INSTEEL INDUSTRIES INC (IIIN) Stock Fundamental Analysis
NYSE:IIIN - New York Stock Exchange, Inc. - US45774W1080 - Common Stock - Currency: USD
IIIN gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 40 industry peers in the Building Products industry. IIIN has an excellent financial health rating, but there are some minor concerns on its profitability. 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.
In the past year IIIN had a positive cash flow from operations.
In the past 5 years IIIN has always been profitable.
IIIN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
IIIN has a Return On Assets of 4.76%. This is in the lower half of the industry: IIIN underperforms 67.50% of its industry peers.
With a Return On Equity value of 5.81%, IIIN is not doing good in the industry: 70.00% of the companies in the same industry are doing better.
Looking at the Return On Invested Capital, with a value of 4.69%, IIIN is doing worse than 75.00% of the companies in the same industry.
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 13.20%.
The 3 year average ROIC (13.67%) for IIIN is well above the current ROIC(4.69%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.76% | ||
| ROE | 5.81% | ||
| ROIC | 4.69% |
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
IIIN's Profit Margin of 3.58% is on the low side compared to the rest of the industry. IIIN is outperformed by 72.50% of its industry peers.
In the last couple of years the Profit Margin of IIIN has grown nicely.
IIIN has a worse Operating Margin (4.05%) than 80.00% of its industry peers.
IIIN's Operating Margin has improved in the last couple of years.
IIIN has a Gross Margin of 9.85%. This is amonst the worse of the industry: IIIN underperforms 92.50% of its industry peers.
In the last couple of years the Gross Margin of IIIN has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.05% | ||
| PM (TTM) | 3.58% | ||
| GM | 9.85% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so IIIN is still creating some value.
Compared to 1 year ago, IIIN has less shares outstanding
The number of shares outstanding for IIIN has been increased compared to 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
An Altman-Z score of 7.50 indicates that IIIN is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 7.50, IIIN belongs to the best of the industry, outperforming 82.50% 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 | 7.5 |
ROIC/WACC0.44
WACC10.58%
2.3 Liquidity
IIIN has a Current Ratio of 4.09. This indicates that IIIN is financially healthy and has no problem in meeting its short term obligations.
With an excellent Current ratio value of 4.09, IIIN belongs to the best of the industry, outperforming 85.00% of the companies in the same industry.
IIIN has a Quick Ratio of 1.99. This is a normal value and indicates that IIIN is financially healthy and should not expect problems in meeting its short term obligations.
IIIN's Quick ratio of 1.99 is fine compared to the rest of the industry. IIIN outperforms 80.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.09 | ||
| Quick Ratio | 1.99 |
3. Growth
3.1 Past
The earnings per share for IIIN have decreased strongly by -13.91% in the last year.
The Earnings Per Share has been growing by 33.90% on average over the past years. This is a very strong growth
The Revenue for IIIN has decreased by -11.06% in the past year. This is quite bad
IIIN shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.04% yearly.
EPS 1Y (TTM)-13.91%
EPS 3Y-34.48%
EPS 5Y33.9%
EPS Q2Q%0%
Revenue 1Y (TTM)-11.06%
Revenue growth 3Y-3.59%
Revenue growth 5Y3.04%
Sales Q2Q%6.57%
3.2 Future
Based on estimates for the next years, IIIN will show a very strong growth in Earnings Per Share. The EPS will grow by 75.22% on average per year.
IIIN is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.50% yearly.
EPS Next Y39.09%
EPS Next 2Y75.22%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year14.56%
Revenue Next 2Y11.5%
Revenue Next 3YN/A
Revenue Next 5YN/A
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
With a Price/Earnings ratio of 29.46, IIIN can be considered very expensive at the moment.
Based on the Price/Earnings ratio, IIIN is valued a bit more expensive than the industry average as 72.50% of the companies are valued more cheaply.
IIIN is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 29.63, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 9.60, the valuation of IIIN can be described as very reasonable.
IIIN's Price/Forward Earnings ratio is rather cheap when compared to the industry. IIIN is cheaper than 87.50% of the companies in the same industry.
IIIN is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.46 | ||
| Fwd PE | 9.6 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as IIIN.
77.50% of the companies in the same industry are more expensive than IIIN, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.37 | ||
| EV/EBITDA | 14.4 |
4.3 Compensation for Growth
IIIN's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as IIIN's earnings are expected to grow with 75.22% in the coming years.
