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NPK

National Presto Industries NYSE:NPK Stock Report

Last Price

US$73.99

Market Cap

US$521.9m

7D

0.2%

1Y

-19.1%

Updated

11 Aug, 2022

Data

Company Financials
NPK fundamental analysis
Snowflake Score
Valuation2/6
Future Growth0/6
Past Performance1/6
Financial Health6/6
Dividends3/6

NPK Stock Overview

National Presto Industries Inc. provides housewares and small electric appliance, and defense products primarily in North America.

National Presto Industries Competitors

Price History & Performance

Summary of all time highs, changes and price drops for National Presto Industries
Historical stock prices
Current Share PriceUS$73.99
52 Week HighUS$91.68
52 Week LowUS$59.99
Beta0.67
1 Month Change12.31%
3 Month Change5.61%
1 Year Change-19.11%
3 Year Change-13.71%
5 Year Change-27.35%
Change since IPO87.32%

Recent News & Updates

Jul 19

National Presto Industries Is Prepared For A Successful Turnaround

The coronavirus pandemic has helped sales growth, and an increased backlog in the Defense segment during 2021 anticipates more sales increases in the medium term. Profit margins have been hit hard by current macroeconomic events, but this is a temporary headwind for which the company is prepared. Increased sales in the Defense segment will likely translate into better margins for the company's overall operations. Debt is non-existent and the dividend policy is very flexible, with which the company has a lot of room to maneuver. This represents a buy-and-hold dividend payer at a reasonable price. Investment thesis In January 2021, I wrote an article about National Presto Industries (NPK) where I concluded that the pandemic was going to be a turning point in relation to sales, which had been in continuous decline for a decade, as many families considered updating their home appliances due to mandatory lockdowns, making them buy more of their products. The company also made strong efforts to build the safety products segment, which should ultimately help the company stabilize sales, although the segment still represents a marginal part of the company and is generating losses. Still, the share price seemed too high as the recent increase in the P/S ratio was not being accompanied by increased margins while the cash payout ratio reached levels that made the special dividends paid in recent years unsustainable due to decreasing cash from operations in 2020. Certainly, the coronavirus pandemic crisis helped the company as net sales increased by 14.3% in 2020, although the increase in 2021 was only 0.89% compared to 2020 and the first quarter of 2022 was somewhat disastrous. Nevertheless, the backlog of the defense segment has significantly increased during 2021, which anticipates a significant rise in sales in the next few years. Despite this good news that suggests that the company is recovering some of the ground lost in recent years, profit margins have been seriously affected by current macroeconomic events: supply chain issues, rising raw material, energy, and transport costs, and labor shortages. This has caused a sharp drop in the share price of ~25% since I wrote the last article, but a very flexible dividend policy along with non-existent debt put the company in a very advantageous position to survive these headwinds. Furthermore, the Defense segment, which is poised to grow significantly, traditionally enjoyed much wider margins than the company's overall operations, so margins should improve in the short term. For this reason, I believe that the current macroeconomic events, which I strongly believe are temporary, present an opportunity for investors interested in acquiring shares at a reasonable price, especially long-term dividend investors. In this sense, the price of shares now looks much more reasonable compared to January 2021, so it seems that it is a good time to consider adding this company to relatively conservative dividend portfolios. A brief overview of the company National Presto Industries is a designer, manufacturer, and distributor of small electrical appliances, weapon ammunition, cartridge cases, precision mechanical and electro-mechanical assemblies, detonators, booster pellets, release cartridges, lead azide, and other military energetic devices and materials, as well as innovative safety technology for organizations and individuals. The company was founded in 1905 and insiders own a whopping 28.26% of the company's shares, which means that the management actively participates as shareholders. Currently, the market cap stands at ~$470 million, making it a small-cap company. National Presto Industries products (Gopresto.com/product) The company's operations are divided into three main segments: the Housewares/Small Appliance segment, which provided 33% of consolidated sales in 2021, the Defense segment, which provided 66% of sales in 2021, and the Safety segment, whose sales were marginal in 2021 at 0.1% as the company is still building it through two startup companies: Rusoh, Inc., which manufactures fire extinguishers, and OneEvent Technologies, Inc., which designs systems for early warnings to avoid significant losses. Data by YCharts Currently, shares are trading at $66.11, which represents a 24.39% decline since the last article I wrote and a 52.55% decline from all-time highs of $139.35 on August 21, 2018. This price has broken the psychological barrier created after the coronavirus pandemic crash back in 2020, so I think it is very important to consider the possibility of acquiring shares for the long term at this point, especially considering the company usually pays very juicy special dividends. Net sales keep growing as the backlog increased significantly Net sales