Knife River Corp

KNF

Mining & Quarrying of Nonmetallic Minerals (No Fuels)

Mkt Cap

$4.058B

PE

22.98

Debt

$687.7M

Cash

$170.7M

EV

$4.575B

FCF

$246.2M

Market Cap

$4.058B

P/E Ratio

22.98

Debt

$687.7M

Cash

$170.7M

EV

$4.575B

FCF

$246.2M

Charts data: {"Earnings":[{"time":"2021-12-30","value":129755000},{"time":"2022-12-30","value":116220000},{"time":"2023-12-30","value":182872000}],"Sales":[{"time":"2021-12-30","value":2228930000},{"time":"2022-12-30","value":2534729000},{"time":"2023-12-30","value":2830350000}],"Net Margins":[{"time":"2021-12-30","value":0.05821403094758472},{"time":"2022-12-30","value":0.045851055477725625},{"time":"2023-12-30","value":0.06461109050117476}],"Assets":[{"time":"2021-12-30","value":2181824000},{"time":"2022-12-30","value":2294319000},{"time":"2023-12-30","value":2599813000}],"Stockholders Equity":[{"time":"2021-12-30","value":952844000},{"time":"2022-12-30","value":1028589000},{"time":"2023-12-30","value":1266012000}],"ROE":[{"time":"2021-12-30","value":0.13617654096578244},{"time":"2022-12-30","value":0.11298973642533607},{"time":"2023-12-30","value":0.14444728801938686}],"ROA":[{"time":"2021-12-30","value":0.08819776480596052},{"time":"2022-12-30","value":0.08468525954760432},{"time":"2023-12-30","value":0.11670223973801193}]}

Knife River Corporation provides aggregates-based construction materials and contracting services in the United States. It operates through six segments: Pacific, Northwest, Mountain, North Central, South, and Energy Services. The company mines, processes, and sells construction aggregates, including crushed stone and sand, and gravel; and produces and sells asphalt and ready-mix concrete, as well as provides contracting services to support the aggregate-based product lines, including heavy-civil construction, asphalt and concrete paving, and site development and grading. It serves federal, state, and municipal governments for various projects, such as highways, bridges, airports, schools, public buildings, and other public-infrastructure projects. The company was founded in 1917 and is based in Bismarck, North Dakota.

Sector

10-Q
9/30/23
10-Q
6/30/23
10-Q
3/31/23

DCF

Discounted Cash Flow Valuation of Knife River Corp

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	$246.2M	$320.1M	$407.2M	$506.8M	$616.6M	$733.1M	$851.2M	$964.7M	$1.066B	$1.149B	$1.207B	$12.07B
DCF		$278.3M	$307.9M	$333.2M	$352.5M	$364.5M	$368M	$362.6M	$348.6M	$326.7M	$298.3M	$2.983B
Value	$6.324B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 54%

Earnings Stability -29%

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	12-2021	12-2022	12-2023	TTM
Net Margin	5.8%	4.6%	6.5%	6.2%
ROA	8.8%	8.5%	12%	12%
ROE	14%	11%	14%	14%

What is the average Net Margin?

The average Net Margin over the past 5 years is +5.62%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +0.32%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +9.65%.

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

The trend of ROA over the past 5 years is +1.43%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +13.12%.

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

The trend of ROE over the past 5 years is +0.41%.

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.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

Data are missing

Years	12-2021	12-2022	12-2023	TTM
Debt FCF	-	0.02	3.26	2.79
Debt Equity	-	0.00	0.54	0.56
MIN
Graham Stability	-	-	-	-

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 2.79.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 3.24.

What is the Graham’s Stability?

Graham’s Stability measure stands at -.

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	12-2022	Trend
Revenue	12%	-2.1%
Net Income	57%	68%
Stockholders Equity	23%	15%
FCF	620%	300%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is -.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is -2.06%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +67.78%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is -.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +15.13%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is -.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +304.43%.