AWI  Armstrong World Industries Inc

Exchange

NYSE

Sector

Consumer Non-Durables

Industry

Plastic Products

Market Cap.

2.37B

Vuru Grade

28.21/100

Current Price

$44.60
-0.40 (-0.89%)

Company Metrics

  • P/E 17.10
  • P/S 1.90
  • P/B 8.85
  • EPS 2.61
  • Cash ROIC -0.40%
  • Cash Ratio 0.63
  • Dividend 0.00 / 0.00 %
  • Avg. Vol. 500,738.00
  • Shares 53.14M
  • Market Cap. 2.37B

Company Description

Armstrong World Industries, Inc. engages in the design, manufacture, and sale of flooring products and ceiling systems in the Americas, Europe, and the Pacific Rim. The company's Resilient Flooring segment produces vinyl sheet, vinyl tile, and linoleum flooring, as well as sources and sells laminate flooring products, ceramic tile products, adhesives, installation and maintenance materials, and ac... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Parent Companies Armstrong World Industries & Worthington Industries Celebrate ...
PR Newswire (press release) - Jun 21, 2017
Armstrong World Industries, Inc. is a global leader in the design and manufacture of innovative commercial and residential ceiling, wall and suspension system solutions.
Worthington Industries, Inc. (WOR) Analysts See $0.83 EPS - Press Telegraph
GC Impact Winner: Mark A. Hershey, Armstrong World Industries
The Legal Intelligencer - Jun 19, 2017
Armstrong World Industries Inc. designs and manufactures floors and ceilings. Based in Lancaster, Pennsylavania, Armstrong operates 35 plants in the United States, Canada, Australia, China, France, Germany, India and the United Kingdom, with about ...
Armstrong World Industries (AWI) Q1 2017 Results - Earnings Call Transcript
Seeking Alpha - May 1, 2017
Good day, ladies and gentlemen, and welcome to the Armstrong World Industries, Inc. Q1 2017 Earnings Conference Call.
Armstrong World Industries jumps after guidance beats
CNBC - Feb 27, 2017
Shares of Armstrong World Industries soared more than 11 percent after the company gave full-year guidance above analyst expectations.
Risk Malaise Alert in Option Market: Armstrong World Industries Inc Implied ...
CML News - 7 hours ago
Before we dive into any analysis we simply note that Armstrong World Industries Inc (NYSE:AWI) risk is actually priced pretty low by the option market as of right now.
The SunTrust Banks Weighs in on Armstrong World Industries Inc's Q3 2017 ... - BangaloreWeekly
Armstrong World Industries Inc (AWI) Lifted to “Buy” at Zacks Investment Research
The Cerbat Gem - 17 hours ago
Armstrong World Industries Inc logo Zacks Investment Research upgraded shares of Armstrong World Industries Inc (NYSE:AWI) from a hold rating to a buy rating in a report issued on Thursday.
Is Armstrong World Industries Inc (AWI)'s Fuel Running High? The Stock Formed ... - Weekly Register
Armstrong (AWI) Rides on Acquisitions, Headwinds Remain - Zacks.com
Armstrong World Industries to Present at the Deutsche Bank Global Industrials ...
Nasdaq - Jun 6, 2017
LANCASTER, Pa., June 6, 2017 - Armstrong World Industries, Inc. (NYSE:AWI) announced that it is presenting at Deutsche Bank's 8th Annual Global Industrials & Materials Summit on Thursday, June 8, 2017 at 9:20 AM (Central Time), at the Westin Chicago ...
Armstrong World Industries Inc (AWI) Moves Higher on Volume Spike for June 06 - Equities.com
Armstrong World Inds INC New (AWI) Holder Eton Park Capital Management LP ... - Weekly Register
Armstrong World (AWI) Down 9.9% Since Earnings Report: Can It Rebound?
Nasdaq - Jun 1, 2017
A month has gone by since the last earnings report for Armstrong World Industries Inc AWI . Shares have lost about 9.9% in that time frame, underperforming the market.
What Will Happen to Armstrong World Industries Incorporated (NYSE:AWI) Next ... - WeeklyHub
Which insiders are buying Armstrong World Industries, Inc. (NYSE:AWI)? - Post Analyst
General Building Materials Stocks on Investors' Radar -- Forterra, AMN ...
PR Newswire (press release) - Jun 26, 2017
This Monday morning, DailyStockTracker.com looks at the performance of these four General Building Materials stocks: Forterra Inc. (NASDAQ: FRTA), AMN Healthcare Services Inc. (NYSE: AMN), Armstrong World Industries Inc. (NYSE: AWI), and JELD-WEN ...
What To Expect From Armstrong World Industries Inc's (AWI) Earnings In Next 12 ...
Simply Wall St - Jun 10, 2017
Analysts covering Armstrong World Industries Inc (NYSE:AWI) are predicting the earnings to grow 17.4% in years' time. Are you considering investing?
Armstrong World Industries, Inc. (NYSE:AWI): A Detailed Look at its ... - Post Analyst
Armstrong World Industries Inc Institutional Investor Sentiment Improved in ... - Weekly Register
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for AWI to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate AWI's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$44.60 Current Price

$-1.64 Growth Price (DCF)

Why is this negative?


