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of AZZ (2.96) is worse than 62.50% of its industry peers.
The Debt to FCF ratio of AZZ is 6.55, which is on the high side as it means it would take AZZ, 6.55 years of fcf income to pay off all of its debts.
AZZ's Debt to FCF ratio of 6.55 is on the low side compared to the rest of the industry. AZZ is outperformed by 77.50% of its industry peers.
A Debt/Equity ratio of 0.86 indicates that AZZ is somewhat dependend on debt financing.
AZZ has a worse Debt to Equity ratio (0.86) than 72.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.86 | ||
| Debt/FCF | 6.55 | ||
| Altman-Z | 2.96 |
ROIC/WACC0.82
WACC10.98%
2.3 Liquidity
A Current Ratio of 1.77 indicates that AZZ should not have too much problems paying its short term obligations.
AZZ's Current ratio of 1.77 is on the low side compared to the rest of the industry. AZZ is outperformed by 60.00% of its industry peers.
A Quick Ratio of 1.26 indicates that AZZ should not have too much problems paying its short term obligations.
AZZ has a Quick ratio of 1.26. This is comparable to the rest of the industry: AZZ outperforms 50.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.77 | ||
| Quick Ratio | 1.26 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 32.05% over the past year.
The Earnings Per Share has been growing by 18.24% on average over the past years. This is quite good.
Looking at the last year, AZZ shows a small growth in Revenue. The Revenue has grown by 5.63% in the last year.
Measured over the past years, AZZ shows a quite strong growth in Revenue. The Revenue has been growing by 10.65% on average per year.
EPS 1Y (TTM)32.05%
EPS 3Y28.8%
EPS 5Y18.24%
EPS Q2Q%16.81%
Revenue 1Y (TTM)5.63%
Revenue growth 3Y22.38%
Revenue growth 5Y10.65%
Sales Q2Q%5.78%
3.2 Future
AZZ is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.77% yearly.
AZZ is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.58% yearly.
EPS Next Y15.64%
EPS Next 2Y14.06%
EPS Next 3Y12.23%
EPS Next 5Y11.77%
Revenue Next Year5.01%
Revenue Next 2Y5.07%
Revenue Next 3Y4.64%
Revenue Next 5Y5.58%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 18.43, the valuation of AZZ can be described as rather expensive.
AZZ's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 29.63. AZZ is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 16.10, AZZ is valued correctly.
AZZ's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 22.68. AZZ is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.43 | ||
| Fwd PE | 16.1 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AZZ indicates a somewhat cheap valuation: AZZ is cheaper than 62.50% of the companies listed in the same industry.
AZZ's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.01 | ||
| EV/EBITDA | 11.88 |
4.3 Compensation for Growth
AZZ's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as AZZ's earnings are expected to grow with 12.23% in the coming years.
PEG (NY)1.18
PEG (5Y)1.01
EPS Next 2Y14.06%
EPS Next 3Y12.23%
5. Dividend
5.1 Amount
AZZ has a yearly dividend return of 0.70%, which is pretty low.
Compared to an average industry Dividend Yield of 1.11, AZZ has a dividend in line with its industry peers.
With a Dividend Yield of 0.70, AZZ pays less dividend than the S&P500 average, which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.7% |
5.2 History
On average, the dividend of AZZ grows each year by 13.09%, which is quite nice.
AZZ has been paying a dividend for at least 10 years, so it has a reliable track record.
AZZ has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)13.09%
Div Incr Years0
Div Non Decr Years14
5.3 Sustainability
55.69% of the earnings are spent on dividend by AZZ. This is a bit on the high side, but may be sustainable.
