KENNAMETAL INC (KMT) Stock Fundamental Analysis
NYSE:KMT - New York Stock Exchange, Inc. - US4891701009 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to KMT. KMT was compared to 129 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 on the other hand it scores bad on growth. KMT also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
KMT had positive earnings in the past year.
In the past year KMT had a positive cash flow from operations.
KMT had positive earnings in 4 of the past 5 years.
KMT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of KMT (3.95%) is comparable to the rest of the industry.
KMT's Return On Equity of 7.89% is in line compared to the rest of the industry. KMT outperforms 50.40% of its industry peers.
KMT's Return On Invested Capital of 6.61% is in line compared to the rest of the industry. KMT outperforms 49.60% of its industry peers.
The Average Return On Invested Capital over the past 3 years for KMT is below the industry average of 11.00%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.95% | ||
| ROE | 7.89% | ||
| ROIC | 6.61% |
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
With a Profit Margin value of 4.76%, KMT perfoms like the industry average, outperforming 48.80% of the companies in the same industry.
In the last couple of years the Profit Margin of KMT has declined.
KMT has a Operating Margin (8.62%) which is in line with its industry peers.
In the last couple of years the Operating Margin of KMT has declined.
The Gross Margin of KMT (30.68%) is comparable to the rest of the industry.
In the last couple of years the Gross Margin of KMT has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.62% | ||
| PM (TTM) | 4.76% | ||
| GM | 30.68% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so KMT is destroying value.
KMT has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, KMT has less shares outstanding
Compared to 1 year ago, KMT has a worse debt to assets ratio.
2.2 Solvency
KMT has a debt to FCF ratio of 3.06. This is a good value and a sign of high solvency as KMT would need 3.06 years to pay back of all of its debts.
KMT has a better Debt to FCF ratio (3.06) than 66.40% of its industry peers.
A Debt/Equity ratio of 0.49 indicates that KMT is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.49, KMT is in line with its industry, outperforming 44.80% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 3.06 | ||
| Altman-Z | N/A |
ROIC/WACC0.66
WACC10%
2.3 Liquidity
KMT has a Current Ratio of 2.53. This indicates that KMT is financially healthy and has no problem in meeting its short term obligations.
KMT's Current ratio of 2.53 is fine compared to the rest of the industry. KMT outperforms 67.20% of its industry peers.
KMT has a Quick Ratio of 1.13. This is a normal value and indicates that KMT is financially healthy and should not expect problems in meeting its short term obligations.
KMT has a Quick ratio of 1.13. This is comparable to the rest of the industry: KMT outperforms 41.60% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.53 | ||
| Quick Ratio | 1.13 |
3. Growth
3.1 Past
The earnings per share for KMT have decreased strongly by -14.19% in the last year.
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.
KMT shows a decrease in Revenue. In the last year, the revenue decreased by -2.46%.
The Revenue has been decreasing by -2.93% on average over the past years.
EPS 1Y (TTM)-14.19%
EPS 3Y12.98%
EPS 5Y-13.06%
EPS Q2Q%-16.67%
Revenue 1Y (TTM)-2.46%
Revenue growth 3Y3.59%
Revenue growth 5Y-2.93%
Sales Q2Q%-2.68%
3.2 Future
Based on estimates for the next years, KMT will show a small growth in Earnings Per Share. The EPS will grow by 3.59% on average per year.
Based on estimates for the next years, KMT will show a small growth in Revenue. The Revenue will grow by 1.50% on average per year.
EPS Next Y-21.88%
EPS Next 2Y-4.12%
EPS Next 3Y3.59%
EPS Next 5YN/A
Revenue Next Year-0.53%
Revenue Next 2Y0.97%
Revenue Next 3Y1.5%
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.
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
KMT is valuated correctly with a Price/Earnings ratio of 16.72.
Compared to the rest of the industry, the Price/Earnings ratio of KMT indicates a somewhat cheap valuation: KMT is cheaper than 77.60% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of KMT to the average of the S&P500 Index (29.63), we can say KMT is valued slightly cheaper.
A Price/Forward Earnings ratio of 16.13 indicates a correct valuation of KMT.
KMT's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. KMT is cheaper than 78.40% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.68. KMT is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.72 | ||
| Fwd PE | 16.13 |
4.2 Price Multiples
87.20% of the companies in the same industry are more expensive than KMT, based on the Enterprise Value to EBITDA ratio.
95.20% 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 | 8.79 | ||
| EV/EBITDA | 7.18 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-4.12%
EPS Next 3Y3.59%
5. Dividend
5.1 Amount
KMT has a Yearly Dividend Yield of 3.53%. Purely for dividend investing, there may be better candidates out there.