have experienced a continuous decline over the last decade, partly as a result of an overly generous distribution of dividends that limited a more active policy of mergers and acquisitions and expansions. Luckily for the company, the coronavirus pandemic crisis represented a turning point as net sales increased by 14.3% year over year in 2020 due to increased demand from people updating their homes and kitchens during mandatory lockdowns. Net sales (10-K filings) In 2021, the increase was marginal at 0.89%, although this meant that the increase in sales experienced in 2020 managed to be sustained during 2021. The problem came during the first quarter of 2022, when the company reported a net sales decline of 25.02% compared to the same quarter of 2021, which suggested the loss of all the ground gained during the pandemic, on top of the current issue of tighter margins. The backlog of the defense segment increased by 43.9% in 2021 to $460.8 million, and these are expected to be translated into sales in an 18 to 36-month period. This increase is much higher than the increase of 3.17% year over year during 2020 for the segment. Net sales in the Housewares/Small Appliance segment declined by 1.5% in 2021 after an increase of 16.62% in 2020, but it was offset by an increase of 2% year over year in the Defense segment. In this sense, the decline in the share price experienced in the last year has caused the PS ratio to plummet as sales are showing serious difficulties to be increased in a sustainable way. The PS ratio currently stands at 1.392, which means the company generates $0.71 in sales for each dollar held in shares, annually. Data by YCharts In this sense, we now have two simultaneous headwinds for National Presto: decreasing net sales in the short term, and tighter profit margins, which means that these limited sales are not being translated into cash from operations as easily as in the past due to increased cost of goods sold. Margins are temporarily depressed and it is not known until when, but we have some clues The company has historically enjoyed very healthy profit margins, but the coronavirus pandemic and the subsequent rise in the cost of raw materials, transportation, and energy, as well as supply chain issues and labor shortages experienced around the world, have taken a toll on the company's ability to convert sales into actual cash. And now, the war between Russia and Ukraine is further complicating the threads that build trade relations around the globe. Data by YCharts Furthermore, the fact that margins for the first quarter of 2022 were lower than the trailing twelve months' suggests that these difficulties are still getting worse as of recently. Continuing in this line, gross profit margins of 15.98% during the first quarter of 2022 are slightly lower than the trailing twelve months' gross profit margins of 16.62%, and EBITDA margins of 6.25% during the quarter are also slightly lower than EBITDA margins of 7.69% during the last twelve months. Still, we should keep in mind that such a drop in margins is relatively justified given that the world is currently facing high rates of inflation, and many consumer-focused companies like National Presto haven't had enough time to pass on the increase in costs to customers as a result of persistent inflation. For this reason, I believe that once inflation eases, the discrepancy between the final price of the company's products and the cost of producing them will widen again. Furthermore, and taking 2021 as a reference, the Defense segment returned gross profit margins of 25.55%, much higher than the 8.60% reported in the Housewares / Small Appliance segment. Therefore, the increase in the backlog in the Defense segment during 2021 could translate into significant improvements in the margins of the company's operations as a whole in the medium term. The company remains debt-free One of the company's strongest points is that it enjoys a negative net debt thanks to the non-existence of debt. Despite all the setbacks that are currently hitting the company's operations, the risk of bankruptcy or serious problems is greatly reduced thanks to the fact that it does not have to face the payment of interest on any debt. Data by YCharts In addition, the company has over $80 million of cash on hand, so it still has reserves to continue facing headwinds while investing in growth initiatives. It is very difficult today to find such established companies with negative net debt, and this maximizes the possibilities of expansion of any company while minimizing its risks in difficult times like the present. The dividend policy is very flexible It is very important to understand the company's dividend policy, which is strongly influenced by the high exposure of the management to the stock, before investing if we intend to have a dividend stream. The company usually pays a fixed dividend of $1 per year plus a special dividend which is variable depending on the results of the company's annual operations. Year 2014 2015 2016 2017 2018 2019 2020 2021 2022 Total dividend (fixed + special) $5.05 $4.05 $5.05 $5.50 $6 $6 $6 $6.25 $4.50 In February 2022, the management announced a special dividend of $3.50 per share in addition to maintaining the regular dividend of $1. This represents a significant reduction compared to recent years, but a necessary move due to the high cash payout ratio experienced during 2019, 2020, and 2021. Year 2014 2015 2016 2017 2018 2019 2020 2021 Cash from operations (in $ millions) $73.21 $46.28 $44.56 $52.96 $39.94 $9.58 $40.97 $34.69 Dividends paid (in $ millions) $34.95 $28.11 $35.16 $38.41 $41.99 $42.09 $42.17 $44.08 Cash payout ratio 47.74% 60.75% 78.90% 72.52% 105.13% 439.18% 102.93% 127.08%

