NYSE:AWI

Stock Analysis Report

Armstrong World Industries

Executive Summary

Armstrong World Industries, Inc. designs, manufactures, and sells ceiling systems primarily for use in the construction and renovation of residential and commercial buildings in the United States, Canada, and Latin America.


Snowflake Analysis

Mediocre balance sheet and slightly overvalued.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

3.4%

AWI

2.0%

US Building

2.0%

US Market


1 Year Return

57.1%

AWI

32.8%

US Building

23.6%

US Market

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

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


Shareholder returns

AWIIndustryMarket
7 Day3.4%2.0%2.0%
30 Day8.4%3.1%3.9%
90 Day2.7%6.6%12.0%
1 Year58.4%57.1%34.9%32.8%26.2%23.6%
3 Year158.7%155.9%30.4%24.1%53.2%43.3%
5 Year137.8%103.5%59.2%38.6%75.7%56.3%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

15.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AWI ($101.43) is trading below our estimate of fair value ($120.78)

Significantly Below Fair Value: AWI is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: AWI is good value based on its PE Ratio (21.9x) compared to the Building industry average (23.1x).

PE vs Market: AWI is poor value based on its PE Ratio (21.9x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: AWI is poor value based on its PEG Ratio (2.3x)


Price to Book Ratio

PB vs Industry: AWI is overvalued based on its PB Ratio (13.4x) compared to the US Building industry average (2.4x).


Next Steps

Future Growth

How is Armstrong World Industries forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

9.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AWI's forecast earnings growth (9.5% per year) is above the savings rate (1.7%).

Earnings vs Market: AWI's earnings (9.5% per year) are forecast to grow slower than the US market (14.3% per year).

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

Revenue vs Market: AWI's revenue (5.8% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: AWI's revenue (5.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AWI's Return on Equity is forecast to be very high in 3 years time (50.2%).


Next Steps

Past Performance

How has Armstrong World Industries performed over the past 5 years?

28.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AWI has high quality earnings.

Growing Profit Margin: AWI's current net profit margins (22%) are lower than last year (27%).


Past Earnings Growth Analysis

Earnings Trend: AWI's earnings have grown significantly by 28.5% per year over the past 5 years.

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

Earnings vs Industry: AWI had negative earnings growth (-11.5%) over the past year, making it difficult to compare to the Building industry average (-5.5%).


Return on Equity

High ROE: Whilst AWI's Return on Equity (61.91%) is outstanding, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Armstrong World Industries's financial position?


Financial Position Analysis

Short Term Liabilities: AWI's short term assets ($296.7M) exceed its short term liabilities ($142.2M).

Long Term Liabilities: AWI's short term assets ($296.7M) do not cover its long term liabilities ($1.0B).


Debt to Equity History and Analysis

Debt Level: AWI's debt to equity ratio (182.1%) is considered high.

Reducing Debt: AWI's debt to equity ratio has increased from 136.6% to 182.1% over the past 5 years.

Debt Coverage: AWI's debt is well covered by operating cash flow (24.8%).

Interest Coverage: AWI's interest payments on its debt are well covered by EBIT (6.3x coverage).


Balance Sheet

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

Debt Coverage by Assets: AWI's debt is not covered by short term assets (assets are 0.4x debt).


Next Steps

Dividend

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

0.78%

Current Dividend Yield


Dividend Yield vs Market

company0.8%marketbottom25%1.4%markettop25%3.7%industryaverage1.7%forecastin3Years0.9%

Current dividend yield vs market & industry

Notable Dividend: AWI's dividend (0.79%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: AWI's dividend (0.79%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

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

Growing Dividend: AWI 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: AWI is not paying a notable dividend for the US market.


Future Payout to Shareholders

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


Next Steps

Management

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

5.2yrs

Average management tenure


CEO

Vic Grizzle (57yo)

3.8yrs

Tenure

US$4,730,319

Compensation

Mr. Victor D. Grizzle, also known as Vic, has been Chief Executive Officer and President of Armstrong World Industries, Inc. since March 30, 2016. Mr. Grizzle served as an Executive Vice President and Chie ...


CEO Compensation Analysis

Compensation vs Market: Vic's total compensation ($USD4.73M) is about average for companies of similar size in the US market ($USD6.46M).

Compensation vs Earnings: Vic's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

5.2yrs

Average Tenure

54yo

Average Age

Experienced Management: AWI's management team is seasoned and experienced (5.2 years average tenure).


