Taking everything into account, KEYS scores 6 out of 10 in our fundamental rating. KEYS was compared to 123 industry peers in the Electronic Equipment, Instruments & Components industry. KEYS gets an excellent profitability rating and is at the same time showing great financial health properties. KEYS has a decent growth rate and is not valued too expensively. This makes KEYS very considerable for quality investing!

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year KEYS was profitable.
KEYS had a positive operating cash flow in the past year.
In the past 5 years KEYS has always been profitable.
In the past 5 years KEYS always reported a positive cash flow from operatings.

1.2 Ratios

Looking at the Return On Assets, with a value of 7.52%, KEYS belongs to the top of the industry, outperforming 86.99% of the companies in the same industry.
With an excellent Return On Equity value of 14.45%, KEYS belongs to the best of the industry, outperforming 81.30% of the companies in the same industry.
KEYS has a better Return On Invested Capital (7.01%) than 70.73% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for KEYS is in line with the industry average of 8.87%.

		Industry Rank	Sector Rank
ROA	7.52%
ROE	14.45%
ROIC	7.01%

ROA(3y)8.77%

ROA(5y)10.34%

ROE(3y)16.4%

ROE(5y)19.97%

ROIC(3y)10.18%

ROIC(5y)11.65%

1.3 Margins

The Profit Margin of KEYS (15.81%) is better than 94.31% of its industry peers.
In the last couple of years the Profit Margin of KEYS has remained more or less at the same level.
KEYS has a better Operating Margin (16.30%) than 91.06% of its industry peers.
KEYS's Operating Margin has been stable in the last couple of years.
KEYS has a better Gross Margin (62.08%) than 95.12% of its industry peers.
In the last couple of years the Gross Margin of KEYS has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	16.3%
PM (TTM)	15.81%
GM	62.08%

OM growth 3Y-12.84%

OM growth 5Y-1.26%

PM growth 3Y-8.64%

PM growth 5Y1.26%

GM growth 3Y-0.83%

GM growth 5Y0.68%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

KEYS has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
KEYS has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, KEYS has less shares outstanding
Compared to 1 year ago, KEYS has a worse debt to assets ratio.

2.2 Solvency

KEYS has an Altman-Z score of 5.91. This indicates that KEYS is financially healthy and has little risk of bankruptcy at the moment.
KEYS's Altman-Z score of 5.91 is fine compared to the rest of the industry. KEYS outperforms 75.61% of its industry peers.
KEYS has a debt to FCF ratio of 1.98. This is a very positive value and a sign of high solvency as it would only need 1.98 years to pay back of all of its debts.
KEYS has a better Debt to FCF ratio (1.98) than 77.24% of its industry peers.
KEYS has a Debt/Equity ratio of 0.43. This is a healthy value indicating a solid balance between debt and equity.
KEYS's Debt to Equity ratio of 0.43 is on the low side compared to the rest of the industry. KEYS is outperformed by 64.23% of its industry peers.
Although KEYS does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.

		Industry Rank	Sector Rank
Debt/Equity	0.43
Debt/FCF	1.98
Altman-Z	5.91

ROIC/WACC0.46

WACC15.1%

2.3 Liquidity

KEYS has a Current Ratio of 2.35. This indicates that KEYS is financially healthy and has no problem in meeting its short term obligations.
KEYS has a Current ratio (2.35) which is in line with its industry peers.
KEYS has a Quick Ratio of 1.78. This is a normal value and indicates that KEYS is financially healthy and should not expect problems in meeting its short term obligations.
KEYS has a Quick ratio (1.78) which is in line with its industry peers.

		Industry Rank	Sector Rank
Current Ratio	2.35
Quick Ratio	1.78

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 14.22% over the past year.
KEYS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.07% yearly.
KEYS shows a small growth in Revenue. In the last year, the Revenue has grown by 7.95%.
KEYS shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.95% yearly.

EPS 1Y (TTM)14.22%

EPS 3Y-2.14%

EPS 5Y8.07%

EPS Q2Q%15.76%

Revenue 1Y (TTM)7.95%

Revenue growth 3Y-0.28%

Revenue growth 5Y4.95%

Sales Q2Q%10.26%

3.2 Future

Based on estimates for the next years, KEYS will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.76% on average per year.
Based on estimates for the next years, KEYS will show a quite strong growth in Revenue. The Revenue will grow by 8.41% on average per year.

EPS Next Y15.53%

EPS Next 2Y15.03%

EPS Next 3Y13.5%

EPS Next 5Y14.76%

Revenue Next Year15.8%

Revenue Next 2Y11.02%

Revenue Next 3Y9.21%

Revenue Next 5Y8.41%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 29.78, KEYS can be considered very expensive at the moment.
Based on the Price/Earnings ratio, KEYS is valued a bit cheaper than 64.23% of the companies in the same industry.
When comparing the Price/Earnings ratio of KEYS to the average of the S&P500 Index (27.21), we can say KEYS is valued inline with the index average.
KEYS is valuated quite expensively with a Price/Forward Earnings ratio of 25.78.
Compared to the rest of the industry, the Price/Forward Earnings ratio of KEYS indicates a somewhat cheap valuation: KEYS is cheaper than 62.60% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 25.98. KEYS is around the same levels.

		Industry Rank	Sector Rank
PE	29.78
Fwd PE	25.78

4.2 Price Multiples

KEYS's Enterprise Value to EBITDA is on the same level as the industry average.
70.73% of the companies in the same industry are more expensive than KEYS, based on the Price/Free Cash Flow ratio.

		Industry Rank	Sector Rank
P/FCF	28.46
EV/EBITDA	32.22

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates KEYS does not grow enough to justify the current Price/Earnings ratio.
KEYS has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as KEYS's earnings are expected to grow with 13.50% in the coming years.