NasdaqGS:PATK

Stock Analysis Report

Executive Summary

Patrick Industries, Inc. manufactures and distributes building products and materials for the recreational vehicle, marine, manufactured housing, and industrial markets in the United States and Canada.

Rewards

Trading at 23.8% below its fair value

Earnings are forecast to grow 12.84% per year

Risk Analysis

Has a high level of debt

Unstable dividend track record



Snowflake Analysis

Undervalued with mediocre balance sheet.


Similar Companies

Share Price & News

How has Patrick Industries's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PATK has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.4%

PATK

1.4%

US Building

-0.09%

US Market


1 Year Return

40.1%

PATK

36.3%

US Building

23.9%

US Market

Return vs Industry: PATK exceeded the US Building industry which returned 35.5% over the past year.

Return vs Market: PATK exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

PATKIndustryMarket
7 Day-2.4%1.4%-0.09%
30 Day0.7%4.4%3.1%
90 Day17.3%6.7%10.4%
1 Year40.7%40.1%38.4%36.3%26.6%23.9%
3 Year-1.2%-1.6%28.5%22.5%50.9%41.2%
5 Year185.5%184.2%61.4%40.8%78.1%58.5%

Price Volatility Vs. Market

How volatile is Patrick Industries's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Patrick Industries undervalued compared to its fair value and its price relative to the market?

24.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PATK ($55.68) is trading below our estimate of fair value ($73.07)

Significantly Below Fair Value: PATK is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: PATK is good value based on its PE Ratio (13.3x) compared to the Building industry average (23.1x).

PE vs Market: PATK is good value based on its PE Ratio (13.3x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: PATK is good value based on its PEG Ratio (1x)


Price to Book Ratio

PB vs Industry: PATK is overvalued based on its PB Ratio (2.8x) compared to the US Building industry average (2.4x).


Next Steps

Future Growth

How is Patrick Industries forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

13.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PATK's forecast earnings growth (12.8% per year) is above the savings rate (1.7%).

Earnings vs Market: PATK's earnings (12.8% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: PATK's earnings are forecast to grow, but not significantly.

Revenue vs Market: PATK's revenue (3.8% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: PATK's revenue (3.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PATK's Return on Equity is forecast to be low in 3 years time (17.2%).


Next Steps

Past Performance

How has Patrick Industries performed over the past 5 years?

28.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PATK has high quality earnings.

Growing Profit Margin: PATK's current net profit margins (4.2%) are lower than last year (5.5%).


Past Earnings Growth Analysis

Earnings Trend: PATK's earnings have grown significantly by 28.1% per year over the past 5 years.

Accelerating Growth: PATK's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: PATK had negative earnings growth (-20.7%) over the past year, making it difficult to compare to the Building industry average (-5.5%).


Return on Equity

High ROE: Whilst PATK's Return on Equity (20.12%) is high, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Patrick Industries's financial position?


Financial Position Analysis

Short Term Liabilities: PATK's short term assets ($528.0M) exceed its short term liabilities ($202.3M).

Long Term Liabilities: PATK's short term assets ($528.0M) do not cover its long term liabilities ($768.9M).


Debt to Equity History and Analysis

Debt Level: PATK's debt to equity ratio (142.3%) is considered high.

Reducing Debt: PATK's debt to equity ratio has increased from 105.3% to 142.3% over the past 5 years.

Debt Coverage: PATK's debt is well covered by operating cash flow (28.5%).

Interest Coverage: PATK's interest payments on its debt are well covered by EBIT (4.5x coverage).


Balance Sheet

Inventory Level: PATK has a high level of physical assets or inventory.

Debt Coverage by Assets: PATK's debt is not covered by short term assets (assets are 0.8x debt).


Next Steps

Dividend

What is Patrick Industries's current dividend yield, its reliability and sustainability?

1.83%

Current Dividend Yield


Dividend Yield vs Market

company1.8%marketbottom25%1.4%markettop25%3.7%industryaverage1.7%forecastin3Years1.8%

Current dividend yield vs market & industry

Notable Dividend: PATK's dividend (1.8%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: PATK's dividend (1.8%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: Too early to tell whether PATK's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if PATK's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of Patrick Industries's salary, the management and board of directors tenure and is there insider trading?

3.7yrs

Average management tenure


CEO

Todd Cleveland (51yo)

10.9yrs

Tenure

US$6,859,806

Compensation

Mr. Todd M. Cleveland serves as the Executive Chairman of Patrick Industries Inc. since January 1, 2020. He had been the Chairman of Patrick Industries Inc. since May 16, 2018 until January 1, 2020 and had ...


CEO Compensation Analysis

Compensation vs Market: Todd's total compensation ($USD6.86M) is above average for companies of similar size in the US market ($USD3.86M).

Compensation vs Earnings: Todd's compensation has been consistent with company performance over the past year.


Management Age and Tenure

3.7yrs

Average Tenure

49.5yo

Average Age

Experienced Management: PATK's management team is considered experienced (3.7 years average tenure).


