Overall KEYS gets a fundamental rating of 6 out of 10. We evaluated KEYS against 123 industry peers in the Electronic Equipment, Instruments & Components industry. KEYS scores excellent points on both the profitability and health parts. This is a solid base for a good stock. KEYS has a decent growth rate and is not valued too expensively. These ratings would make KEYS suitable for quality investing!

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

KEYS had positive earnings in the past year.
In the past year KEYS had a positive cash flow from operations.
In the past 5 years KEYS has always been profitable.
KEYS had a positive operating cash flow in each of the past 5 years.

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.
KEYS has a better Return On Equity (14.45%) than 81.30% of its industry peers.
KEYS's Return On Invested Capital of 7.01% is fine compared to the rest of the industry. KEYS outperforms 70.73% of its industry peers.
KEYS had an Average Return On Invested Capital over the past 3 years of 10.18%. This 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

Looking at the Profit Margin, with a value of 15.81%, KEYS belongs to the top of the industry, outperforming 94.31% of the companies in the same industry.
KEYS's Profit Margin has been stable in the last couple of years.
Looking at the Operating Margin, with a value of 16.30%, KEYS belongs to the top of the industry, outperforming 91.06% of the companies in the same industry.
In the last couple of years the Operating Margin of KEYS has remained more or less at the same level.
With an excellent Gross Margin value of 62.08%, KEYS belongs to the best of the industry, outperforming 95.12% of the companies in the same industry.
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

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), KEYS 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.
The Debt to FCF ratio of KEYS is 1.98, which is an excellent value as it means it would take KEYS, only 1.98 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of KEYS (1.98) is better than 77.24% of its industry peers.
A Debt/Equity ratio of 0.43 indicates that KEYS is not too dependend on debt financing.
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

A Current Ratio of 2.35 indicates that KEYS has no problem at all paying its short term obligations.
KEYS has a Current ratio of 2.35. This is comparable to the rest of the industry: KEYS outperforms 50.41% of 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.
With a Quick ratio value of 1.78, KEYS perfoms like the industry average, outperforming 55.28% of the companies in the same industry.

		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

KEYS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 14.22%, which is quite good.
The Earnings Per Share has been growing by 8.07% on average over the past years. This is quite good.
Looking at the last year, KEYS shows a small growth in Revenue. The Revenue has grown by 7.95% in the last year.
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.
The Revenue is expected to grow by 8.41% on average over the next years. This is quite good.

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

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.
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.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 29.78 indicates a quite expensive valuation of KEYS.
Based on the Price/Earnings ratio, KEYS is valued a bit cheaper than 64.23% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.21, KEYS is valued at the same level.
KEYS is valuated quite expensively with a Price/Forward Earnings ratio of 25.78.
Based on the Price/Forward Earnings ratio, KEYS is valued a bit cheaper than the industry average as 62.60% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of KEYS to the average of the S&P500 Index (25.98), we can say KEYS is valued inline with the index average.

		Industry Rank	Sector Rank
PE	29.78
Fwd PE	25.78

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of KEYS is on the same level as its industry peers.
KEYS's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. KEYS is cheaper than 70.73% of the companies in the same industry.

		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.
The excellent profitability rating of KEYS may justify a higher PE ratio.
KEYS's earnings are expected to grow with 13.50% in the coming years. This may justify a more expensive valuation.