Feb 21

National Presto Industries: Still Appealing Despite Recent Troubles

National Presto Industries has not performed all that well as of late, both from a share price perspective and fundamentally. The company is experiencing some pain on its top and bottom lines that definitely affects the firm's value near term. This has also hurt its distribution, but shares still make sense for the long haul.

Shareholder Returns

NPKUS Aerospace & DefenseUS Market
7D0.2%-0.2%1.2%
1Y-19.1%5.5%-11.6%

Return vs Industry: NPK underperformed the US Aerospace & Defense industry which returned 5.5% over the past year.

Return vs Market: NPK underperformed the US Market which returned -11.6% over the past year.

Price Volatility

Is NPK's price volatile compared to industry and market?
NPK volatility
NPK Average Weekly Movement3.5%
Aerospace & Defense Industry Average Movement6.9%
Market Average Movement7.9%
10% most volatile stocks in US Market17.0%
10% least volatile stocks in US Market3.2%

Stable Share Price: NPK is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: NPK's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1905895Maryjo Cohenhttps://www.gopresto.com

National Presto Industries Inc. provides housewares and small electric appliance, and defense products primarily in North America. It operates through three segments: Housewares/Small Appliance, Defense, and Safety. The company’s Housewares/Small Appliance segment designs, markets, and distributes housewares and small electrical appliances, including pressure cookers and canners; heat control single thermostatic control line of skillets, griddles, woks, and multi-purpose cookers; slow cookers; deep fryers; air fryers; waffle makers; pizza ovens; slicer/shredders; electric heaters; hot air, oil, and microwave corn poppers; dehydrators; rice cookers; microwave bacon cookers; egg cookers; coffeemakers and coffeemaker accessories; electric tea kettles; electric knife sharpeners; various kitchen gadgets; and timers under the Presto Control Master brand.

National Presto Industries Fundamentals Summary

How do National Presto Industries's earnings and revenue compare to its market cap?
NPK fundamental statistics
Market CapUS$521.91m
Earnings (TTM)US$19.58m
Revenue (TTM)US$335.50m

26.7x

P/E Ratio

1.6x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
NPK income statement (TTM)
RevenueUS$335.50m
Cost of RevenueUS$279.76m
Gross ProfitUS$55.75m
Other ExpensesUS$36.17m
EarningsUS$19.58m

Last Reported Earnings

Apr 03, 2022

Next Earnings Date

n/a

Earnings per share (EPS)2.78
Gross Margin16.62%
Net Profit Margin5.83%
Debt/Equity Ratio0%

How did NPK perform over the long term?

See historical performance and comparison

Dividends

6.1%

Current Dividend Yield

36%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is NPK undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for NPK?

Other financial metrics that can be useful for relative valuation.

NPK key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue1.2x
Enterprise Value/EBITDA16.5x
PEG Ration/a

Price to Earnings Ratio vs Peers

How does NPK's PE Ratio compare to its peers?

NPK PE Ratio vs Peers
The above table shows the PE ratio for NPK vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average-82.5x
DCO Ducommun
4.4x-34.0%US$577.8m
ASLE AerSale
19.5xn/aUS$1.0b
VVX V2X
n/a66.2%US$1.2b
KAMN Kaman
29.5x22.4%US$942.5m
NPK National Presto Industries
26.7xn/aUS$521.9m

Price-To-Earnings vs Peers: NPK is expensive based on its Price-To-Earnings Ratio (26.7x) compared to the peer average (-82.5x).


