AWI  Armstrong World Industries Inc

Exchange

NYSE

Sector

Consumer Non-Durables

Industry

Plastic Products

Market Cap.

2.40B

Vuru Grade

28.21/100

Current Price

$45.30
+0.05 (+0.11%)

Company Metrics

  • P/E 14.71
  • P/S 1.87
  • P/B 8.05
  • EPS 3.08
  • Cash ROIC -0.40%
  • Cash Ratio 0.63
  • Dividend 0.00 / 0.00 %
  • Avg. Vol. 499,541.00
  • Shares 52.98M
  • Market Cap. 2.40B

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 (AWI) Q2 2017 Results - Earnings Call Transcript
Seeking Alpha - Jul 31, 2017
Good day, ladies and gentlemen, and welcome to the Q2 2017 Armstrong World Industries, Inc. Earnings Conference Call.
What You Must Know About Armstrong World Industries Inc's (AWI) Financial Health - Simply Wall St
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.
Traders Take Note: Armstrong World Industries Inc (NYSE:AWI) Stock Drops ...
CML News - 14 hours ago
Take Note: Armstrong World Industries Inc (NYSE:AWI) has hit some technical weakness in its momentum, and while it has not broken down all the way through support -- watch the key levels that we discuss below and further, watch the stochastics and ...
Armstrong World Industries Inc (AWI) Sees Sluggish Weekly Performance - Clayton News
Armstrong World Industries Inc (NYSE:AWI) Releases Quarterly Earnings Results ... - Markets Daily
Mrj Capital Inc Buys Ball Corp, Textron Inc, Armstrong World Industries Inc ...
Nasdaq - Aug 10, 2017
Mrj Capital Inc initiated holdings in Armstrong World Industries Inc. The purchase prices were between $41.35 and $47.55, with an estimated average price of $44.84.
Trading Options During Earnings in Armstrong World Industries Inc
CML News - Aug 17, 2017
We're going to examine buying and selling out of the money strangles in Armstrong World Industries Inc and find out once and for all what the winning trades have been during earnings releases.
Digging Deeper Into the Fundamentals of Armstrong World Industries Inc (AWI)
Nelson Research - 8 hours ago
Fundamentals consist of quantitative and qualitative information that create the foundation of economic health and, followingly, the financial strength of a security, company, or currency.
Armstrong World Industries reports qtrly ‍shr $0.77
Times of India - Jul 31, 2017
Armstrong World Industries Inc qtrly ‍shr $0.77​. * Now expect constant currency sales to be in range of $1.31 to $1.34 billion for 2017.
Analyzing Summit Materials (SUM) & Armstrong World Industries (AWI)
BNB Daily (blog) - Aug 16, 2017
Armstrong World Industries (NYSE: AWI) and Summit Materials (NYSE:SUM) are both mid-cap construction companies, but which is the better business?
Armstrong World (AWI) Catches Eye: Stock Jumps 9.1%
Nasdaq - Aug 1, 2017
Armstrong World Industries, Inc.AWI was a big mover last session, as the company saw its shares rise over 9% on the day.
Vanguard Group Inc. Acquires 165841 Shares of Armstrong World Industries Inc ...
BNB Daily (blog) - Aug 15, 2017
Armstrong World Industries logo Vanguard Group Inc. raised its stake in shares of Armstrong World Industries Inc (NYSE:AWI) by 5.1% during the first quarter, according to its most recent disclosure with the Securities and Exchange Commission (SEC).
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.

$45.30 Current Price

$-1.64 Growth Price (DCF)

Why is this negative?


Show Free Cash Flow numbers

$13.46 Book Price

Overvalued by 70.29%


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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