HOWMET AEROSPACE INC (HWM) Stock Fundamental Analysis
NYSE:HWM - New York Stock Exchange, Inc. - US4432011082 - Common Stock - Currency: USD
HWM gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 64 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 valued quite expensively, but it does show have an excellent growth rating. These ratings could make HWM a good candidate for growth and quality investing.
1. Profitability
1.1 Basic Checks
HWM had positive earnings in the past year.
In the past year HWM had a positive cash flow from operations.
Each year in the past 5 years HWM has been profitable.
HWM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of HWM (10.96%) is better than 93.75% of its industry peers.
The Return On Equity of HWM (25.32%) is better than 93.75% of its industry peers.
Looking at the Return On Invested Capital, with a value of 14.93%, HWM belongs to the top of the industry, outperforming 96.88% of the companies in the same industry.
HWM had an Average Return On Invested Capital over the past 3 years of 11.81%. This is above the industry average of 7.79%.
The last Return On Invested Capital (14.93%) for HWM is above the 3 year average (11.81%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.96% | ||
| ROE | 25.32% | ||
| ROIC | 14.93% |
ROA(3y)7.61%
ROA(5y)5.52%
ROE(3y)19.06%
ROE(5y)14.35%
ROIC(3y)11.81%
ROIC(5y)9.94%
1.3 Margins
With an excellent Profit Margin value of 15.52%, 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 Profit Margin of HWM has grown nicely.
HWM has a better Operating Margin (22.26%) than 96.88% of its industry peers.
HWM's Operating Margin has improved in the last couple of years.
HWM has a better Gross Margin (31.10%) than 70.31% of its industry peers.
HWM's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.26% | ||
| PM (TTM) | 15.52% | ||
| GM | 31.1% |
OM growth 3Y9.72%
OM growth 5Y6.18%
PM growth 3Y44.45%
PM growth 5Y18.67%
GM growth 3Y3.97%
GM growth 5Y3.11%
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.
Compared to 1 year ago, HWM has less shares outstanding
The number of shares outstanding for HWM has been reduced compared to 5 years ago.
The debt/assets ratio for HWM has been reduced compared to a year ago.
2.2 Solvency
HWM has an Altman-Z score of 6.82. This indicates that HWM is financially healthy and has little risk of bankruptcy at the moment.
HWM has a better Altman-Z score (6.82) than 85.94% 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.
Looking at the Debt to FCF ratio, with a value of 3.39, HWM belongs to the top of the industry, outperforming 82.81% of the companies in the same industry.
HWM has a Debt/Equity ratio of 0.73. This is a neutral value indicating HWM is somewhat dependend on debt financing.
HWM has a Debt to Equity ratio of 0.73. This is in the lower half of the industry: HWM underperforms 65.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.73 | ||
| Debt/FCF | 3.39 | ||
| Altman-Z | 6.82 |
ROIC/WACC1.55
WACC9.64%
2.3 Liquidity
A Current Ratio of 2.17 indicates that HWM has no problem at all paying its short term obligations.
The Current ratio of HWM (2.17) is comparable to the rest of the industry.
HWM has a Quick Ratio of 2.17. 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 worse Quick ratio (0.98) than 65.63% of its industry peers.
HWM does not score too well on the current and quick ratio evaluation. However, as it has 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 | 2.17 | ||
| 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 45.41%, which is quite impressive.
HWM shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.88% yearly.
The Revenue has grown by 11.90% in the past year. This is quite good.
The Revenue has been growing slightly by 0.92% on average over the past years.
EPS 1Y (TTM)45.41%
EPS 3Y38.62%
EPS 5Y4.88%
EPS Q2Q%39.62%
Revenue 1Y (TTM)11.9%
Revenue growth 3Y14.33%
Revenue growth 5Y0.92%
Sales Q2Q%9.24%
3.2 Future
HWM is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 22.94% yearly.
Based on estimates for the next years, HWM will show a quite strong growth in Revenue. The Revenue will grow by 11.36% on average per year.
EPS Next Y23.52%
EPS Next 2Y22.11%
EPS Next 3Y20.57%
EPS Next 5Y22.94%
Revenue Next Year9.1%
Revenue Next 2Y9.97%
Revenue Next 3Y9.9%
Revenue Next 5Y11.36%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last 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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
HWM is valuated quite expensively with a Price/Earnings ratio of 45.81.
HWM's Price/Earnings is on the same level as 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.
A Price/Forward Earnings ratio of 37.09 indicates a quite expensive valuation of HWM.
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 21.08.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 45.81 | ||
| Fwd PE | 37.09 |
4.2 Price Multiples
HWM's Enterprise Value to EBITDA ratio is in line with the industry average.
64.06% of the companies in the same industry are more expensive than HWM, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 51.09 | ||
| EV/EBITDA | 27.27 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive 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 20.57% in the coming years.
PEG (NY)1.95
PEG (5Y)9.39
EPS Next 2Y22.11%
EPS Next 3Y20.57%
5. Dividend
5.1 Amount
HWM has a yearly dividend return of 0.32%, which is pretty low.
Compared to an average industry Dividend Yield of 1.42, HWM pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.32, HWM pays less dividend than the S&P500 average, which is at 2.57.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.32% |
5.2 History
The dividend of HWM is nicely growing with an annual growth rate of 16.52%!
HWM has been paying a dividend for at least 10 years, so it has a reliable track record.