Show Free Cash Flow numbers

$13.46 Book Price

Overvalued by 69.83%


Very Poor Cash Return on Invested Capital over the past 5 years

AWI has failed to generate positive returns on its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

AWI has lost $0.40 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 21.20M - -14.10M 33.00M -54.90M
divided by
Invested Capital 2.13B 2.37B 2.03B 2.01B 1.39B
Cash ROIC 0.99% - -0.69% 1.64% -3.94%

Excellent Return on Equity over the past 5 years

Over the past 5 years, AWI has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

AWI has generated $18.72 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 131.30M 94.10M 63.80M 94.20M 104.70M
divided by
Stockholders' Equity 719.10M 673.20M 649.10M 768.80M 266.40M
Return on Equity 18.26% 13.98% 9.83% 12.25% 39.30%

Good Business Performance over the past 10 years

It's likely AWI has been unable to maintain profitability in tough economic times, making it a somewhat cyclical business. The other possibility is AWI has expended significant capital on items such as property, plant and equipment in specific years. Look for correlations.

AWI has created positive free cash flow for 7 or 8 of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 472.60M 119.20M 155.10M 97.70M 61.60M 21.20M - -14.10M 33.00M -54.90M

Weak Balance Sheet

AWI's financial position is not ideal. The key is to check whether AWI is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 514.30M 355.00M 569.50M 315.80M 480.60M 336.40M 135.20M 185.30M 244.80M 141.90M
Current Assets 1.50B 1.26B 1.33B 1.02B 1.21B 1.02B 884.00M 811.50M 880.80M 406.20M
Total Assets 4.65B 3.35B 3.30B 2.92B 2.99B 2.85B 2.92B 2.61B 2.69B 1.76B
Current Liabilities 497.30M 385.40M 357.30M 382.90M 386.10M 384.70M 410.90M 388.10M 436.30M 224.10M
Total Liabilities 2.21B 1.61B 1.40B 1.83B 1.86B 2.14B 2.24B 1.96B 1.92B 1.49B
Stockholder' Equity 2.44B 1.74B 1.90B 1.09B 1.13B 719.10M 673.20M 649.10M 768.80M 266.40M
Current Ratio 3.02 3.27 3.73 2.67 3.13 2.65 2.15 2.09 2.02 1.81
TL-to-TA 0.48 0.48 0.42 0.63 0.62 0.75 0.77 0.75 0.71 0.85

Consistent Reinvestment of Profits over the past 10 years

AWI has consistently retained profits. This may put AWI in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, AWI can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 147.50M 66.70M 144.40M -35.30M 77.10M 113.10M 207.20M 271.00M 365.20M 469.90M
Retained Earnings Growth - -54.78% 116.49% -124.45% 318.41% 46.69% 83.20% 30.79% 34.76% 28.67%

Highly Competitive Industry over the past 10 years

It's likely that AWI is in an industry with low barriers to entry, spurring high competition. If Gross Margins are at least satisfactory, it's likely AWI invests heavily in R&D and Sales, General & Administrative expenses.

Only $3.70 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 145.30M 81.00M 77.70M 11.00M 112.40M 131.30M 94.10M 63.80M 94.20M 104.70M
divided by
Revenue 3.55B 3.39B 2.78B 2.77B 2.86B 2.62B 2.72B 2.52B 2.42B 1.23B
Net Profit Margin 4.09% 2.39% 2.79% 0.40% 3.93% 5.01% 3.46% 2.54% 3.89% 8.48%

Inconsistent Gross Profit Margins over the past 10 years

AWI has good gross profit margins, however inconsistency of these margins is a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$31.65 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 864.40M 761.00M 621.00M 611.80M 2.86B 633.20M 622.70M 583.30M 602.80M 371.20M
divided by
Revenue 3.55B 3.39B 2.78B 2.77B 2.86B 2.62B 2.72B 2.52B 2.42B 1.23B
Gross Margin 24.35% 22.43% 22.34% 22.12% 100.00% 24.18% 22.89% 23.19% 24.91% 30.07%

High Capital Intensity over the past 10 years

AWI spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

230.85% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 102.60M 95.00M 105.10M 92.70M 150.60M 198.80M 213.70M 222.90M 170.70M 104.20M
divided by
Net Income 145.30M 81.00M 77.70M 11.00M 112.40M 131.30M 94.10M 63.80M 94.20M 104.70M
Capital Expenditure Ratio 70.61% 117.28% 135.26% 842.73% 133.99% 151.41% 227.10% 349.37% 181.21% 99.52%

Inconsistent Dividend History over the past 10 years

AWI has started distributing dividends in the past couple years or has recently suspended their dividend distribution. The reliability of future distributions is unclear.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid - 256.40M 1.30M 798.60M 300,000.00 507.10M 1.40M 1.30M 1.20M -
divided by
Shares Outstanding 56.70M 56.60M 57.00M 58.20M 58.80M 59.50M 58.40M 55.40M 55.90M 55.70M
Dividend Paid Per Share - 4.53 0.02 13.72 0.01 8.52 0.02 0.02 0.02 -
Price at Year End 26.23 15.54 29.73 42.97 43.87 50.06 57.27 50.94 46.11 41.80
Dividend Yield - 29.15% 0.08% 31.93% 0.01% 17.02% 0.04% 0.05% 0.05% -

History of Stock Buybacks over the past 10 years

AWI has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 56.70M 56.60M 57.00M 58.20M 58.80M 59.50M 58.40M 55.40M 55.90M 55.70M
Stock Bought Back - 0.18% -0.70% -2.06% -1.02% -1.18% 1.88% 5.42% -0.89% 0.36%
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