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Kennametal Inc
KMT : NYSE : Industrial Goods
$35.29 | %
Today's Range: 34.73 - 35.35
Avg. Daily Volume: 735,000
12/19/14 - 4:01 PM ET

Financial Analysis


KENNAMETAL INC's gross profit margin for the first quarter of its fiscal year 2015 is essentially unchanged when compared to the same period a year ago. Sales and net income have grown, and although the growth in revenues has outpaced the average competitor within the industry, the net income growth has not. KENNAMETAL INC has average liquidity. Currently, the Quick Ratio is 1.20 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 4.37% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q1 FY15 Q1 FY14
Net Sales ($mil)694.94619.81
EBITDA ($mil)102.8493.02
EBIT ($mil)68.4765.63
Net Income ($mil)39.4937.84


Balance Sheet Q1 FY15 Q1 FY14
Cash & Equiv. ($mil)156.19333.31
Total Assets ($mil)3751.813330.31
Total Debt ($mil)1015.86706.33
Equity ($mil)1922.761842.19


Profitability Q1 FY15 Q1 FY14
Gross Profit Margin35.8636.49
EBITDA Margin14.7915.0
Operating Margin9.8510.59
Sales Turnover0.780.77
Return on Assets4.265.84
Return on Equity8.3210.56
Debt Q1 FY15 Q1 FY14
Current Ratio2.723.52
Debt/Capital0.350.28
Interest Expense8.217.08
Interest Coverage8.349.27


Share Data Q1 FY15 Q1 FY14
Shares outstanding (mil)79.0878.4
Div / share0.180.18
EPS0.490.48
Book value / share24.3123.5
Institutional Own % n/a n/a
Avg Daily Volume694161.0536056.0

Valuation


HOLD. This stock's P/E ratio indicates a discount compared to an average of 18.96 for the Machinery industry and a discount compared to the S&P 500 average of 19.74. To use another comparison, its price-to-book ratio of 1.43 indicates a discount versus the S&P 500 average of 2.73 and a significant discount versus the industry average of 3.36. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, KENNAMETAL INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
KMT 17.43 Peers 18.96   KMT 10.17 Peers 14.15

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

KMT is trading at a valuation on par with its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

KMT is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
KMT 10.89 Peers 17.89   KMT 0.43 Peers 1.03

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

KMT is trading at a significant discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

KMT trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
KMT 1.43 Peers 3.36   KMT -17.70 Peers 62.82

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

KMT is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, KMT is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
KMT 0.95 Peers 1.57   KMT 12.89 Peers 11.06

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

KMT is trading at a significant discount to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

KMT has a sales growth rate that exceeds its peers.

 

 

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