PEG (NY)0.75
PEG (5Y)0.87
EPS Next 2Y75.22%
EPS Next 3YN/A
5. Dividend
5.1 Amount
IIIN has a yearly dividend return of 0.40%, which is pretty low.
Compared to an average industry Dividend Yield of 1.11, IIIN has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.27, IIIN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.4% |
5.2 History
On average, the dividend of IIIN grows each year by 85.37%, which is quite nice.
IIIN has paid a dividend for at least 10 years, which is a reliable track record.
IIIN has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)85.37%
Div Incr Years1
Div Non Decr Years18
5.3 Sustainability
IIIN pays out 113.04% of its income as dividend. This is not a sustainable payout ratio.
The dividend of IIIN is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP113.04%
EPS Next 2Y75.22%
EPS Next 3YN/A
29.17
-0.78 (-2.6%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners85.69%
Inst Owner Change1.28%
Ins Owners4.69%
Ins Owner Change0.63%
Market Cap566.77M
Analysts43.33
Price Target39.78 (36.37%)
Short Float %3.01%
Short Ratio3.15
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.4% |
Yearly Dividend2.62
Dividend Growth(5Y)85.37%
DP113.04%
Div Incr Years1
Div Non Decr Years18
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-8.57%
Min EPS beat(2)-24.1%
Max EPS beat(2)6.95%
EPS beat(4)2
Avg EPS beat(4)-5.83%
Min EPS beat(4)-24.1%
Max EPS beat(4)16.32%
EPS beat(8)3
Avg EPS beat(8)-15.95%
EPS beat(12)4
Avg EPS beat(12)-12.45%
EPS beat(16)8
Avg EPS beat(16)0.06%
Revenue beat(2)1
Avg Revenue beat(2)-0.52%
Min Revenue beat(2)-9.32%
Max Revenue beat(2)8.28%
Revenue beat(4)1
Avg Revenue beat(4)-3.76%
Min Revenue beat(4)-9.32%
Max Revenue beat(4)8.28%
Revenue beat(8)1
Avg Revenue beat(8)-6.94%
Revenue beat(12)2
Avg Revenue beat(12)-6.03%
Revenue beat(16)5
Avg Revenue beat(16)-3.19%
PT rev (1m)0%
PT rev (3m)1.49%
EPS NQ rev (1m)12.5%
EPS NQ rev (3m)-64.94%
EPS NY rev (1m)7.57%
EPS NY rev (3m)7.57%
Revenue NQ rev (1m)10.39%
Revenue NQ rev (3m)3.68%
Revenue NY rev (1m)8.81%
Revenue NY rev (3m)8.81%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.46 | ||
| Fwd PE | 9.6 | ||
| P/S | 1.06 | ||
| P/FCF | 12.37 | ||
| P/OCF | 10.24 | ||
| P/B | 1.71 | ||
| P/tB | 2.04 | ||
| EV/EBITDA | 14.4 |
EPS(TTM)0.99
EY3.39%
EPS(NY)3.04
Fwd EY10.42%
FCF(TTM)2.36
FCFY8.08%
OCF(TTM)2.85
OCFY9.77%
SpS27.65
BVpS17.07
TBVpS14.31
PEG (NY)0.75
PEG (5Y)0.87
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.76% | ||
| ROE | 5.81% | ||
| ROCE | 6.09% | ||
| ROIC | 4.69% | ||
| ROICexc | 5.22% | ||
| ROICexgc | 6.26% | ||
| OM | 4.05% | ||
| PM (TTM) | 3.58% | ||
| GM | 9.85% | ||
| FCFM | 8.53% |
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 Turnover1.33
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 59.18% | ||
| Cap/Sales | 1.78% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 146.01% | ||
| Profit Quality | 237.91% | ||
| Current Ratio | 4.09 | ||
| Quick Ratio | 1.99 | ||
| Altman-Z | 7.5 |
F-Score6
WACC10.58%
ROIC/WACC0.44
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)-13.91%
EPS 3Y-34.48%
EPS 5Y33.9%
EPS Q2Q%0%
EPS Next Y39.09%
EPS Next 2Y75.22%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-11.06%
Revenue growth 3Y-3.59%
Revenue growth 5Y3.04%
Sales Q2Q%6.57%
Revenue Next Year14.56%
Revenue Next 2Y11.5%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-7.72%
EBIT growth 3Y-39.21%
EBIT growth 5Y29.05%
EBIT Next Year107.93%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y2444.89%
FCF growth 3Y-9.33%
FCF growth 5YN/A
OCF growth 1Y120.54%
OCF growth 3Y-5.92%
OCF growth 5Y54.56%