HWM has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)16.52%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
9.45% of the earnings are spent on dividend by HWM. This is a low number and sustainable payout ratio.
The dividend of HWM is growing, but earnings are growing more, so the dividend growth is sustainable.
DP9.45%
EPS Next 2Y22.11%
EPS Next 3Y20.57%
123.23
-0.7 (-0.56%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners92.82%
Inst Owner Change0.03%
Ins Owners1.05%
Ins Owner Change6.87%
Market Cap49.91B
Analysts80
Price Target140.63 (14.12%)
Short Float %2.36%
Short Ratio3.18
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.32% |
Yearly Dividend0.27
Dividend Growth(5Y)16.52%
DP9.45%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.72%
Min EPS beat(2)2.1%
Max EPS beat(2)7.34%
EPS beat(4)4
Avg EPS beat(4)7.18%
Min EPS beat(4)2.1%
Max EPS beat(4)10.4%
EPS beat(8)8
Avg EPS beat(8)7.38%
EPS beat(12)10
Avg EPS beat(12)5.69%
EPS beat(16)14
Avg EPS beat(16)5.69%
Revenue beat(2)0
Avg Revenue beat(2)-1.09%
Min Revenue beat(2)-1.87%
Max Revenue beat(2)-0.32%
Revenue beat(4)2
Avg Revenue beat(4)0.79%
Min Revenue beat(4)-1.87%
Max Revenue beat(4)3.99%
Revenue beat(8)6
Avg Revenue beat(8)2.2%
Revenue beat(12)9
Avg Revenue beat(12)1.6%
Revenue beat(16)9
Avg Revenue beat(16)0.56%
PT rev (1m)0.62%
PT rev (3m)12.42%
EPS NQ rev (1m)0.15%
EPS NQ rev (3m)10.39%
EPS NY rev (1m)-0.25%
EPS NY rev (3m)2.67%
Revenue NQ rev (1m)-0.05%
Revenue NQ rev (3m)1.03%
Revenue NY rev (1m)-0.15%
Revenue NY rev (3m)0.67%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 45.81 | ||
| Fwd PE | 37.09 | ||
| P/S | 6.72 | ||
| P/FCF | 51.09 | ||
| P/OCF | 38.45 | ||
| P/B | 10.96 | ||
| P/tB | 723.34 | ||
| EV/EBITDA | 27.27 |
EPS(TTM)2.69
EY2.18%
EPS(NY)3.32
Fwd EY2.7%
FCF(TTM)2.41
FCFY1.96%
OCF(TTM)3.2
OCFY2.6%
SpS18.34
BVpS11.24
TBVpS0.17
PEG (NY)1.95
PEG (5Y)9.39
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.96% | ||
| ROE | 25.32% | ||
| ROCE | 18.44% | ||
| ROIC | 14.93% | ||
| ROICexc | 15.94% | ||
| ROICexgc | 34.16% | ||
| OM | 22.26% | ||
| PM (TTM) | 15.52% | ||
| GM | 31.1% | ||
| FCFM | 13.15% |
ROA(3y)7.61%
ROA(5y)5.52%
ROE(3y)19.06%
ROE(5y)14.35%
ROIC(3y)11.81%
ROIC(5y)9.94%
ROICexc(3y)12.73%
ROICexc(5y)10.88%
ROICexgc(3y)28.49%
ROICexgc(5y)24.58%
ROCE(3y)14.58%
ROCE(5y)12.27%
ROICexcg growth 3Y22.26%
ROICexcg growth 5Y20.98%
ROICexc growth 3Y24.64%
ROICexc growth 5Y14.79%
OM growth 3Y9.72%
OM growth 5Y6.18%
PM growth 3Y44.45%
PM growth 5Y18.67%
GM growth 3Y3.97%
GM growth 5Y3.11%
F-Score9
Asset Turnover0.71
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.73 | ||
| Debt/FCF | 3.39 | ||
| Debt/EBITDA | 1.71 | ||
| Cap/Depr | 115.88% | ||
| Cap/Sales | 4.32% | ||
| Interest Coverage | 9.19 | ||
| Cash Conversion | 67.22% | ||
| Profit Quality | 84.74% | ||
| Current Ratio | 2.17 | ||
| Quick Ratio | 0.98 | ||
| Altman-Z | 6.82 |
F-Score9
WACC9.64%
ROIC/WACC1.55
Cap/Depr(3y)89.74%
Cap/Depr(5y)84.39%
Cap/Sales(3y)3.68%
Cap/Sales(5y)4.02%
Profit Quality(3y)96.58%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)45.41%
EPS 3Y38.62%
EPS 5Y4.88%
EPS Q2Q%39.62%
EPS Next Y23.52%
EPS Next 2Y22.11%
EPS Next 3Y20.57%
EPS Next 5Y22.94%
Revenue 1Y (TTM)11.9%
Revenue growth 3Y14.33%
Revenue growth 5Y0.92%
Sales Q2Q%9.24%
Revenue Next Year9.1%
Revenue Next 2Y9.97%
Revenue Next 3Y9.9%
Revenue Next 5Y11.36%
EBIT growth 1Y34.91%
EBIT growth 3Y25.44%
EBIT growth 5Y7.15%
EBIT Next Year34.33%
EBIT Next 3Y21.22%
EBIT Next 5Y19.91%
FCF growth 1Y43.26%
FCF growth 3Y57.51%
FCF growth 5YN/A
OCF growth 1Y44.06%
OCF growth 3Y42.45%
OCF growth 5Y23%