KENNAMETAL INC (KMT) Stock Fundamental Analysis
NYSE:KMT - New York Stock Exchange, Inc. - US4891701009 - Common Stock - Currency: USD
KMT gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 128 industry peers in the Machinery industry. KMT scores quite bad on profitability, while its financial health is fine. Not spectacular, but in line with the averages. KMT is valued correctly, but it does not seem to be growing. 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.
Of the past 5 years KMT 4 years were profitable.
KMT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
KMT has a Return On Assets of 3.95%. This is comparable to the rest of the industry: KMT outperforms 50.00% of its industry peers.
KMT's Return On Equity of 7.89% is in line compared to the rest of the industry. KMT outperforms 46.88% of its industry peers.
The Return On Invested Capital of KMT (6.61%) 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 10.75%.
| 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 48.44% of the companies in the same industry.
KMT's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 8.62%, KMT is in line with its industry, outperforming 49.22% of the companies in the same industry.
KMT's Operating Margin has declined in the last couple of years.
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.
The number of shares outstanding for KMT has been reduced compared to 1 year ago.
The number of shares outstanding for KMT has been reduced compared to 5 years ago.
Compared to 1 year ago, KMT has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.74 indicates that KMT is not a great score, but indicates only limited risk for bankruptcy at the moment.
KMT has a Altman-Z score (2.74) which is comparable to the rest of the industry.
The Debt to FCF ratio of KMT is 3.06, which is a good value as it means it would take KMT, 3.06 years of fcf income to pay off all of its debts.
KMT has a better Debt to FCF ratio (3.06) than 64.06% of its industry peers.
A Debt/Equity ratio of 0.49 indicates that KMT is not too dependend on debt financing.
KMT has a Debt to Equity ratio of 0.49. This is comparable to the rest of the industry: KMT outperforms 47.66% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 3.06 | ||
| Altman-Z | 2.74 |
ROIC/WACC0.69
WACC9.55%
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.
Looking at the Current ratio, with a value of 2.53, KMT is in the better half of the industry, outperforming 65.63% of the companies in the same industry.
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 (1.13) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.53 | ||
| Quick Ratio | 1.13 |
3. Growth
3.1 Past
KMT shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -14.19%.
The earnings per share for KMT have been decreasing by -13.06% on average. This is quite bad
The Revenue has decreased by -2.46% in the past 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)-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 2.19% on average per year.
KMT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 0.47% yearly.
EPS Next Y-22.86%
EPS Next 2Y-5.7%
EPS Next 3Y2.19%
EPS Next 5YN/A
Revenue Next Year-3.06%
Revenue Next 2Y-0.59%
Revenue Next 3Y0.47%
Revenue Next 5YN/A
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
With a Price/Earnings ratio of 14.01, KMT is valued correctly.
KMT's Price/Earnings ratio is a bit cheaper when compared to the industry. KMT is cheaper than 73.44% of the companies in the same industry.
KMT is valuated cheaply when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 13.97, KMT is valued correctly.
Compared to the rest of the industry, the Price/Forward Earnings ratio of KMT indicates a somewhat cheap valuation: KMT is cheaper than 75.78% of the companies listed in the same industry.
KMT is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.32, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.01 | ||
| Fwd PE | 13.97 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, KMT is valued cheaply inside the industry as 87.50% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, KMT is valued cheaper than 92.97% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.37 | ||
| EV/EBITDA | 6.18 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-5.7%
EPS Next 3Y2.19%
5. Dividend
5.1 Amount
KMT has a Yearly Dividend Yield of 4.29%, which is a nice return.
The stock price of KMT dropped by -23.18% 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.
KMT's Dividend Yield is rather good when compared to the industry average which is at 2.12. KMT pays more dividend than 93.75% of the companies in the same industry.
KMT's Dividend Yield is rather good when compared to the S&P500 average which is at 2.51.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.29% |
5.2 History
The dividend of KMT has a limited annual growth rate of 0.08%.
KMT has paid a dividend for at least 10 years, which is 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
KMT pays out 65.21% of its income as dividend. This is not a sustainable payout ratio.
KMT's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP65.21%
EPS Next 2Y-5.7%
EPS Next 3Y2.19%
18.63
-0.19 (-1.01%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners113.97%
Inst Owner Change-0.01%
Ins Owners0.69%
Ins Owner Change-2.01%
Market Cap1.44B
Analysts47.5
Price Target23.02 (23.56%)
Short Float %5.3%
Short Ratio4.01
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.29% |
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)-3.07%
PT rev (3m)-18.13%
EPS NQ rev (1m)-4.12%
EPS NQ rev (3m)-38.38%
EPS NY rev (1m)-1.9%
EPS NY rev (3m)-20.78%
Revenue NQ rev (1m)0.38%
Revenue NQ rev (3m)-5.46%
Revenue NY rev (1m)0.15%
Revenue NY rev (3m)-2.83%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.01 | ||
| Fwd PE | 13.97 | ||
| P/S | 0.71 | ||
| P/FCF | 7.37 | ||
| P/OCF | 4.97 | ||
| P/B | 1.18 | ||
| P/tB | 1.65 | ||
| EV/EBITDA | 6.18 |
EPS(TTM)1.33
EY7.14%
EPS(NY)1.33
Fwd EY7.16%
FCF(TTM)2.53
FCFY13.58%
OCF(TTM)3.74
OCFY20.1%
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 | 6.85 | ||
| Cash Conversion | 93.37% | ||
| Profit Quality | 203.37% | ||
| Current Ratio | 2.53 | ||
| Quick Ratio | 1.13 | ||
| Altman-Z | 2.74 |
F-Score6
WACC9.55%
ROIC/WACC0.69
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-22.86%
EPS Next 2Y-5.7%
EPS Next 3Y2.19%
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-3.06%
Revenue Next 2Y-0.59%
Revenue Next 3Y0.47%
Revenue Next 5YN/A
EBIT growth 1Y-9.51%
EBIT growth 3Y8.67%
EBIT growth 5Y-11.87%
EBIT Next Year62.05%
EBIT Next 3Y23.13%
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%