NYSE:TNC

Stock Analysis Report

Executive Summary

Tennant Company designs, manufactures, and markets floor cleaning equipment worldwide.

Rewards

Trading at 25% below its fair value

Earnings are forecast to grow 24.65% per year

Earnings grew by 89% over the past year

Pays a reliable dividend of 1.12%

Risk Analysis

Has a high level of debt



Snowflake Analysis

Proven track record with adequate balance sheet and pays a dividend.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

0.5%

TNC

3.8%

US Machinery

1.3%

US Market


1 Year Return

44.5%

TNC

25.5%

US Machinery

19.4%

US Market

Return vs Industry: TNC exceeded the US Machinery industry which returned 25.5% over the past year.

Return vs Market: TNC exceeded the US Market which returned 19.4% over the past year.


Shareholder returns

TNCIndustryMarket
7 Day0.5%3.8%1.3%
30 Day0.8%2.6%2.6%
90 Day6.8%8.6%5.0%
1 Year46.4%44.5%27.7%25.5%22.0%19.4%
3 Year11.4%7.3%46.1%36.9%46.8%37.3%
5 Year18.2%10.8%69.3%49.3%66.3%48.0%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

25.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TNC ($78.83) is trading below our estimate of fair value ($105.16)

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


Price To Earnings Ratio

PE vs Industry: TNC is poor value based on its PE Ratio (33.5x) compared to the Machinery industry average (22.4x).

PE vs Market: TNC is poor value based on its PE Ratio (33.5x) compared to the US market (18.7x).


Price to Earnings Growth Ratio

PEG Ratio: TNC is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: TNC is overvalued based on its PB Ratio (4.3x) compared to the US Machinery industry average (2.5x).


Next Steps

Future Growth

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

24.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TNC's forecast earnings growth (24.7% per year) is above the savings rate (1.7%).

Earnings vs Market: TNC's earnings (24.7% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: TNC's revenue (4.9% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: TNC's revenue (4.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TNC's Return on Equity is forecast to be low in 3 years time (17%).


Next Steps

Past Performance

How has Tennant performed over the past 5 years?

-13.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TNC has high quality earnings.

Growing Profit Margin: TNC's current net profit margins (3.8%) are higher than last year (2%).


Past Earnings Growth Analysis

Earnings Trend: TNC's earnings have declined by -13.5% per year over the past 5 years.

Accelerating Growth: TNC's earnings growth over the past year (89%) exceeds its 5-year average (-13.5% per year).

Earnings vs Industry: TNC earnings growth over the past year (89%) exceeded the Machinery industry 12.4%.


Return on Equity

High ROE: TNC's Return on Equity (12.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Tennant's financial position?


Financial Position Analysis

Short Term Liabilities: TNC's short term assets ($479.5M) exceed its short term liabilities ($269.9M).

Long Term Liabilities: TNC's short term assets ($479.5M) exceed its long term liabilities ($435.4M).


Debt to Equity History and Analysis

Debt Level: TNC's debt to equity ratio (100.7%) is considered high.

Reducing Debt: TNC's debt to equity ratio has increased from 10.2% to 100.7% over the past 5 years.

Debt Coverage: TNC's debt is well covered by operating cash flow (24.1%).

Interest Coverage: TNC's interest payments on its debt are well covered by EBIT (4.3x coverage).


Balance Sheet

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

Debt Coverage by Assets: TNC's debt is covered by short term assets (assets are 1.4x debt).


Next Steps

Dividend

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

1.12%

Current Dividend Yield


Dividend Yield vs Market

company1.1%marketbottom25%1.4%markettop25%3.7%industryaverage1.9%forecastin3Years1.2%

Current dividend yield vs market & industry

Notable Dividend: TNC's dividend (1.12%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.42%).

High Dividend: TNC's dividend (1.12%) is low compared to the top 25% of dividend payers in the US market (3.68%).


Stability and Growth of Payments

Stable Dividend: TNC's dividends per share have been stable in the past 10 years.

Growing Dividend: TNC's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (37.4%), TNC's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TNC's dividends in 3 years are forecast to be well covered by earnings (25.2% payout ratio).