The stock price of KMT dropped by -23.63% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
Compared to an average industry Dividend Yield of 1.65, KMT pays a better dividend. On top of this KMT pays more dividend than 96.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.27, KMT pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.53% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)0.08%
Div Incr Years0
Div Non Decr Years34
5.3 Sustainability
65.21% of the earnings are spent on dividend by KMT. This is not a sustainable payout ratio.
The dividend of KMT is growing, but earnings are growing more, so the dividend growth is sustainable.
DP65.21%
EPS Next 2Y-4.12%
EPS Next 3Y3.59%
22.24
-0.42 (-1.85%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners113.97%
Inst Owner Change-3.72%
Ins Owners0.69%
Ins Owner Change-2.09%
Market Cap1.72B
Analysts47.5
Price Target23.75 (6.79%)
Short Float %6.65%
Short Ratio5.34
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.53% |
Yearly Dividend0.8
Dividend Growth(5Y)0.08%
DP65.21%
Div Incr Years0
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)4.06%
Min EPS beat(2)-4.1%
Max EPS beat(2)12.21%
EPS beat(4)2
Avg EPS beat(4)4.67%
Min EPS beat(4)-4.1%
Max EPS beat(4)12.21%
EPS beat(8)5
Avg EPS beat(8)4.94%
EPS beat(12)8
Avg EPS beat(12)6.15%
EPS beat(16)11
Avg EPS beat(16)10.48%
Revenue beat(2)0
Avg Revenue beat(2)-1.8%
Min Revenue beat(2)-2.18%
Max Revenue beat(2)-1.42%
Revenue beat(4)1
Avg Revenue beat(4)-1%
Min Revenue beat(4)-2.18%
Max Revenue beat(4)1.11%
Revenue beat(8)2
Avg Revenue beat(8)-1.58%
Revenue beat(12)5
Avg Revenue beat(12)-0.89%
Revenue beat(16)6
Avg Revenue beat(16)-0.9%
PT rev (1m)-3.63%
PT rev (3m)4.49%
EPS NQ rev (1m)-36.08%
EPS NQ rev (3m)-40.24%
EPS NY rev (1m)-19.78%
EPS NY rev (3m)-19.57%
Revenue NQ rev (1m)-5.81%
Revenue NQ rev (3m)-8.51%
Revenue NY rev (1m)-0.29%
Revenue NY rev (3m)-0.63%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.72 | ||
| Fwd PE | 16.13 | ||
| P/S | 0.85 | ||
| P/FCF | 8.79 | ||
| P/OCF | 5.94 | ||
| P/B | 1.41 | ||
| P/tB | 1.97 | ||
| EV/EBITDA | 7.18 |
EPS(TTM)1.33
EY5.98%
EPS(NY)1.38
Fwd EY6.2%
FCF(TTM)2.53
FCFY11.37%
OCF(TTM)3.74
OCFY16.84%
SpS26.15
BVpS15.77
TBVpS11.32
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.95% | ||
| ROE | 7.89% | ||
| ROCE | 8.49% | ||
| ROIC | 6.61% | ||
| ROICexc | 7.03% | ||
| ROICexgc | 8.55% | ||
| OM | 8.62% | ||
| PM (TTM) | 4.76% | ||
| GM | 30.68% | ||
| FCFM | 9.67% |
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-Score6
Asset Turnover0.83
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 3.06 | ||
| Debt/EBITDA | 1.93 | ||
| Cap/Depr | 69.16% | ||
| Cap/Sales | 4.65% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 93.37% | ||
| Profit Quality | 203.37% | ||
| Current Ratio | 2.53 | ||
| Quick Ratio | 1.13 | ||
| Altman-Z | N/A |
F-Score6
WACC10%
ROIC/WACC0.66
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)-14.19%
EPS 3Y12.98%
EPS 5Y-13.06%
EPS Q2Q%-16.67%
EPS Next Y-21.88%
EPS Next 2Y-4.12%
EPS Next 3Y3.59%
EPS Next 5YN/A
Revenue 1Y (TTM)-2.46%
Revenue growth 3Y3.59%
Revenue growth 5Y-2.93%
Sales Q2Q%-2.68%
Revenue Next Year-0.53%
Revenue Next 2Y0.97%
Revenue Next 3Y1.5%
Revenue Next 5YN/A
EBIT growth 1Y-9.51%
EBIT growth 3Y8.67%
EBIT growth 5Y-11.87%
EBIT Next Year79.99%
EBIT Next 3Y26.08%
EBIT Next 5YN/A
FCF growth 1Y195.11%
FCF growth 3Y16.08%
FCF growth 5Y13.96%
OCF growth 1Y64.51%
OCF growth 3Y5.54%
OCF growth 5Y-1.61%