KENNAMETAL INC (KMT) Stock Fundamental Analysis
NYSE:KMT - New York Stock Exchange, Inc. - US4891701009 - Common Stock - Currency: USD
KMT gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 128 industry peers in the Machinery industry. While KMT seems to be doing ok healthwise, there are quite some concerns on its profitability. KMT has a valuation in line with the averages, but it does not seem to be growing. Finally KMT also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year KMT was profitable.
KMT had a positive operating cash flow in the past year.
Of the past 5 years KMT 4 years were profitable.
In the past 5 years KMT always reported a positive cash flow from operatings.
1.2 Ratios
KMT has a Return On Assets (4.37%) which is in line with its industry peers.
KMT has a Return On Equity (8.79%) which is comparable to the rest of the industry.
The Return On Invested Capital of KMT (6.81%) is comparable to the rest of the industry.
KMT had an Average Return On Invested Capital over the past 3 years of 7.41%. This is below the industry average of 10.69%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.37% | ||
| ROE | 8.79% | ||
| ROIC | 6.81% |
ROA(3y)4.88%
ROA(5y)3.3%
ROE(3y)9.86%
ROE(5y)6.64%
ROIC(3y)7.41%
ROIC(5y)6.27%
1.3 Margins
KMT has a Profit Margin of 5.45%. This is comparable to the rest of the industry: KMT outperforms 52.34% of its industry peers.
KMT's Profit Margin has declined in the last couple of years.
KMT's Operating Margin of 9.14% is in line compared to the rest of the industry. KMT outperforms 50.78% of its industry peers.
In the last couple of years the Operating Margin of KMT has declined.
With a Gross Margin value of 31.29%, KMT perfoms like the industry average, outperforming 52.34% of the companies in the same industry.
In the last couple of years the Gross Margin of KMT has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.14% | ||
| PM (TTM) | 5.45% | ||
| GM | 31.29% |
OM growth 3Y4.91%
OM growth 5Y-9.21%
PM growth 3Y21.82%
PM growth 5Y-12.11%
GM growth 3Y0.05%
GM growth 5Y-2.63%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), KMT is destroying value.
Compared to 1 year ago, KMT has less shares outstanding
KMT has less shares outstanding than it did 5 years ago.
KMT has a worse debt/assets ratio than last year.
2.2 Solvency
KMT has an Altman-Z score of 2.90. This is not the best score and indicates that KMT is in the grey zone with still only limited risk for bankruptcy at the moment.
KMT has a Altman-Z score of 2.90. This is comparable to the rest of the industry: KMT outperforms 46.88% of its industry peers.
KMT has a debt to FCF ratio of 3.99. This is a good value and a sign of high solvency as KMT would need 3.99 years to pay back of all of its debts.
With a Debt to FCF ratio value of 3.99, KMT perfoms like the industry average, outperforming 57.81% of the companies in the same industry.
KMT has a Debt/Equity ratio of 0.49. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.49, KMT is in line with its industry, outperforming 45.31% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 3.99 | ||
| Altman-Z | 2.9 |
ROIC/WACC0.72
WACC9.41%
2.3 Liquidity
A Current Ratio of 2.44 indicates that KMT has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.44, KMT is in the better half of the industry, outperforming 63.28% of the companies in the same industry.
A Quick Ratio of 1.10 indicates that KMT should not have too much problems paying its short term obligations.
KMT's Quick ratio of 1.10 is in line compared to the rest of the industry. KMT outperforms 41.41% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.44 | ||
| Quick Ratio | 1.1 |
3. Growth
3.1 Past
KMT shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.74%.
Measured over the past years, KMT shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -13.06% on average per year.
Looking at the last year, KMT shows a decrease in Revenue. The Revenue has decreased by -2.93% in the last year.
Measured over the past years, KMT shows a decrease in Revenue. The Revenue has been decreasing by -2.93% on average per year.
EPS 1Y (TTM)2.74%
EPS 3Y12.98%
EPS 5Y-13.06%
EPS Q2Q%56.67%
Revenue 1Y (TTM)-2.93%
Revenue growth 3Y3.59%
Revenue growth 5Y-2.93%
Sales Q2Q%-5.7%
3.2 Future
The Earnings Per Share is expected to grow by 6.35% on average over the next years.
The Revenue is expected to grow by 1.67% on average over the next years.
EPS Next Y-6.44%
EPS Next 2Y-2.96%
EPS Next 3Y2.9%
EPS Next 5Y6.35%
Revenue Next Year-2.97%
Revenue Next 2Y-0.61%
Revenue Next 3Y0.53%
Revenue Next 5Y1.67%
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.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 16.47 indicates a correct valuation of KMT.
Compared to the rest of the industry, the Price/Earnings ratio of KMT indicates a somewhat cheap valuation: KMT is cheaper than 76.56% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.30. KMT is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 17.49 indicates a rather expensive valuation of KMT.
KMT's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. KMT is cheaper than 66.41% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of KMT to the average of the S&P500 Index (21.76), we can say KMT is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.47 | ||
| Fwd PE | 17.49 |
4.2 Price Multiples
KMT's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. KMT is cheaper than 89.06% of the companies in the same industry.
90.63% of the companies in the same industry are more expensive than KMT, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.34 | ||
| EV/EBITDA | 7.49 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-2.96%
EPS Next 3Y2.9%
5. Dividend
5.1 Amount
KMT has a Yearly Dividend Yield of 3.28%.
KMT's Dividend Yield is rather good when compared to the industry average which is at 1.81. KMT pays more dividend than 92.19% of the companies in the same industry.
