HOWMET AEROSPACE INC (HWM) Stock Fundamental Analysis
NYSE:HWM - New York Stock Exchange, Inc. - US4432011082 - Common Stock
Taking everything into account, HWM scores 7 out of 10 in our fundamental rating. HWM was compared to 65 industry peers in the Aerospace & Defense industry. Both the health and profitability get an excellent rating, making HWM a very profitable company, without any liquidiy or solvency issues. HWM is not valued too expensively and it also shows a decent growth rate. With these ratings, HWM could be worth investigating further for quality investing!.
1. Profitability
1.1 Basic Checks
In the past year HWM was profitable.
HWM had a positive operating cash flow in the past year.
HWM had positive earnings in each of the past 5 years.
Each year in the past 5 years HWM had a positive operating cash flow.
1.2 Ratios
HWM has a better Return On Assets (10.18%) than 92.19% of its industry peers.
Looking at the Return On Equity, with a value of 23.87%, HWM belongs to the top of the industry, outperforming 93.75% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 13.36%, HWM belongs to the top of the industry, outperforming 95.31% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for HWM is in line with the industry average of 7.66%.
The last Return On Invested Capital (13.36%) for HWM is above the 3 year average (9.00%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.18% | ||
| ROE | 23.87% | ||
| ROIC | 13.36% |
ROA(3y)4.79%
ROA(5y)3.86%
ROE(3y)13.06%
ROE(5y)11.32%
ROIC(3y)9%
ROIC(5y)8.04%
1.3 Margins
With an excellent Profit Margin value of 14.79%, HWM belongs to the best of the industry, outperforming 90.63% of the companies in the same industry.
In the last couple of years the Profit Margin of HWM has grown nicely.
With an excellent Operating Margin value of 21.32%, HWM belongs to the best of the industry, outperforming 93.75% of the companies in the same industry.
In the last couple of years the Operating Margin of HWM has grown nicely.
HWM's Gross Margin of 30.40% is fine compared to the rest of the industry. HWM outperforms 73.44% of its industry peers.
In the last couple of years the Gross Margin of HWM has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.32% | ||
| PM (TTM) | 14.79% | ||
| GM | 30.4% |
OM growth 3Y6.32%
OM growth 5Y5.94%
PM growth 3Y32.63%
PM growth 5Y4.01%
GM growth 3Y2.3%
GM growth 5Y2.75%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), HWM is creating some value.
The number of shares outstanding for HWM has been reduced compared to 1 year ago.
The number of shares outstanding for HWM has been reduced compared to 5 years ago.
HWM has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 6.83 indicates that HWM is not in any danger for bankruptcy at the moment.
HWM has a Altman-Z score of 6.83. This is amongst the best in the industry. HWM outperforms 84.38% of its industry peers.
The Debt to FCF ratio of HWM is 3.39, which is a good value as it means it would take HWM, 3.39 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 3.39, HWM belongs to the best of the industry, outperforming 84.38% of the companies in the same industry.
HWM has a Debt/Equity ratio of 0.75. This is a neutral value indicating HWM is somewhat dependend on debt financing.
HWM has a worse Debt to Equity ratio (0.75) than 67.19% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.75 | ||
| Debt/FCF | 3.39 | ||
| Altman-Z | 6.83 |
ROIC/WACC1.32
WACC10.1%
2.3 Liquidity
A Current Ratio of 2.24 indicates that HWM has no problem at all paying its short term obligations.
HWM has a Current ratio (2.24) which is comparable to the rest of the industry.
HWM has a Quick Ratio of 2.24. This is a bad value and indicates that HWM is not financially healthy enough and could expect problems in meeting its short term obligations.
HWM has a Quick ratio of 0.98. This is in the lower half of the industry: HWM underperforms 64.06% of its industry peers.
The current and quick ratio evaluation for HWM is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.24 | ||
| Quick Ratio | 0.98 |
3. Growth
3.1 Past
HWM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 45.88%, which is quite impressive.
The Earnings Per Share has been growing slightly by 6.35% on average over the past years.
Looking at the last year, HWM shows a quite strong growth in Revenue. The Revenue has grown by 13.20% in the last year.
The Revenue has been decreasing by -0.41% on average over the past years.
EPS 1Y (TTM)45.88%
EPS 3Y23.59%
EPS 5Y6.35%
EPS Q2Q%54.35%
Revenue 1Y (TTM)13.2%
Revenue growth 3Y8.08%
Revenue growth 5Y-0.41%
Sales Q2Q%10.68%
3.2 Future
HWM is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 23.57% yearly.
Based on estimates for the next years, HWM will show a quite strong growth in Revenue. The Revenue will grow by 10.13% on average per year.
EPS Next Y45.67%
EPS Next 2Y32.26%
EPS Next 3Y28.98%
EPS Next 5Y23.57%
Revenue Next Year13.29%
Revenue Next 2Y10.8%
Revenue Next 3Y10.93%
Revenue Next 5Y10.13%
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 accelerating.
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
The Price/Earnings ratio is 51.27, which means the current valuation is very expensive for HWM.
HWM's Price/Earnings ratio is in line with the industry average.
HWM's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 28.29.
With a Price/Forward Earnings ratio of 39.29, HWM can be considered very expensive at the moment.
HWM's Price/Forward Earnings ratio is in line with the industry average.
HWM's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 24.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 51.27 | ||
| Fwd PE | 39.29 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HWM is on the same level as its industry peers.
Based on the Price/Free Cash Flow ratio, HWM is valued a bit cheaper than 67.19% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 51.56 | ||
| EV/EBITDA | 29.96 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
HWM has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as HWM's earnings are expected to grow with 28.98% in the coming years.
