NasdaqGS:WIRE

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

Encore Wire Corporation manufactures and sells electrical building wires and cables for interior electrical wiring in the United States. More Details

Rewards

PE ratio (17.4x) is below the US market (19.2x)

Earnings are forecast to grow 8.79% per year

Risk Analysis

No risks detected for WIRE from our risk checks.


Snowflake Analysis

Flawless balance sheet and fair value.


Similar Companies

Share Price & News

How has Encore Wire's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

1.2%

WIRE

-0.8%

US Electrical

-0.4%

US Market


1 Year Return

-19.8%

WIRE

27.2%

US Electrical

18.3%

US Market

Return vs Industry: WIRE underperformed the US Electrical industry which returned 27.2% over the past year.

Return vs Market: WIRE underperformed the US Market which returned 18.3% over the past year.


Shareholder returns

WIREIndustryMarket
7 Day1.2%-0.8%-0.4%
30 Day5.2%11.6%8.0%
90 Day-2.8%18.7%9.4%
1 Year-19.7%-19.8%29.8%27.2%21.0%18.3%
3 Year9.1%8.6%40.3%32.3%42.1%32.7%
5 Year14.5%13.5%94.4%76.7%85.6%64.7%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Encore Wire undervalued compared to its fair value and its price relative to the market?

17.42x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: WIRE ($48.54) is trading above our estimate of fair value ($0.97)

Significantly Below Fair Value: WIRE is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: WIRE is good value based on its PE Ratio (17.4x) compared to the US Electrical industry average (25.6x).

PE vs Market: WIRE is good value based on its PE Ratio (17.4x) compared to the US market (19.2x).


Price to Earnings Growth Ratio

PEG Ratio: WIRE is poor value based on its PEG Ratio (2x)


Price to Book Ratio

PB vs Industry: WIRE is good value based on its PB Ratio (1.3x) compared to the US Electrical industry average (3.9x).


Next Steps

Future Growth

How is Encore Wire forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

8.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WIRE's forecast earnings growth (8.8% per year) is above the savings rate (2.2%).

Earnings vs Market: WIRE's earnings (8.8% per year) are forecast to grow slower than the US market (22.1% per year).

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

Revenue vs Market: WIRE's revenue (4.3% per year) is forecast to grow slower than the US market (9.9% per year).

High Growth Revenue: WIRE's revenue (4.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if WIRE's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Encore Wire performed over the past 5 years?

13.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WIRE has high quality earnings.

Growing Profit Margin: WIRE's current net profit margins (4.9%) are lower than last year (6.1%).


Past Earnings Growth Analysis

Earnings Trend: WIRE's earnings have grown by 13.8% per year over the past 5 years.

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

Earnings vs Industry: WIRE had negative earnings growth (-27.5%) over the past year, making it difficult to compare to the Electrical industry average (-24.7%).


Return on Equity

High ROE: WIRE's Return on Equity (7.3%) is considered low.


Next Steps

Financial Health

How is Encore Wire's financial position?


Financial Position Analysis

Short Term Liabilities: WIRE's short term assets ($533.9M) exceed its short term liabilities ($59.9M).

Long Term Liabilities: WIRE's short term assets ($533.9M) exceed its long term liabilities ($32.1M).


Debt to Equity History and Analysis

Debt Level: WIRE is debt free.

Reducing Debt: WIRE has not had any debt for past 5 years.

Debt Coverage: WIRE has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: WIRE has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

What is Encore Wire current dividend yield, its reliability and sustainability?

0.16%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: WIRE's dividend (0.16%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.63%).

High Dividend: WIRE's dividend (0.16%) is low compared to the top 25% of dividend payers in the US market (4.56%).


Stability and Growth of Payments

Stable Dividend: WIRE is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: WIRE is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: WIRE is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of WIRE's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

13.0yrs

Average management tenure


CEO

Daniel Jones (57 yo)

14.67yrs

Tenure

US$2,883,953

Compensation

Mr. Daniel L. Jones has been the Chief Executive Officer and President of Encore Wire Corp. since February 2006. Mr. Jones has been Chairman of Encore Wire Corp. since November 2014. He served as President ...


CEO Compensation Analysis

Compensation vs Market: Daniel's total compensation ($USD2.88M) is about average for companies of similar size in the US market ($USD2.94M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Daniel Jones
Chairman14.67yrsUS$2.88m1.95%
$ 19.5m
Bret Eckert
CFO, Treasurer & Secretary1.08yrsno data0.12%
$ 1.2m
David Smith
Vice President of Operations28.75yrsUS$260.23kno data
William Bigbee
Vice President of Operationsno datano datano data
Kevin Keiffer
Vice President of Sales & Marketingno dataUS$545.92kno data
Matthew Ford
Assistant Secretary & Controller11.42yrsno data0.11%
$ 1.1m

13.0yrs

Average Tenure

57yo

Average Age

Experienced Management: WIRE's management team is seasoned and experienced (13 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Daniel Jones
Chairman14.67yrsUS$2.88m1.95%
$ 19.5m
John Wilson
Lead Independent Director5.92yrsno data0.044%
$ 441.7k
Gregory Fisher
Independent Director8.67yrsno data0.042%
$ 417.4k
Scott Weaver
Independent Director18.42yrsno data0.12%
$ 1.2m
William Thomas
Independent Director13.42yrsno data0.042%
$ 417.4k
Gina Norris
Independent Director0.42yrno data0.0053%
$ 53.4k

7.3yrs

Average Tenure

62yo

Average Age

Experienced Board: WIRE's board of directors are considered experienced (7.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

Encore Wire Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Encore Wire Corporation
  • Ticker: WIRE
  • Exchange: NasdaqGS
  • Founded: 1989
  • Industry: Electrical Components and Equipment
  • Sector: Capital Goods
  • Market Cap: US$1.001b
  • Shares outstanding: 20.63m
  • Website: https://www.encorewire.com

Number of Employees


Location

  • Encore Wire Corporation
  • 1329 Millwood Road
  • McKinney
  • Texas
  • 75069
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WIRENasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJul 1992
EW3DB (Deutsche Boerse AG)YesCommon StockDEEURJul 1992

Biography

Encore Wire Corporation manufactures and sells electrical building wires and cables for interior electrical wiring in the United States. Its products include NM-B cables for use as interior wiring in homes ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/24 00:56
End of Day Share Price2020/10/23 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


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.