INSTEEL INDUSTRIES INC (IIIN) Stock Fundamental Analysis
NYSE:IIIN - New York Stock Exchange, Inc. - US45774W1080 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to IIIN. IIIN was compared to 41 industry peers in the Building Products industry. While IIIN has a great health rating, its profitability is only average at the moment. IIIN is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
IIIN had positive earnings in the past year.
IIIN had a positive operating cash flow in the past year.
Each year in the past 5 years IIIN has been profitable.
In the past 5 years IIIN always reported a positive cash flow from operatings.
1.2 Ratios
IIIN's Return On Assets of 5.34% is on the low side compared to the rest of the industry. IIIN is outperformed by 60.98% of its industry peers.
IIIN has a Return On Equity of 6.60%. This is in the lower half of the industry: IIIN underperforms 65.85% of its industry peers.
IIIN has a worse Return On Invested Capital (5.80%) than 73.17% of its industry peers.
IIIN had an Average Return On Invested Capital over the past 3 years of 13.67%. This is in line with the industry average of 12.62%.
The last Return On Invested Capital (5.80%) for IIIN is well below the 3 year average (13.67%), which needs to be investigated, but indicates that IIIN had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.34% | ||
| ROE | 6.6% | ||
| ROIC | 5.8% |
ROA(3y)12.77%
ROA(5y)12.2%
ROE(3y)15.36%
ROE(5y)15.06%
ROIC(3y)13.67%
ROIC(5y)13.79%
1.3 Margins
Looking at the Profit Margin, with a value of 3.95%, IIIN is doing worse than 65.85% of the companies in the same industry.
In the last couple of years the Profit Margin of IIIN has grown nicely.
The Operating Margin of IIIN (4.85%) is worse than 78.05% of its industry peers.
IIIN's Operating Margin has improved in the last couple of years.
IIIN's Gross Margin of 10.82% is on the low side compared to the rest of the industry. IIIN is outperformed by 97.56% of its industry peers.
In the last couple of years the Gross Margin of IIIN has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.85% | ||
| PM (TTM) | 3.95% | ||
| GM | 10.82% |
OM growth 3Y-36.94%
OM growth 5Y25.24%
PM growth 3Y-31.35%
PM growth 5Y24.31%
GM growth 3Y-23.04%
GM growth 5Y7.26%
2. Health
2.1 Basic Checks
IIIN has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
IIIN has less shares outstanding than it did 1 year ago.
IIIN has more shares outstanding than it did 5 years ago.
There is no outstanding debt for IIIN. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
IIIN has an Altman-Z score of 8.44. This indicates that IIIN is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 8.44, IIIN belongs to the top of the industry, outperforming 92.68% of the companies in the same industry.
There is no outstanding debt for IIIN. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 8.44 |
ROIC/WACC0.57
WACC10.11%
2.3 Liquidity
A Current Ratio of 3.87 indicates that IIIN has no problem at all paying its short term obligations.
The Current ratio of IIIN (3.87) is better than 87.80% of its industry peers.
IIIN has a Quick Ratio of 2.11. This indicates that IIIN is financially healthy and has no problem in meeting its short term obligations.
With an excellent Quick ratio value of 2.11, IIIN belongs to the best of the industry, outperforming 87.80% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.87 | ||
| Quick Ratio | 2.11 |
3. Growth
3.1 Past
IIIN shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -6.45%.
Measured over the past years, IIIN shows a very strong growth in Earnings Per Share. The EPS has been growing by 33.90% on average per year.
The Revenue has decreased by -0.33% in the past year.
The Revenue has been growing slightly by 3.04% on average over the past years.
EPS 1Y (TTM)-6.45%
EPS 3Y-34.48%
EPS 5Y33.9%
EPS Q2Q%48.57%
Revenue 1Y (TTM)-0.33%
Revenue growth 3Y-3.59%
Revenue growth 5Y3.04%
Sales Q2Q%26.11%
3.2 Future
IIIN is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 48.84% yearly.
Based on estimates for the next years, IIIN will show a quite strong growth in Revenue. The Revenue will grow by 10.15% on average per year.
EPS Next Y71.55%
EPS Next 2Y75.22%
EPS Next 3Y48.84%
EPS Next 5YN/A
Revenue Next Year17.25%
Revenue Next 2Y11.85%
Revenue Next 3Y10.15%
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.
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
The Price/Earnings ratio is 33.65, which means the current valuation is very expensive for IIIN.
IIIN's Price/Earnings ratio is a bit more expensive when compared to the industry. IIIN is more expensive than 73.17% of the companies in the same industry.
When comparing the Price/Earnings ratio of IIIN to the average of the S&P500 Index (27.28), we can say IIIN is valued slightly more expensively.
With a Price/Forward Earnings ratio of 12.84, IIIN is valued correctly.
75.61% of the companies in the same industry are more expensive than IIIN, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of IIIN to the average of the S&P500 Index (21.76), we can say IIIN is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.65 | ||
| Fwd PE | 12.84 |
4.2 Price Multiples
IIIN's Enterprise Value to EBITDA ratio is in line with the industry average.
IIIN's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. IIIN is cheaper than 73.17% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.55 | ||
| EV/EBITDA | 16.37 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
IIIN's earnings are expected to grow with 48.84% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.47
PEG (5Y)0.99
EPS Next 2Y75.22%
EPS Next 3Y48.84%
5. Dividend
5.1 Amount
With a yearly dividend of 0.32%, IIIN is not a good candidate for dividend investing.
