| Snowflake Score | |
|---|---|
| Valuation | 2/6 |
| Future Growth | 0/6 |
| Past Performance | 1/6 |
| Financial Health | 6/6 |
| Dividends | 3/6 |
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
| Historical stock prices | |
|---|---|
| Current Share Price | US$73.99 |
| 52 Week High | US$91.68 |
| 52 Week Low | US$59.99 |
| Beta | 0.67 |
| 1 Month Change | 12.31% |
| 3 Month Change | 5.61% |
| 1 Year Change | -19.11% |
| 3 Year Change | -13.71% |
| 5 Year Change | -27.35% |
| Change since IPO | 87.32% |
Recent News & Updates
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%
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
| NPK | US Aerospace & Defense | US Market | |
|---|---|---|---|
| 7D | 0.2% | -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
| NPK volatility | |
|---|---|
| NPK Average Weekly Movement | 3.5% |
| Aerospace & Defense Industry Average Movement | 6.9% |
| Market Average Movement | 7.9% |
| 10% most volatile stocks in US Market | 17.0% |
| 10% least volatile stocks in US Market | 3.2% |
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
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1905 | 895 | Maryjo Cohen | https://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
| NPK fundamental statistics | |
|---|---|
| Market Cap | US$521.91m |
| Earnings (TTM) | US$19.58m |
| Revenue (TTM) | US$335.50m |
26.7x
P/E Ratio1.6x
P/S RatioIs NPK overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| NPK income statement (TTM) | |
|---|---|
| Revenue | US$335.50m |
| Cost of Revenue | US$279.76m |
| Gross Profit | US$55.75m |
| Other Expenses | US$36.17m |
| Earnings | US$19.58m |
Last Reported Earnings
Apr 03, 2022
Next Earnings Date
n/a
| Earnings per share (EPS) | 2.78 |
| Gross Margin | 16.62% |
| Net Profit Margin | 5.83% |
| Debt/Equity Ratio | 0% |
How did NPK perform over the long term?
See historical performance and comparisonDividends
6.1%
Current Dividend Yield36%
Payout RatioValuation
Is NPK undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score
2/6Valuation 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.
| What is NPK's n/a Ratio? | |
|---|---|
| n/a Ratio | 0x |
| n/a | n/a |
| Market Cap | US$521.91m |
| Key Statistics | |
|---|---|
| Enterprise Value/Revenue | 1.2x |
| Enterprise Value/EBITDA | 16.5x |
| PEG Ratio | n/a |
Price to Earnings Ratio vs Peers
How does NPK's PE Ratio compare to its peers?
| NPK PE Ratio vs Peers |
|---|
| Company | PE | Estimated Growth | Market Cap |
|---|---|---|---|
| Peer Average | -82.5x | ||
DCO Ducommun | 4.4x | -34.0% | US$577.8m |
ASLE AerSale | 19.5x | n/a | US$1.0b |
VVX V2X | n/a | 66.2% | US$1.2b |
KAMN Kaman | 29.5x | 22.4% | US$942.5m |
NPK National Presto Industries | 26.7x | n/a | US$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.
| Fair Ratio | |
|---|---|
| Current PE Ratio | 26.7x |
| Fair PE Ratio | n/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
0/6Future 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
1/6Past 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
6/6Financial 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
3/6Dividend 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
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/08/11 00:00 |
| End of Day Share Price | 2022/08/11 00:00 |
| Earnings | 2022/04/03 |
| Annual Earnings | 2021/12/31 |
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.