Price to Earnings Ratio vs Industry

How does NPK's PE Ratio compare vs other companies in the US Aerospace & Defense Industry?

Price-To-Earnings vs Industry: NPK is expensive based on its Price-To-Earnings Ratio (26.7x) compared to the US Aerospace & Defense industry average (21.6x)


Price to Earnings Ratio vs Fair Ratio

What is NPK's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

NPK PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio26.7x
Fair PE Ration/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate NPK's Price-To-Earnings Fair Ratio for valuation analysis.


Share Price vs Fair Value

What is the Fair Price of NPK when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: NPK ($73.99) is trading below our estimate of fair value ($101.18)

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


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.


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Future Growth

How is National Presto Industries forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


12.4%

Forecasted Capital Goods industry annual growth in earnings

In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as National Presto Industries has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


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  • Examine National Presto Industries's financial health to determine how well-positioned it is against times of financial stress by looking at its level of debt over time and how much cash it has left.
  • National Presto Industries competitive advantages and company strategy can generally be found in its financial reports archived here.

Past Performance

How has National Presto Industries performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-5.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: NPK has high quality earnings.

Growing Profit Margin: NPK's current net profit margins (5.8%) are lower than last year (13%).


Past Earnings Growth Analysis

Earnings Trend: NPK's earnings have declined by 5.7% per year over the past 5 years.

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

Earnings vs Industry: NPK had negative earnings growth (-59%) over the past year, making it difficult to compare to the Aerospace & Defense industry average (27.7%).


Return on Equity

High ROE: NPK's Return on Equity (5.9%) is considered low.


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Financial Health

How is National Presto Industries's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: NPK's short term assets ($317.4M) exceed its short term liabilities ($49.6M).

Long Term Liabilities: NPK's short term assets ($317.4M) exceed its long term liabilities ($9.5M).


Debt to Equity History and Analysis

Debt Level: NPK is debt free.

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

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

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


Balance Sheet


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Dividend

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

Dividend Score

3/6

Dividend Score 3/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


6.08%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: NPK's dividend (6.08%) is higher than the bottom 25% of dividend payers in the US market (1.5%).

High Dividend: NPK's dividend (6.08%) is in the top 25% of dividend payers in the US market (4.05%)


Stability and Growth of Payments

Stable Dividend: NPK's dividend payments have been volatile in the past 10 years.

Growing Dividend: NPK's dividend payments have fallen over the past 10 years.


Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (36.1%), NPK's dividend payments are well covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (101%), NPK's dividend payments are not well covered by cash flows.


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Management

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

9.3yrs

Average management tenure


CEO

Maryjo Cohen (69 yo)

33.25yrs

Tenure

US$755,905

Compensation

Ms. Maryjo J. Cohen has been the Chief Executive Officer of National Presto Industries Inc. since May 1994 and has been its President since May 1989. Ms. Cohen serves as a Treasurer of Presto Manufacturing...


CEO Compensation Analysis

Compensation vs Market: Maryjo's total compensation ($USD755.91K) is below average for companies of similar size in the US market ($USD2.61M).

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


Leadership Team

Experienced Management: NPK's management team is seasoned and experienced (9.3 years average tenure).


Board Members

Experienced Board: NPK's board of directors are seasoned and experienced ( 21.6 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.


Ownership Breakdown

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


Top Shareholders

Company Information

National Presto Industries, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: National Presto Industries, Inc.
  • Ticker: NPK
  • Exchange: NYSE
  • Founded: 1905
  • Industry: Aerospace and Defense
  • Sector: Capital Goods
  • Implied Market Cap: US$521.905m
  • Shares outstanding: 7.05m
  • Website: https://www.gopresto.com

Number of Employees


Location

  • National Presto Industries, Inc.
  • 3925 North Hastings Way
  • Eau Claire
  • Wisconsin
  • 54703-3703
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/11 00:00
End of Day Share Price2022/08/11 00:00
Earnings2022/04/03
Annual Earnings2021/12/31


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.