NYSE:OC

Stock Analysis Report

Executive Summary

Owens Corning, together with its subsidiaries, produces and sells glass fiber reinforcements and other materials for composites; and residential, commercial, and industrial building materials worldwide.

Rewards

Trading at 25.2% below its fair value

Earnings are forecast to grow 14.06% per year

Earnings grew by 35.9% over the past year

Risk Analysis

Has a high level of debt

Unstable dividend track record



Snowflake Analysis

Very undervalued with solid track record.


Similar Companies

Share Price & News

How has Owens Corning's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

-1.4%

OC

-0.06%

US Building

0.06%

US Market


1 Year Return

19.7%

OC

23.6%

US Building

19.4%

US Market

Return vs Industry: OC underperformed the US Building industry which returned 23.6% over the past year.

Return vs Market: OC matched the US Market which returned 19.4% over the past year.


Shareholder returns

OCIndustryMarket
7 Day-1.4%-0.06%0.06%
30 Day-4.1%1.6%1.1%
90 Day-5.8%6.0%8.9%
1 Year21.6%19.7%25.5%23.6%21.9%19.4%
3 Year12.8%8.2%26.2%20.4%48.9%39.3%
5 Year68.4%56.6%49.5%30.0%71.9%53.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Owens Corning undervalued compared to its fair value and its price relative to the market?

25.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: OC ($62.99) is trading below our estimate of fair value ($84.25)

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


Price To Earnings Ratio

PE vs Industry: OC is good value based on its PE Ratio (13.7x) compared to the Building industry average (22.3x).

PE vs Market: OC is good value based on its PE Ratio (13.7x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: OC is good value based on its PB Ratio (1.5x) compared to the US Building industry average (2.4x).


Next Steps

Future Growth

How is Owens Corning forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?

14.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: OC's forecast earnings growth (14.1% per year) is above the savings rate (1.7%).

Earnings vs Market: OC's earnings (14.1% per year) are forecast to grow slower than the US market (14.2% per year).

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

Revenue vs Market: OC's revenue (2.8% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: OC's revenue (2.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: OC's Return on Equity is forecast to be low in 3 years time (12.6%).


Next Steps

Past Performance

How has Owens Corning performed over the past 5 years?

14.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: OC has high quality earnings.

Growing Profit Margin: OC's current net profit margins (7%) are higher than last year (5.3%).


Past Earnings Growth Analysis

Earnings Trend: OC's earnings have grown by 14.6% per year over the past 5 years.

Accelerating Growth: OC's earnings growth over the past year (35.9%) exceeds its 5-year average (14.6% per year).

Earnings vs Industry: OC earnings growth over the past year (35.9%) exceeded the Building industry -4.2%.


Return on Equity

High ROE: OC's Return on Equity (11.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Owens Corning's financial position?


Financial Position Analysis

Short Term Liabilities: OC's short term assets ($2.1B) exceed its short term liabilities ($1.3B).

Long Term Liabilities: OC's short term assets ($2.1B) do not cover its long term liabilities ($4.2B).


Debt to Equity History and Analysis

Debt Level: OC's debt to equity ratio (70%) is considered high.

Reducing Debt: OC's debt to equity ratio has increased from 55.1% to 70% over the past 5 years.

Debt Coverage: OC's debt is well covered by operating cash flow (28.2%).

Interest Coverage: OC's interest payments on its debt are well covered by EBIT (6.8x coverage).


Balance Sheet

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

Debt Coverage by Assets: OC's debt is not covered by short term assets (assets are 0.7x debt).


Next Steps

Dividend

What is Owens Corning's current dividend yield, its reliability and sustainability?

1.52%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Owens Corning before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company1.5%marketbottom25%1.4%markettop25%3.7%industryaverage1.7%forecastin3Years1.5%

Current dividend yield vs market & industry

Notable Dividend: OC's dividend (1.52%) is higher than the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: OC's dividend (1.52%) is low compared to the top 25% of dividend payers in the US market (3.7%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, OC has been paying a dividend for less than 10 years.

Growing Dividend: OC's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (19.1%), OC's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: OC's dividends in 3 years are forecast to be well covered by earnings (17.3% payout ratio).


Next Steps

Management

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

5.3yrs

Average management tenure


CEO

Brian Chambers (52yo)

0.8yrs

Tenure

US$2,650,390

Compensation

Mr. Brian D. Chambers has been Chief Executive Officer and Director of Owens Corning since April 18, 2019 and served as its President and Chief Operating Officer since August 1, 2018 until since April 18,  ...