Next Steps

Management

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

4.2yrs

Average management tenure


CEO

H. Killingstad (63yo)

14yrs

Tenure

US$4,236,191

Compensation

Mr. H. Chris Killingstad serves as the Chief Executive Officer and President of Tennant at Orbio Technologies Group. Mr. Killingstad has been the Chief Executive Officer and President of Tennant Company si ...


CEO Compensation Analysis

Compensation vs Market: H.'s total compensation ($USD4.24M) is about average for companies of similar size in the US market ($USD3.89M).

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


Management Age and Tenure

4.2yrs

Average Tenure

53yo

Average Age

Experienced Management: TNC's management team is considered experienced (4.2 years average tenure).


Board Age and Tenure

10.3yrs

Average Tenure

60yo

Average Age

Experienced Board: TNC's board of directors are seasoned and experienced ( 10.3 years average tenure).


Insider Trading

Insider Buying: TNC insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$40,00406 Dec 19
David Huml
EntityIndividual
Role
Chief Operating Officer
Senior Vice President of EMEA
Shares506
Max PriceUS$79.06
SellUS$29,72218 Nov 19
David Huml
EntityIndividual
Role
Chief Operating Officer
Senior Vice President of EMEA
Shares424
Max PriceUS$70.10

Ownership Breakdown

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


Management Team

  • Karen Durant (59yo)

    VP & Controller

    • Tenure: 12.3yrs
  • David Cox (81yo)

    Executive Officer

    • Tenure: 0yrs
  • H. Killingstad (63yo)

    President

    • Tenure: 14yrs
    • Compensation: US$4.24m
  • Kathryn Lovik

    Global Communications Director

    • Tenure: 15.7yrs
  • Keith Woodward (55yo)

    Senior VP & CFO

    • Tenure: 1yrs
    • Compensation: US$922.36k
  • Rusty Zay (48yo)

    Senior Vice President of the Americas and Research & Development

    • Tenure: 5.4yrs
    • Compensation: US$1.53m
  • Mary Talbott (50yo)

    Senior VP

    • Tenure: 0.9yrs
  • Carol McKnight (51yo)

    Senior VP & Chief Administrative Officer

    • Tenure: 2.9yrs
    • Compensation: US$1.12m
  • Thomas Stueve

    VP of Global Tax & Treasury and Treasurer

    • Tenure: 0yrs
  • David Huml (50yo)

    Senior Vice President of EMEA

    • Tenure: 1.5yrs
    • Compensation: US$1.41m

Board Members

  • Don Mulligan (58yo)

    Independent Director

    • Tenure: 10.9yrs
    • Compensation: US$184.99k
  • H. Killingstad (63yo)

    President

    • Tenure: 14yrs
    • Compensation: US$4.24m
  • Carol Eicher (60yo)

    Independent Director

    • Tenure: 11.3yrs
    • Compensation: US$170.99k
  • Dave Wichmann (56yo)

    Independent Director

    • Tenure: 10.3yrs
    • Compensation: US$175.99k
  • Bill Austen (60yo)

    Independent Director

    • Tenure: 12.8yrs
    • Compensation: US$175.99k
  • Steve Sonnenberg (66yo)

    Lead Director

    • Tenure: 3.3yrs
    • Compensation: US$194.99k
  • David Windley (55yo)

    Independent Director

    • Tenure: 3.8yrs
    • Compensation: US$175.99k
  • Maria Green (66yo)

    Independent Director

    • Tenure: 0.8yrs
  • Azita Arvani (56yo)

    Independent Director

    • Tenure: 7.2yrs
    • Compensation: US$165.99k

Company Information

Tennant Company's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Tennant Company
  • Ticker: TNC
  • Exchange: NYSE
  • Founded: 1870
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Market Cap: US$1.440b
  • Shares outstanding: 18.27m
  • Website: https://www.tennantco.com

Number of Employees


Location

  • Tennant Company
  • 701 North Lilac Drive
  • Minneapolis
  • Minnesota
  • 55422
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TNCNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1980
TN1DB (Deutsche Boerse AG)YesCommon StockDEEURJan 1980

Biography

Tennant Company designs, manufactures, and markets floor cleaning equipment worldwide. The company offers a suite of products, including floor maintenance and outdoor cleaning equipment, detergent-free and ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/12 23:51
End of Day Share Price2019/12/12 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.