Board Age and Tenure

1.7yrs

Average Tenure

53yo

Average Age

Experienced Board: PATK's board of directors are not considered experienced ( 1.7 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: PATK insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$101,50019 Dec 19
Todd Cleveland
EntityIndividual
Role
Chief Executive Officer
Executive Chairman
Shares2,000
Max PriceUS$50.75
SellUS$127,46617 Dec 19
Michael Kitson
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,500
Max PriceUS$50.99
SellUS$2,111,33313 Dec 19
Tontine Capital Management LLC
EntityCompany
Shares40,000
Max PriceUS$52.86
SellUS$1,250,64410 Dec 19
Tontine Capital Management LLC
EntityCompany
Shares24,009
Max PriceUS$52.10
SellUS$1,568,48307 Nov 19
Tontine Capital Management LLC
EntityCompany
Shares30,000
Max PriceUS$52.29
SellUS$1,030,20206 Nov 19
Todd Cleveland
EntityIndividual
Role
Chief Executive Officer
Executive Chairman
Shares20,000
Max PriceUS$51.51
SellUS$384,43206 Nov 19
Courtney Blosser
EntityIndividual
Role
Head of Human Resources
Executive VP of Human Resources & Chief Human Resources Officer
Shares7,500
Max PriceUS$51.26
BuyUS$390,00020 Aug 19
M. Welch
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares10,000
Max PriceUS$39.00
SellUS$2,102,27118 Jun 19
Tontine Capital Management LLC
EntityCompany
Shares45,254
Max PriceUS$46.70
SellUS$505,98830 Apr 19
Walter Wells
EntityIndividual
Shares10,000
Max PriceUS$50.60
SellUS$45,34504 Mar 19
Walter Wells
EntityIndividual
Shares1,000
Max PriceUS$45.34

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Andy Nemeth (50yo)

    CEO, President & Director

    • Compensation: US$2.78m
  • Todd Cleveland (51yo)

    Executive Chairman

    • Tenure: 10.9yrs
    • Compensation: US$6.86m
  • Jeff Rodino (49yo)

    Executive VP of Sales & Chief Sales Officer

    • Tenure: 3.3yrs
    • Compensation: US$1.80m
  • Courtney Blosser (53yo)

    Executive VP of Human Resources & Chief Human Resources Officer

    • Tenure: 3.7yrs
    • Compensation: US$1.10m
  • Julie Kotowski

    Director of Financial Reporting & Investor Relations

    • Josh Boone (40yo)

      VP of Finance

      • Tenure: 4yrs
      • Compensation: US$1.29m
    • Kip Ellis (45yo)

      Executive VP of Operations & COO

      • Tenure: 3.3yrs
      • Compensation: US$1.91m

    Board Members

    • M. Welch (59yo)

      Lead Independent Director

      • Tenure: 1.7yrs
      • Compensation: US$164.53k
    • Andy Nemeth (50yo)

      CEO, President & Director

      • Compensation: US$2.78m
    • Denis Suggs (53yo)

      Independent Director

      • Tenure: 0.8yrs
    • Todd Cleveland (51yo)

      Executive Chairman

      • Tenure: 10.9yrs
      • Compensation: US$6.86m
    • Joe Cerulli (60yo)

      Independent Director

      • Tenure: 11.5yrs
      • Compensation: US$162.53k
    • John Forbes (59yo)

      Independent Director

      • Tenure: 8.4yrs
      • Compensation: US$166.53k
    • Derrick Mayes (45yo)

      Independent Director

      • Tenure: 0.8yrs
    • Michael Kitson (61yo)

      Independent Director

      • Tenure: 6.8yrs
      • Compensation: US$169.53k
    • Pam Klyn (48yo)

      Independent Director

      • Tenure: 0.8yrs

    Company Information

    Patrick Industries, Inc.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Patrick Industries, Inc.
    • Ticker: PATK
    • Exchange: NasdaqGS
    • Founded: 1959
    • Industry: Building Products
    • Sector: Capital Goods
    • Market Cap: US$1.298b
    • Shares outstanding: 23.76m
    • Website: https://www.patrickind.com

    Number of Employees


    Location

    • Patrick Industries, Inc.
    • 107 West Franklin Street
    • PO Box 638
    • Elkhart
    • Indiana
    • 46515
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    PATKNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDDec 1971
    PATK *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNDec 1971

    Biography

    Patrick Industries, Inc. manufactures and distributes building products and materials for the recreational vehicle, marine, manufactured housing, and industrial markets in the United States and Canada. Its Manufacturing segment manufactures and sells furniture, shelving, walls, countertops, and cabinet products; cabinet doors, fiberglass bath fixtures, and tile systems; hardwood furniture, vinyl printing, solid surface, granite, and quartz countertop fabrication products; RV paintings; fabricated aluminum products; decorative vinyl and paper laminated panels; fiberglass and plastic components; softwoods lumber; custom cabinets; polymer-based flooring products; and electrical systems and components, including instrument and dash panels, and other products. This segment also provides wrapped vinyl, paper, and hardwood profile moldings; interior passage doors; slide-out trim and fascia products; thermoformed shower surrounds; specialty bath and closet building products; fiberglass and plastic helm systems and components; wiring and wire harnesses; aluminum fuel tanks; boat covers, towers, tops, and frames; CNC molds and composite parts; and slotwall panels and components. The company’s Distribution segment distributes pre-finished wall and ceiling panels, drywall and drywall finishing products, electronics, audio systems components, appliances, wiring products, electrical and plumbing products, cement siding products, raw and processed lumber, fiber reinforced polyester products, interior passage doors, roofing products, laminate and ceramic flooring products, shower doors, furniture, fireplaces and surrounds, interior and exterior lighting products, and other products. This segment also offers transportation and logistics services. Patrick Industries, Inc. offers its products through a network of manufacturing and distribution centers. The company was founded in 1959 and is based in Elkhart, Indiana. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/23 23:50
    End of Day Share Price2020/01/23 00:00
    Earnings2019/09/29
    Annual Earnings2018/12/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.