Kadant Inc
KAI
Special Industry Machinery (No Metalworking Machinery)
Mkt Cap
$3.036BPE
26.46Debt
$132.4MCash
$79.05MEV
$3.09BFCF
$107.4MP/E Ratio
26.46Debt
$132.4MCash
$79.05MEV
$3.09BFCF
$107.4MKadant Inc. supplies technologies and engineered systems worldwide. It operates through three segments: Flow Control, Industrial Processing, and Material Handling. The Flow Control segment develops, manufactures, and markets fluid-handling systems and equipment, such as rotary joints, syphons, turbulator bars, expansion joints, and engineered steam and condensate systems; and doctoring, cleaning, and filtration systems and related consumables, consisting of doctor systems and holders, doctor blades, shower and fabric-conditioning systems, formation systems, and water-filtration systems. The Industrial Processing segment develops, manufactures, and markets ring and rotary debarkers, stranders, chippers, logging machinery, industrial automation and control systems, recycling and approach flow systems, and virgin pulping process equipment for use in the packaging, tissue, wood products, and alternative fuel industries. The Material Handling segment offers conveying and vibratory equipment, and balers and related equipment; and manufactures and sells biodegradable absorbent granules for carriers in as carriers in agricultural, home lawn and garden, professional lawn, turf, and ornamental applications, as well as for oil and grease absorption. The company was formerly known as Thermo Fibertek Inc. and changed its name to Kadant Inc. in July 2001. Kadant Inc. was incorporated in 1991 and is headquartered in Westford, Massachusetts.
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DCF
Discounted Cash Flow Valuation of Kadant Inc
Value
Growth
%
%
Discount
%
%
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 | $107.4M | $125.7M | $145.5M | $166.4M | $188.2M | $210.2M | $232M | $252.9M | $272.4M | $289.6M | $304.1M | $3.041B |
| DCF | $109.3M | $110M | $109.4M | $107.6M | $104.5M | $100.3M | $95.09M | $89.04M | $82.33M | $75.17M | $751.7M | |
| Value | $1.735B | |||||||||||
In the chart Earnings are multiplied by this value.
Earnings Growth 18%
Earnings Stability 88%
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.
| Years | 01-2015 | 01-2016 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 01-2021 | 12-2021 | 12-2022 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|
| Net Margin | 7.1% | 8.8% | 7.7% | 6% | 9.5% | 7.4% | 8.7% | 11% | 13% | 12% |
| ROA | 10% | 12% | 9.7% | 8% | 12% | 9.3% | 8.7% | 10% | 15% | 14% |
| ROE | 11% | 13% | 11% | 9.4% | 16% | 12% | 11% | 15% | 18% | 16% |
What is the average Net Margin?
The average Net Margin over the past 5 years is +9.28%.
What is the trend of Net Margin?
The trend of Net Margin over the past 5 years is +1.18%.
What is the average Return on Assets (ROA)?
The average ROA over the past 5 years is +10.59%.
What is the trend of Return on Assets (ROA)?
The trend of ROA over the past 5 years is +0.8%.
What is the average Return on Equity (ROE)?
The average ROE over the past 5 years is +13.68%.
What is the trend of Return on Equity (ROE)?
The trend of ROE over the past 5 years is +1.16%.
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.
| Years | 01-2015 | 01-2016 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 01-2021 | 12-2021 | 12-2022 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|
| Debt FCF | 0.63 | 1.13 | 1.47 | 5.06 | 3.82 | 3.47 | 2.75 | 1.84 | 2.75 | 1.23 |
| Debt Equity | 0.10 | 0.14 | 0.23 | 0.73 | 0.47 | 0.71 | 0.47 | 0.49 | 0.31 | 0.18 |
| MIN | ||||||||||
| Graham Stability | - | - | 100% | 98% | 100% | 100% | 100% | 100% | 100% | 98% |
What is the Debt/FCF?
The Debt/FCF trailing twelve month is 1.23.
What is the trend of Debt/FCF?
The trend of Debt/FCF over the past 5 years is -0.52.
What is the Graham’s Stability?
Graham’s Stability measure stands at 0.98.
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.
| Years | 01-2016 | 12-2017 | 12-2019 | 12-2021 | Trend |
|---|---|---|---|---|---|
| Revenue | 13% | 12% | 8.7% | 15% | 0.47% |
| Net Income | 20% | 31% | 32% | 44% | 3.3% |
| Stockholders Equity | 14% | 15% | 15% | 16% | 2.1% |
| FCF | 13% | 9.2% | -5.2% | -50% | -0.086% |
What is the 5 year Revenue CAGR?
The Revenue CAGR over the past 5 years is +11.93%.
What is the trend of Revenue growth?
The trend of Revenue growth rate over the past 5 years is +0.47%.
What is the 5 year Earnings CAGR?
The Earnings CAGR over the past 5 years is +31.21%.
What is the trend of Earnings growth?
The trend of Earnings growth rate over the past 5 years is +3.29%.
What is the 5 year Equity CAGR?
The Equity CAGR over the past 5 years is +14.54%.
What is the trend of Equity growth?
The trend of Equity growth rate over the past 5 years is +2.12%.
What is the 5 year FCF CAGR?
The FCF CAGR over the past 5 years is +9.22%.
What is the trend of FCF growth?
The trend of FCF growth rate over the past 5 years is -0.09%.