AWI  Armstrong World Industries Inc

Exchange

NYSE

Sector

Consumer Non-Durables

Industry

Plastic Products

Market Cap.

2.23B

Vuru Grade

27.68/100

Current Price

$40.40
-0.45 (-1.10%)

Growth Price

$17.78
Overvalued by 56.00%

Stability Price

$29.13
Overvalued by 27.90%

Company Metrics

  • P/E 35.59
  • P/S 0.93
  • P/B 8.72
  • EPS 1.13
  • Cash ROIC 0.97%
  • Cash Ratio 0.56
  • Dividend 0.00 / 0.00 %
  • Avg. Vol. 486,619.00
  • Shares 55.20M
  • Market Cap. 2.23B

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

Armstrong World Industries Acquires Tectum, Inc.
Yahoo Finance - Jan 16, 2017
LANCASTER, Pa., January 16, 2017 - Armstrong World Industries, Inc. (AWI) today announced the completion of its previously disclosed acquisition of the business and assets of Tectum, Inc. (Tectum).
Armstrong World completes Tectum Inc. purchase - Central Penn Business Journal
Armstrong World Industries Shares Cross Above 200 DMA
Nasdaq - Feb 15, 2017
In trading on Wednesday, shares of Armstrong World Industries Inc (Symbol: AWI) crossed above their 200 day moving average of $40.95, changing hands as high as $40.98 per share.
The State of New Jersey Common Pension Fund D Decreases Stake in Armstrong ... - DailyQuint
Armstrong World Industries Inc Stock Volatility Hits A Collapsing Low - CML News
Armstrong World Industries Completes Tectum Acquisition
Zacks.com - Jan 17, 2017
The acquisition will help Armstrong World to focus on delivering innovative ceiling solutions to customers. Further, Tectum products will enhance Armstrong World's efficiency in high-abuse spaces such as gymnasiums and auditoriums. Tectum's roof deck ...
Armstrong Flooring splits with Armstrong World Industries
Jackson Sun - Apr 4, 2016
Armstrong Flooring (NYSE: AFI) announced the completion of its separation from Armstrong World Industries, Inc. (NYSE: AWI).
Armstrong World (AWI) Closes Armstrong Flooring Spin-Off - Zacks.com
The Upcoming Split At Armstrong World Industries Will Unlock Tremendous Value
Seeking Alpha - Mar 16, 2016
Armstrong World Industries will continue to hold the Ceiling assets, whereas a new entity, Armstrong Flooring Industries (AFI) will have the flooring subsidiaries.
One becomes two for Armstrong: Flooring company makes its debut
Central Penn Business Journal - Apr 1, 2016
Armstrong World Industries Inc. officially files for separation. Oct. 8, 2015 - Armstrong World Industries Inc. of Manor Township has registered its official desire to spin-off a new public company, Armstrong Flooring Inc. Continue reading ...
Armstrong World Industries (AWI) Victor Grizzle on Q2 2016 Results - Earnings ...
Seeking Alpha - Jul 30, 2016
Good day, ladies and gentlemen and welcome to the Second Quarter 2016 Armstrong World Industries Inc. Earnings Call. At this time, all participants are in a listen-only mode.
Armstrong World Industries (AWI) Victor Grizzle on Q3 2016 Results - Earnings ...
Seeking Alpha - Oct 31, 2016
Good day, ladies and gentlemen, and welcome to the Armstrong World Industries Inc. Q3 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode.
BRIEF-Armstrong World Industries buys Tectum Inc
Reuters - Jan 16, 2017
WASHINGTON, Feb 16 U.S. homebuilding fell in January as the construction of multi-family housing projects dropped, but upward revisions to the prior month's data and a jump in permits to a one-year high suggested the housing recovery remained on track.
A Look At AWI Post-Split
Seeking Alpha - Jun 6, 2016
This article will examine Armstrong World Industries (NYSE:AWI) following the separation of its Flooring business, which trades separately as Armstrong Flooring (NYSE:AFI).
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.

$40.40 Current Price

$17.78 Growth Price (DCF)

Overvalued by 56.00%


Growth Rate Assumed by Market: 46.34%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$29.13 Stability Price (EPV)

Overvalued by 27.90%


Discount Rate: 15.0%

$32.87 Book Price

Overvalued by 18.63%


Poor Cash Return on Invested Capital over the past 5 years

AWI has been unable to consistently generate sufficient returns from 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 only created $0.97 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20112012201320142015
Free Cash Flow 61.60M 21.20M - -14.10M 33.00M
divided by
Invested Capital 2.13B 2.13B 2.37B 2.03B 2.01B
Cash ROIC 2.89% 0.99% - -0.69% 1.64%

Satisfactory Return on Equity over the past 5 years

AWI has generated adequate returns with capital that shareholders have invested. This is sufficient and implies that management performance has been good.