IIIN's Dividend Yield is comparable with the industry average which is at 1.19.
Compared to an average S&P500 Dividend Yield of 2.42, IIIN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.32% |
5.2 History
On average, the dividend of IIIN grows each year by 85.37%, which is quite nice.
IIIN has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)85.37%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
IIIN pays out 96.53% of its income as dividend. This is not a sustainable payout ratio.
IIIN's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP96.53%
EPS Next 2Y75.22%
EPS Next 3Y48.84%
39.03
+1.06 (+2.79%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners87.04%
Inst Owner Change1.03%
Ins Owners4.73%
Ins Owner Change1.99%
Market Cap757.57M
Analysts43.33
Price Target39.78 (1.92%)
Short Float %2.6%
Short Ratio3.23
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.32% |
Yearly Dividend2.62
Dividend Growth(5Y)85.37%
DP96.53%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)47.88%
Min EPS beat(2)6.95%
Max EPS beat(2)88.82%
EPS beat(4)2
Avg EPS beat(4)12.3%
Min EPS beat(4)-24.1%
Max EPS beat(4)88.82%
EPS beat(8)4
Avg EPS beat(8)0.73%
EPS beat(12)4
Avg EPS beat(12)-9.49%
EPS beat(16)8
Avg EPS beat(16)1.77%
Revenue beat(2)2
Avg Revenue beat(2)6.69%
Min Revenue beat(2)5.11%
Max Revenue beat(2)8.28%
Revenue beat(4)2
Avg Revenue beat(4)-0.64%
Min Revenue beat(4)-9.32%
Max Revenue beat(4)8.28%
Revenue beat(8)2
Avg Revenue beat(8)-5.22%
Revenue beat(12)2
Avg Revenue beat(12)-6.45%
Revenue beat(16)5
Avg Revenue beat(16)-3.34%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)20%
EPS NY rev (1m)0%
EPS NY rev (3m)23.33%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.35%
Revenue NY rev (1m)0%
Revenue NY rev (3m)2.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.65 | ||
| Fwd PE | 12.84 | ||
| P/S | 1.33 | ||
| P/FCF | 18.55 | ||
| P/OCF | 14.95 | ||
| P/B | 2.22 | ||
| P/tB | 2.65 | ||
| EV/EBITDA | 16.37 |
EPS(TTM)1.16
EY2.97%
EPS(NY)3.04
Fwd EY7.79%
FCF(TTM)2.1
FCFY5.39%
OCF(TTM)2.61
OCFY6.69%
SpS29.39
BVpS17.59
TBVpS14.74
PEG (NY)0.47
PEG (5Y)0.99
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.34% | ||
| ROE | 6.6% | ||
| ROCE | 7.53% | ||
| ROIC | 5.8% | ||
| ROICexc | 6.29% | ||
| ROICexgc | 7.51% | ||
| OM | 4.85% | ||
| PM (TTM) | 3.95% | ||
| GM | 10.82% | ||
| FCFM | 7.16% |
ROA(3y)12.77%
ROA(5y)12.2%
ROE(3y)15.36%
ROE(5y)15.06%
ROIC(3y)13.67%
ROIC(5y)13.79%
ROICexc(3y)16.6%
ROICexc(5y)17.63%
ROICexgc(3y)17.46%
ROICexgc(5y)18.79%
ROCE(3y)17.74%
ROCE(5y)17.9%
ROICexcg growth 3Y-42.14%
ROICexcg growth 5Y24.68%
ROICexc growth 3Y-41.77%
ROICexc growth 5Y25.14%
OM growth 3Y-36.94%
OM growth 5Y25.24%
PM growth 3Y-31.35%
PM growth 5Y24.31%
GM growth 3Y-23.04%
GM growth 5Y7.26%
F-Score6
Asset Turnover1.35
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 58.19% | ||
| Cap/Sales | 1.72% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 113.75% | ||
| Profit Quality | 181.17% | ||
| Current Ratio | 3.87 | ||
| Quick Ratio | 2.11 | ||
| Altman-Z | 8.44 |
F-Score6
WACC10.11%
ROIC/WACC0.57
Cap/Depr(3y)154.91%
Cap/Depr(5y)127.01%
Cap/Sales(3y)3.42%
Cap/Sales(5y)2.95%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-6.45%
EPS 3Y-34.48%
EPS 5Y33.9%
EPS Q2Q%48.57%
EPS Next Y71.55%
EPS Next 2Y75.22%
EPS Next 3Y48.84%
EPS Next 5YN/A
Revenue 1Y (TTM)-0.33%
Revenue growth 3Y-3.59%
Revenue growth 5Y3.04%
Sales Q2Q%26.11%
Revenue Next Year17.25%
Revenue Next 2Y11.85%
Revenue Next 3Y10.15%
Revenue Next 5YN/A
EBIT growth 1Y7.9%
EBIT growth 3Y-39.21%
EBIT growth 5Y29.05%
EBIT Next Year143.5%
EBIT Next 3Y56.2%
EBIT Next 5YN/A
FCF growth 1Y-3.9%
FCF growth 3Y-9.33%
FCF growth 5YN/A
OCF growth 1Y-22.3%
OCF growth 3Y-5.92%
OCF growth 5Y54.56%