Azz Inc

AZZ

Coating, Engraving & Allied Services

Mkt Cap

$2.13B

PE

24.43

Debt

$1.01B

Cash

$4.349M

EV

$3.136B

FCF

$149.3M

Market Cap

$2.13B

P/E Ratio

24.43

Debt

$1.01B

Cash

$4.349M

EV

$3.136B

FCF

$149.3M

Charts data: {"Earnings":[{"time":"2015-02-27","value":64943000},{"time":"2016-02-28","value":76790000},{"time":"2017-02-27","value":60921000},{"time":"2018-02-27","value":45169000},{"time":"2019-02-27","value":51208000},{"time":"2020-02-28","value":48234000},{"time":"2021-02-27","value":39614000},{"time":"2022-02-27","value":84022000},{"time":"2023-02-27","value":-61214000},{"time":"2024-02-28","value":87207000}],"Sales":[{"time":"2015-02-27","value":816687000},{"time":"2016-02-28","value":903192000},{"time":"2017-02-27","value":858930000},{"time":"2018-02-27","value":810430000},{"time":"2019-02-27","value":927087000},{"time":"2020-02-28","value":1061817000},{"time":"2021-02-27","value":838917000},{"time":"2022-02-27","value":902664000},{"time":"2023-02-27","value":1323649000},{"time":"2024-02-28","value":1537589000}],"Net Margins":[{"time":"2015-02-27","value":0.07952006092909523},{"time":"2016-02-28","value":0.08502068220267672},{"time":"2017-02-27","value":0.07092661800146693},{"time":"2018-02-27","value":0.055734610021840256},{"time":"2019-02-27","value":0.055235377046598644},{"time":"2020-02-28","value":0.04542590672404002},{"time":"2021-02-27","value":0.04722040440234254},{"time":"2022-02-27","value":0.09308225430503488},{"time":"2023-02-27","value":-0.046246399158689354},{"time":"2024-02-28","value":0.056716716885981885}],"Assets":[{"time":"2015-02-27","value":936914000},{"time":"2016-02-28","value":983371000},{"time":"2017-02-27","value":977839000},{"time":"2018-02-27","value":1028209000},{"time":"2019-02-27","value":1088570000},{"time":"2020-02-28","value":1073831000},{"time":"2021-02-27","value":996442000},{"time":"2022-02-27","value":1133028000},{"time":"2023-02-27","value":2221479000},{"time":"2024-02-28","value":2195505000}],"Stockholders Equity":[{"time":"2015-02-27","value":420052000},{"time":"2016-02-28","value":481216000},{"time":"2017-02-27","value":529639000},{"time":"2018-02-27","value":565203000},{"time":"2019-02-27","value":603728000},{"time":"2020-02-28","value":634366000},{"time":"2021-02-27","value":623292000},{"time":"2022-02-27","value":667365000},{"time":"2023-02-27","value":853460000},{"time":"2024-02-28","value":700769000}],"ROE":[{"time":"2015-02-27","value":0.15460704865111938},{"time":"2016-02-28","value":0.15957491022742387},{"time":"2017-02-27","value":0.11502362930222283},{"time":"2018-02-27","value":0.07991641941037114},{"time":"2019-02-27","value":0.08481965388386824},{"time":"2020-02-28","value":0.0760349703483478},{"time":"2021-02-27","value":0.06355608607201761},{"time":"2022-02-27","value":0.12590111857828923},{"time":"2023-02-27","value":-0.07172450964309986},{"time":"2024-02-28","value":0.12444471716071916}],"ROA":[{"time":"2015-02-27","value":0.11401793547753583},{"time":"2016-02-28","value":0.12435591450225805},{"time":"2017-02-27","value":0.10173556178471098},{"time":"2018-02-27","value":0.04692431208052059},{"time":"2019-02-27","value":0.0716315900677035},{"time":"2020-02-28","value":0.0738877905368722},{"time":"2021-02-27","value":0.06183400539118183},{"time":"2022-02-27","value":0.10003283237483981},{"time":"2023-02-27","value":0.07816324169618528},{"time":"2024-02-28","value":0.10093349821567248}]}

AZZ Inc. provides hot-dip galvanizing and coil coating solutions in the United States, Canada, Brazil, China, the Netherlands, Poland, Singapore, and India. The company operates through AZZ Metal Coatings and AZZ Precoat Metals segments. The AZZ Metal Coatings segment offers metal finishing solutions for corrosion protection, including hot-dip galvanizing, spin galvanizing, powder coating, anodizing, and plating to steel fabrication and other industries. It serves fabricators or manufacturers that provide services to the electrical and telecommunications, bridge and highway, petrochemical, and general industrial markets, as well as original equipment manufacturers. The AZZ Precoat Metals segment provides aesthetic and corrosion protective coatings and related value-added services for steel and aluminum coil primarily serving the construction; appliance; heating, ventilation, and air conditioning; container; transportation; and other end markets. The company was incorporated in 1956 and is headquartered in Fort Worth, Texas.

Sector

10-Q
8/31/23
10-Q
5/31/23
10-K
2/28/23
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11/30/22
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5/31/22
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2/28/19
10-Q
11/30/18
10-Q
8/31/18
10-Q
5/31/18
10-K
2/28/18

DCF

Discounted Cash Flow Valuation of Azz Inc

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$149.3M	$150.2M	$151.1M	$151.9M	$152.8M	$153.7M	$154.6M	$155.4M	$156.3M	$157.2M	$158.1M	$1.581B
DCF		$130.6M	$114.2M	$99.9M	$87.37M	$76.41M	$66.82M	$58.44M	$51.11M	$44.7M	$39.09M	$390.9M
Value	$1.16B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth -5.7%

Earnings Stability -1.5%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	02-2016	02-2017	02-2018	02-2019	02-2020	02-2021	02-2022	02-2023	02-2024	TTM
Net Margin	8.5%	7.1%	5.6%	5.5%	4.5%	4.7%	9.3%	-4.6%	5.7%	5.7%
ROA	12%	10%	4.7%	7.2%	7.4%	6.2%	10%	7.8%	10%	10%
ROE	16%	12%	8%	8.5%	7.6%	6.4%	13%	-7.2%	12%	12%

What is the average Net Margin?

The average Net Margin over the past 5 years is +4.19%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is -0.63%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +8.11%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +0.56%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +6.72%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -0.52%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	02-2016	02-2017	02-2018	02-2019	02-2020	02-2021	02-2022	02-2023	02-2024	TTM
Debt FCF	3.38	4.14	6.40	2.71	2.99	2.49	3.94	32.80	6.76	6.76
Debt Equity	0.73	0.55	0.56	0.40	0.52	0.29	0.34	1.32	1.44	1.44
MIN
Graham Stability	-	-	67%	84%	92%	82%	100%	-110%	100%	-110%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 6.76.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 3.18.

What is the Graham’s Stability?

Graham’s Stability measure stands at -1.07.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has been increasing in past years.

Years	02-2017	02-2019	02-2021	02-2023	Trend
Revenue	8.7%	11%	22%	16%	2.8%
Net Income	5.3%	11%	30%	-	11%
Stockholders Equity	4.1%	3%	4%	-18%	-1.4%
FCF	11%	11%	28%	340%	19%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +10.65%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +2.8%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +11.24%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +10.97%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +3.03%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -1.4%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +10.89%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +19.24%.