AWI has generated $12.85 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20112012201320142015
Net Income 112.40M 131.30M 94.10M 63.80M 94.20M
divided by
Stockholders' Equity 1.13B 719.10M 673.20M 649.10M 768.80M
Return on Equity 9.95% 18.26% 13.98% 9.83% 12.25%

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
2006200720082009201020112012201320142015
Free Cash Flow 29.80M 472.60M 119.20M 155.10M 97.70M 61.60M 21.20M - -14.10M 33.00M

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
2006200720082009201020112012201320142015
Cash 252.50M 514.30M 355.00M 569.50M 315.80M 480.60M 336.40M 135.20M 185.30M 244.80M
Current Assets 1.37B 1.50B 1.26B 1.33B 1.02B 1.21B 1.02B 884.00M 811.50M 880.80M
Total Assets 4.17B 4.65B 3.35B 3.30B 2.92B 2.99B 2.85B 2.92B 2.61B 2.69B
Current Liabilities 516.60M 497.30M 385.40M 357.30M 382.90M 386.10M 384.70M 410.90M 388.10M 436.30M
Total Liabilities 2.01B 2.21B 1.61B 1.40B 1.83B 1.86B 2.14B 2.24B 1.96B 1.92B
Stockholder' Equity 2.16B 2.44B 1.74B 1.90B 1.09B 1.13B 719.10M 673.20M 649.10M 768.80M
Current Ratio 2.65 3.02 3.27 3.73 2.67 3.13 2.65 2.15 2.09 2.02
TL-to-TA 0.48 0.48 0.48 0.42 0.63 0.62 0.75 0.77 0.75 0.71

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
2006200720082009201020112012201320142015
Retained Earnings 2.20M 147.50M 66.70M 144.40M -35.30M 77.10M 113.10M 207.20M 271.00M 365.20M
Retained Earnings Growth - 6,604.55% -54.78% 116.49% -124.45% 318.41% 46.69% 83.20% 30.79% 34.76%

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 $2.88 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Net Income 2.20M 145.30M 81.00M 77.70M 11.00M 112.40M 131.30M 94.10M 63.80M 94.20M
divided by
Revenue 817.30M 3.55B 3.39B 2.78B 2.77B 2.86B 2.62B 2.72B 2.52B 2.42B
Net Profit Margin 0.27% 4.09% 2.39% 2.79% 0.40% 3.93% 5.01% 3.46% 2.54% 3.89%

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.

$30.56 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
2006200720082009201020112012201320142015
Gross Profit 156.90M 864.40M 761.00M 621.00M 611.80M 2.86B 633.20M 622.70M 583.30M 602.80M
divided by
Revenue 817.30M 3.55B 3.39B 2.78B 2.77B 2.86B 2.62B 2.72B 2.52B 2.42B
Gross Margin 19.20% 24.35% 22.43% 22.34% 22.12% 100.00% 24.18% 22.89% 23.19% 24.91%

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.

404.08% 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
2006200720082009201020112012201320142015
Capital Expenditure 40.30M 102.60M 95.00M 105.10M 92.70M 150.60M 198.80M 213.70M 222.90M 170.70M
divided by
Net Income 2.20M 145.30M 81.00M 77.70M 11.00M 112.40M 131.30M 94.10M 63.80M 94.20M
Capital Expenditure Ratio 1,831.82% 70.61% 117.28% 135.26% 842.73% 133.99% 151.41% 227.10% 349.37% 181.21%

Strong Dividend History over the past 10 years

AWI has consistently distributed a dividend for the past 8 years. This suggests AWI is established and will likely continue to distribute its dividend for the foreseeable future.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Dividend Paid - - 256.40M 1.30M 798.60M 300,000.00 507.10M 1.40M 1.30M 1.20M
divided by
Shares Outstanding 55.30M 56.70M 56.60M 57.00M 58.20M 58.80M 59.50M 58.40M 55.40M 55.90M
Dividend Paid Per Share - - 4.53 0.02 13.72 0.01 8.52 0.02 0.02 0.02
Price at Year End 27.46 26.23 15.54 29.73 42.97 43.87 50.06 57.27 50.94 46.11
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
2006200720082009201020112012201320142015
Shares Outstanding 55.30M 56.70M 56.60M 57.00M 58.20M 58.80M 59.50M 58.40M 55.40M 55.90M
Stock Bought Back - -2.47% 0.18% -0.70% -2.06% -1.02% -1.18% 1.88% 5.42% -0.89%
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