Board Age and Tenure

3.8yrs

Average Tenure

59.5yo

Average Age

Experienced Board: AWI's board of directors are considered experienced (3.8 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellUS$573,35808 May 19
Ellen Romano
EntityIndividual
Role
Head of Human Resources
Senior Vice President of Human Resources
Shares6,500
Max PriceUS$88.21
SellUS$5,552,50103 May 19
ValueAct Capital Management L.P.
EntityCompany
Shares63,910
Max PriceUS$86.88
SellUS$33,402,00013 Mar 19
ValueAct Capital Management L.P.
EntityCompany
Shares456,000
Max PriceUS$73.25
SellUS$127,115,25001 Mar 19
ValueAct Capital Management L.P.
EntityCompany
Shares1,725,000
Max PriceUS$73.69

Ownership Breakdown

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


Management Team

  • Mark Hershey (49yo)

    Chief Compliance Officer

    • Tenure: 8.5yrs
    • Compensation: US$1.52m
  • Vic Grizzle (57yo)

    President

    • Tenure: 3.8yrs
    • Compensation: US$4.73m
  • Charlie Chiappone (56yo)

    Senior Vice President of Ceilings & Wall Solutions

    • Tenure: 3.8yrs
    • Compensation: US$1.09m
  • Stephen McNamara (52yo)

    VP & Controller

    • Tenure: 11.5yrs
    • Compensation: US$553.54k
  • Ellen Romano (57yo)

    Senior Vice President of Human Resources

    • Tenure: 6.5yrs
    • Compensation: US$854.41k
  • Thomas Waters

    Vice President of Treasury & Investor Relations

    • Brian MacNeal (52yo)

      Senior VP & CFO

      • Tenure: 3.8yrs
      • Compensation: US$1.18m
    • Jennifer Johnson

      Director of Corporate Communications


      Board Members

      • Tao Huang (57yo)

        Independent Director

        • Tenure: 9.5yrs
        • Compensation: US$199.57k
      • John Roberts (74yo)

        Independent Director

        • Tenure: 13.3yrs
        • Compensation: US$218.84k
      • Larry McWilliams (63yo)

        Independent Chairman of the Board

        • Tenure: 2yrs
        • Compensation: US$264.57k
      • Stan Askren (58yo)

        Independent Director

        • Tenure: 11.3yrs
        • Compensation: US$220.04k
      • Roy Templin (59yo)

        Independent Director

        • Tenure: 3.3yrs
        • Compensation: US$205.00k
      • Vic Grizzle (57yo)

        President

        • Tenure: 3.8yrs
        • Compensation: US$4.73m
      • James Melville (67yo)

        Independent Director

        • Tenure: 7.9yrs
        • Compensation: US$207.63k
      • Wayne Shurts (60yo)

        Independent Director

        • Tenure: 0.5yrs
      • Cherryl Thomas (72yo)

        Independent Director

        • Tenure: 3.8yrs
        • Compensation: US$195.98k
      • Barb Loughran (55yo)

        Independent Director

        • Tenure: 0.5yrs

      Company Information

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


      Key Information

      • Name: Armstrong World Industries, Inc.
      • Ticker: AWI
      • Exchange: NYSE
      • Founded: 1891
      • Industry: Building Products
      • Sector: Capital Goods
      • Market Cap: US$4.945b
      • Shares outstanding: 48.50m
      • Website: https://www.armstrongceilings.com

      Number of Employees


      Location

      • Armstrong World Industries, Inc.
      • 2500 Columbia Avenue
      • Lancaster
      • Pennsylvania
      • 17603
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      AWINYSE (New York Stock Exchange)YesCommon StockUSUSDOct 2006
      91ADB (Deutsche Boerse AG)YesCommon StockDEEUROct 2006
      AWII34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REP 1 COM STK USD0.01BRBRLMay 2019

      Biography

      Armstrong World Industries, Inc. designs, manufactures, and sells ceiling systems primarily for use in the construction and renovation of residential and commercial buildings in the United States, Canada, and Latin America. The company operates through Mineral Fiber and Architectural Specialties segments. The company produces suspended mineral fiber, soft fiber, fiberglass wool, and metal ceiling systems; ceiling perimeters and trims, as well as grid products that support drywall ceiling systems; ceilings and walls for use in commercial settings; and acoustical and architectural cast ceilings, walls, facades, columns and moldings, and structural solutions. Armstrong World Industries, Inc. sells its commercial ceiling and architectural specialties products to resale distributors and ceiling system contractors; and residential ceiling products to wholesalers and retailers, such as large home centers. The company was incorporated in 1891 and is headquartered in Lancaster, Pennsylvania. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/18 23:57
      End of Day Share Price2020/01/17 00:00
      Earnings2019/09/30
      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.