AZZ's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP55.69%
EPS Next 2Y14.06%
EPS Next 3Y12.23%
94.9
-2.76 (-2.83%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners93.93%
Inst Owner Change1.7%
Ins Owners1.68%
Ins Owner Change-0.29%
Market Cap2.84B
Analysts76.92
Price Target105.83 (11.52%)
Short Float %1.86%
Short Ratio2.7
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.7% |
Yearly Dividend1.26
Dividend Growth(5Y)13.09%
DP55.69%
Div Incr Years0
Div Non Decr Years14
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.39%
Min EPS beat(2)3.05%
Max EPS beat(2)9.72%
EPS beat(4)4
Avg EPS beat(4)14.06%
Min EPS beat(4)3.05%
Max EPS beat(4)31.92%
EPS beat(8)7
Avg EPS beat(8)11.31%
EPS beat(12)10
Avg EPS beat(12)12.26%
EPS beat(16)14
Avg EPS beat(16)13.61%
Revenue beat(2)1
Avg Revenue beat(2)-0.42%
Min Revenue beat(2)-1.66%
Max Revenue beat(2)0.82%
Revenue beat(4)3
Avg Revenue beat(4)1.03%
Min Revenue beat(4)-1.66%
Max Revenue beat(4)3.18%
Revenue beat(8)4
Avg Revenue beat(8)0%
Revenue beat(12)6
Avg Revenue beat(12)23.68%
Revenue beat(16)6
Avg Revenue beat(16)9.35%
PT rev (1m)1.01%
PT rev (3m)3.53%
EPS NQ rev (1m)-0.07%
EPS NQ rev (3m)-15.08%
EPS NY rev (1m)2.47%
EPS NY rev (3m)2.62%
Revenue NQ rev (1m)-2.38%
Revenue NQ rev (3m)-5.1%
Revenue NY rev (1m)0.12%
Revenue NY rev (3m)0.25%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.43 | ||
| Fwd PE | 16.1 | ||
| P/S | 1.78 | ||
| P/FCF | 21.01 | ||
| P/OCF | 11.38 | ||
| P/B | 2.75 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.88 |
EPS(TTM)5.15
EY5.43%
EPS(NY)5.89
Fwd EY6.21%
FCF(TTM)4.52
FCFY4.76%
OCF(TTM)8.34
OCFY8.79%
SpS53.29
BVpS34.46
TBVpS-3.44
PEG (NY)1.18
PEG (5Y)1.01
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.07% | ||
| ROE | 4.52% | ||
| ROCE | 11.78% | ||
| ROIC | 9.01% | ||
| ROICexc | 9.02% | ||
| ROICexgc | 20.51% | ||
| OM | 14.96% | ||
| PM (TTM) | 2.92% | ||
| GM | 24.18% | ||
| FCFM | 8.48% |
ROA(3y)-1.39%
ROA(5y)0.86%
ROE(3y)-2.34%
ROE(5y)1.39%
ROIC(3y)10.08%
ROIC(5y)9.35%
ROICexc(3y)10.17%
ROICexc(5y)9.52%
ROICexgc(3y)21.98%
ROICexgc(5y)21.27%
ROCE(3y)13.19%
ROCE(5y)12.23%
ROICexcg growth 3Y11.29%
ROICexcg growth 5Y9.25%
ROICexc growth 3Y6.59%
ROICexc growth 5Y5.88%
OM growth 3Y14.99%
OM growth 5Y12.23%
PM growth 3Y6.31%
PM growth 5Y0.53%
GM growth 3Y1.67%
GM growth 5Y1.99%
F-Score6
Asset Turnover0.71
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.86 | ||
| Debt/FCF | 6.55 | ||
| Debt/EBITDA | 2.76 | ||
| Cap/Depr | 139.61% | ||
| Cap/Sales | 7.17% | ||
| Interest Coverage | 2.9 | ||
| Cash Conversion | 77.85% | ||
| Profit Quality | 290.34% | ||
| Current Ratio | 1.77 | ||
| Quick Ratio | 1.26 | ||
| Altman-Z | 2.96 |
F-Score6
WACC10.98%
ROIC/WACC0.82
Cap/Depr(3y)86.61%
Cap/Depr(5y)81.59%
Cap/Sales(3y)4.22%
Cap/Sales(5y)4.03%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)32.05%
EPS 3Y28.8%
EPS 5Y18.24%
EPS Q2Q%16.81%
EPS Next Y15.64%
EPS Next 2Y14.06%
EPS Next 3Y12.23%
EPS Next 5Y11.77%
Revenue 1Y (TTM)5.63%
Revenue growth 3Y22.38%
Revenue growth 5Y10.65%
Sales Q2Q%5.78%
Revenue Next Year5.01%
Revenue Next 2Y5.07%
Revenue Next 3Y4.64%
Revenue Next 5Y5.58%
EBIT growth 1Y10.55%
EBIT growth 3Y40.72%
EBIT growth 5Y24.18%
EBIT Next Year46.76%
EBIT Next 3Y17.15%
EBIT Next 5YN/A
FCF growth 1Y107.02%
FCF growth 3Y39.6%
FCF growth 5Y11.7%
OCF growth 1Y120.67%
OCF growth 3Y38.51%
OCF growth 5Y17.21%