CEO Compensation Analysis

Compensation vs Market: Brian's total compensation ($USD2.65M) is below average for companies of similar size in the US market ($USD6.27M).

Compensation vs Earnings: Brian's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Michael Thaman
Executive Chairman17.8yrsUS$8.74m0.72% $50.2m
Brian Chambers
CEO & Director0.8yrsUS$2.65m0.12% $8.4m
Daniel Smith
Senior Vice President of Growth & Administration5.3yrsUS$2.53m0.072% $5.0m
Prithvi Gandhi
Interim CFO & VP0.3yrsno data0.037% $2.6m
Thierry Denis
Vice President of Investor Relations0yrsno datano data
Ava Harter
Senior VP4.8yrsno data0.039% $2.7m
Raymund Trost
Vice President of CSB Europe and Managing Director of CSB Europe15.9yrsno datano data
Frank O'Brien-Bernini
Chief Sustainability Officer & VP19.1yrsno datano data
William LeBaron
Vice President and President of Owens Corning Construction Services13.4yrsno datano data
Daniel Zhang
Vice President and Managing Director of Asia-Pacific Building Materials Group10.9yrsno datano data

5.3yrs

Average Tenure

55yo

Average Age

Experienced Management: OC's management team is seasoned and experienced (5.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Michael Thaman
Executive Chairman17.8yrsUS$8.74m0.72% $50.2m
Brian Chambers
CEO & Director0.8yrsUS$2.65m0.12% $8.4m
Ralph Hake
Independent Director13.4yrsUS$235.00k0.048% $3.4m
Cesar Conde
Independent Director5.5yrsUS$235.00k0.011% $767.9k
James Ferguson
Independent Director9.1yrsUS$255.00k0.061% $4.2m
John Williams
Lead Independent Director4.8yrsUS$275.00k0.032% $2.2m
Suzanne Nimocks
Independent Director7.4yrsUS$250.00k0.021% $1.4m
Edward Lonergan
Independent Director6.4yrsUS$250.00k0.028% $2.0m
W. Morris
Independent Director13.1yrsUS$235.00k0.035% $2.4m
Maryann Mannen
Independent Director5.5yrsUS$235.00k0.013% $903.3k

6.9yrs

Average Tenure

58.5yo

Average Age

Experienced Board: OC's board of directors are considered experienced (6.9 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: OC insiders have only sold shares 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

Owens Corning's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Owens Corning
  • Ticker: OC
  • Exchange: NYSE
  • Founded: 1938
  • Industry: Building Products
  • Sector: Capital Goods
  • Market Cap: US$6.943b
  • Shares outstanding: 108.79m
  • Website: https://www.owenscorning.com

Number of Employees


Location

  • Owens Corning
  • One Owens Corning Parkway
  • Toledo
  • Ohio
  • 43659
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
OCNYSE (New York Stock Exchange)YesCommon StockUSUSDOct 2006
O5QDB (Deutsche Boerse AG)YesCommon StockDEEUROct 2006

Biography

Owens Corning, together with its subsidiaries, produces and sells glass fiber reinforcements and other materials for composites; and residential, commercial, and industrial building materials worldwide. It operates in three segments: Composites, Insulation, and Roofing. The Composites segment manufactures, fabricates, and sells glass reinforcements in the form of fiber; and manufactures and sells glass fiber products in the form of fabrics, non-wovens, and other specialized products. Its products are used in pipe, roofing shingles, sporting goods, consumer electronics, telecommunications cables, boats, aviation, defense, automotive, industrial containers, and wind-energy applications in the building and construction, transportation, consumer, industrial, and power and energy markets. The Insulation segment manufactures and sells fiberglass insulation into residential, commercial, industrial, and other markets for thermal and acoustical applications; and manufactures and sells glass fiber pipe insulation, flexible duct media, bonded and granulated mineral fiber insulation, cellular glass insulation, and foam insulation used in above- and below-grade construction applications. This segment sells its products primarily to the insulation installers, home centers, lumberyards, retailers, and distributors. The Roofing segment manufactures and sells residential roofing shingles, oxidized asphalt materials, and roofing components used in residential and commercial construction, and specialty applications, as well as synthetic packaging materials. This segment sells its products through distributors, home centers, lumberyards, retailers, and contractors, as well as to roofing contractors for built-up roofing asphalt systems and to manufacturers in automotive, chemical, rubber, and construction industries. Owens Corning was founded in 1938 and is headquartered in Toledo, Ohio. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 00:55
End of Day Share Price2020/02/18 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.