KMT's Dividend Yield is a higher than the S&P500 average which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.28% |
5.2 History
The dividend of KMT has a limited annual growth rate of 0.08%.
KMT has been paying a dividend for at least 10 years, so it has a reliable track record.
KMT has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)0.08%
Div Incr Years0
Div Non Decr Years34
5.3 Sustainability
KMT pays out 57.34% of its income as dividend. This is a bit on the high side, but may be sustainable.
KMT's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP57.34%
EPS Next 2Y-2.96%
EPS Next 3Y2.9%
24.7
-0.05 (-0.2%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners108.02%
Inst Owner Change-0.04%
Ins Owners0.69%
Ins Owner Change0.8%
Market Cap1.88B
Analysts47.5
Price Target22.08 (-10.61%)
Short Float %5.21%
Short Ratio3.8
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.28% |
Yearly Dividend0.8
Dividend Growth(5Y)0.08%
DP57.34%
Div Incr Years0
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)45.67%
Min EPS beat(2)-4.1%
Max EPS beat(2)95.43%
EPS beat(4)3
Avg EPS beat(4)28.78%
Min EPS beat(4)-4.1%
Max EPS beat(4)95.43%
EPS beat(8)5
Avg EPS beat(8)15.13%
EPS beat(12)8
Avg EPS beat(12)13.31%
EPS beat(16)11
Avg EPS beat(16)12.87%
Revenue beat(2)0
Avg Revenue beat(2)-1.99%
Min Revenue beat(2)-2.18%
Max Revenue beat(2)-1.8%
Revenue beat(4)1
Avg Revenue beat(4)-1.07%
Min Revenue beat(4)-2.18%
Max Revenue beat(4)1.11%
Revenue beat(8)1
Avg Revenue beat(8)-1.83%
Revenue beat(12)5
Avg Revenue beat(12)-0.98%
Revenue beat(16)5
Avg Revenue beat(16)-1.11%
PT rev (1m)2.71%
PT rev (3m)-4.11%
EPS NQ rev (1m)1.79%
EPS NQ rev (3m)5.43%
EPS NY rev (1m)0%
EPS NY rev (3m)18.98%
Revenue NQ rev (1m)0.29%
Revenue NQ rev (3m)1.44%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.47 | ||
| Fwd PE | 17.49 | ||
| P/S | 0.94 | ||
| P/FCF | 12.34 | ||
| P/OCF | 7.74 | ||
| P/B | 1.52 | ||
| P/tB | 2.11 | ||
| EV/EBITDA | 7.49 |
EPS(TTM)1.5
EY6.07%
EPS(NY)1.41
Fwd EY5.72%
FCF(TTM)2
FCFY8.1%
OCF(TTM)3.19
OCFY12.93%
SpS26.15
BVpS16.23
TBVpS11.68
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.37% | ||
| ROE | 8.79% | ||
| ROCE | 8.78% | ||
| ROIC | 6.81% | ||
| ROICexc | 7.14% | ||
| ROICexgc | 8.64% | ||
| OM | 9.14% | ||
| PM (TTM) | 5.45% | ||
| GM | 31.29% | ||
| FCFM | 7.65% |
ROA(3y)4.88%
ROA(5y)3.3%
ROE(3y)9.86%
ROE(5y)6.64%
ROIC(3y)7.41%
ROIC(5y)6.27%
ROICexc(3y)7.8%
ROICexc(5y)6.83%
ROICexgc(3y)9.53%
ROICexgc(5y)8.39%
ROCE(3y)9.55%
ROCE(5y)8.32%
ROICexcg growth 3Y10.38%
ROICexcg growth 5Y-12.5%
ROICexc growth 3Y10.87%
ROICexc growth 5Y-11.41%
OM growth 3Y4.91%
OM growth 5Y-9.21%
PM growth 3Y21.82%
PM growth 5Y-12.11%
GM growth 3Y0.05%
GM growth 5Y-2.63%
F-Score7
Asset Turnover0.8
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 3.99 | ||
| Debt/EBITDA | 1.91 | ||
| Cap/Depr | 66.6% | ||
| Cap/Sales | 4.56% | ||
| Interest Coverage | 7.34 | ||
| Cash Conversion | 76.38% | ||
| Profit Quality | 140.32% | ||
| Current Ratio | 2.44 | ||
| Quick Ratio | 1.1 | ||
| Altman-Z | 2.9 |
F-Score7
WACC9.41%
ROIC/WACC0.72
Cap/Depr(3y)74.63%
Cap/Depr(5y)105.67%
Cap/Sales(3y)4.87%
Cap/Sales(5y)6.9%
Profit Quality(3y)117.17%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)2.74%
EPS 3Y12.98%
EPS 5Y-13.06%
EPS Q2Q%56.67%
EPS Next Y-6.44%
EPS Next 2Y-2.96%
EPS Next 3Y2.9%
EPS Next 5Y6.35%
Revenue 1Y (TTM)-2.93%
Revenue growth 3Y3.59%
Revenue growth 5Y-2.93%
Sales Q2Q%-5.7%
Revenue Next Year-2.97%
Revenue Next 2Y-0.61%
Revenue Next 3Y0.53%
Revenue Next 5Y1.67%
EBIT growth 1Y0.19%
EBIT growth 3Y8.67%
EBIT growth 5Y-11.87%
EBIT Next Year71.18%
EBIT Next 3Y23.05%
EBIT Next 5YN/A
FCF growth 1Y42.84%
FCF growth 3Y16.08%
FCF growth 5Y13.96%
OCF growth 1Y13.41%
OCF growth 3Y5.54%
OCF growth 5Y-1.61%