PEG (NY)1.12
PEG (5Y)8.08
EPS Next 2Y32.26%
EPS Next 3Y28.98%
5. Dividend
5.1 Amount
HWM has a yearly dividend return of 0.26%, which is pretty low.
HWM's Dividend Yield is a higher than the industry average which is at 1.36.
Compared to an average S&P500 Dividend Yield of 2.28, HWM's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.26% |
5.2 History
The dividend of HWM decreases each year by -6.38%.
HWM has paid a dividend for at least 10 years, which is a reliable track record.
HWM has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)-6.38%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
9.02% of the earnings are spent on dividend by HWM. This is a low number and sustainable payout ratio.
DP9.02%
EPS Next 2Y32.26%
EPS Next 3Y28.98%
HOWMET AEROSPACE INC
NYSE:HWM (1/21/2025, 8:06:22 PM)
After market: 127.16 0 (0%)127.16
+1.86 (+1.48%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners93.64%
Inst Owner Change-0.1%
Ins Owners1.05%
Ins Owner Change-5.19%
Market Cap51.66B
Analysts80.67
Price Target125.1 (-1.62%)
Short Float %2.08%
Short Ratio3.52
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.26% |
Yearly Dividend0.18
Dividend Growth(5Y)-6.38%
DP9.02%
Div Incr Years3
Div Non Decr Years3
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.87%
Min EPS beat(2)7.34%
Max EPS beat(2)10.4%
EPS beat(4)4
Avg EPS beat(4)9.84%
Min EPS beat(4)7.34%
Max EPS beat(4)12.72%
EPS beat(8)7
Avg EPS beat(8)7.02%
EPS beat(12)10
Avg EPS beat(12)5.77%
EPS beat(16)14
Avg EPS beat(16)7%
Revenue beat(2)1
Avg Revenue beat(2)-0.26%
Min Revenue beat(2)-1.87%
Max Revenue beat(2)1.35%
Revenue beat(4)3
Avg Revenue beat(4)1.8%
Min Revenue beat(4)-1.87%
Max Revenue beat(4)3.99%
Revenue beat(8)7
Avg Revenue beat(8)2.49%
Revenue beat(12)9
Avg Revenue beat(12)1.38%
Revenue beat(16)9
Avg Revenue beat(16)0.57%
PT rev (1m)0.11%
PT rev (3m)20%
EPS NQ rev (1m)0%
EPS NQ rev (3m)14.92%
EPS NY rev (1m)0%
EPS NY rev (3m)2.98%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.9%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)-0.53%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 51.27 | ||
| Fwd PE | 39.29 | ||
| P/S | 7.11 | ||
| P/FCF | 51.56 | ||
| P/OCF | 40.49 | ||
| P/B | 11.47 | ||
| P/tB | N/A | ||
| EV/EBITDA | 29.96 |
EPS(TTM)2.48
EY1.95%
EPS(NY)3.24
Fwd EY2.54%
FCF(TTM)2.47
FCFY1.94%
OCF(TTM)3.14
OCFY2.47%
SpS17.89
BVpS11.08
TBVpS-0.07
PEG (NY)1.12
PEG (5Y)8.08
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.18% | ||
| ROE | 23.87% | ||
| ROCE | 17.14% | ||
| ROIC | 13.36% | ||
| ROICexc | 14.1% | ||
| ROICexgc | 29.93% | ||
| OM | 21.32% | ||
| PM (TTM) | 14.79% | ||
| GM | 30.4% | ||
| FCFM | 13.78% |
ROA(3y)4.79%
ROA(5y)3.86%
ROE(3y)13.06%
ROE(5y)11.32%
ROIC(3y)9%
ROIC(5y)8.04%
ROICexc(3y)9.78%
ROICexc(5y)8.95%
ROICexgc(3y)22.46%
ROICexgc(5y)19.61%
ROCE(3y)11.55%
ROCE(5y)10.32%
ROICexcg growth 3Y14.98%
ROICexcg growth 5Y22.93%
ROICexc growth 3Y15.57%
ROICexc growth 5Y16.03%
OM growth 3Y6.32%
OM growth 5Y5.94%
PM growth 3Y32.63%
PM growth 5Y4.01%
GM growth 3Y2.3%
GM growth 5Y2.75%
F-Score9
Asset Turnover0.69
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.75 | ||
| Debt/FCF | 3.39 | ||
| Debt/EBITDA | 1.86 | ||
| Cap/Depr | 100.74% | ||
| Cap/Sales | 3.77% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 70.03% | ||
| Profit Quality | 93.21% | ||
| Current Ratio | 2.24 | ||
| Quick Ratio | 0.98 | ||
| Altman-Z | 6.83 |
F-Score9
WACC10.1%
ROIC/WACC1.32
Cap/Depr(3y)75.68%
Cap/Depr(5y)85.13%
Cap/Sales(3y)3.57%
Cap/Sales(5y)4.96%
Profit Quality(3y)100.89%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)45.88%
EPS 3Y23.59%
EPS 5Y6.35%
EPS Q2Q%54.35%
EPS Next Y45.67%
EPS Next 2Y32.26%
EPS Next 3Y28.98%
EPS Next 5Y23.57%
Revenue 1Y (TTM)13.2%
Revenue growth 3Y8.08%
Revenue growth 5Y-0.41%
Sales Q2Q%10.68%
Revenue Next Year13.29%
Revenue Next 2Y10.8%
Revenue Next 3Y10.93%
Revenue Next 5Y10.13%
EBIT growth 1Y34.9%
EBIT growth 3Y14.91%
EBIT growth 5Y5.5%
EBIT Next Year57.59%
EBIT Next 3Y27.1%
EBIT Next 5Y23.88%
FCF growth 1Y169.36%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y119.62%
OCF growth 3Y364.33%
OCF growth 5Y32.94%