Owens Corning

OC

Abrasive, Asbestos & Misc Nonmetallic Mineral Prods

Mkt Cap

$15.5B

PE

13.97

Debt

$3.511B

Cash

$1.262B

EV

$17.75B

FCF

$1.387B

Market Cap

$15.5B

P/E Ratio

13.97

Debt

$3.511B

Cash

$1.262B

EV

$17.75B

FCF

$1.387B

Charts data: {"Earnings":[{"time":"2014-12-30","value":226000000},{"time":"2015-12-30","value":330000000},{"time":"2016-12-30","value":393000000},{"time":"2017-12-30","value":289000000},{"time":"2018-12-30","value":545000000},{"time":"2019-12-30","value":405000000},{"time":"2020-12-30","value":-385000000},{"time":"2021-12-30","value":995000000},{"time":"2022-12-30","value":1241000000},{"time":"2023-12-30","value":1193000000}],"Sales":[{"time":"2014-12-30","value":5276000000},{"time":"2015-12-30","value":5350000000},{"time":"2016-12-30","value":5677000000},{"time":"2017-12-30","value":6384000000},{"time":"2018-12-30","value":7057000000},{"time":"2019-12-30","value":7160000000},{"time":"2020-12-30","value":7055000000},{"time":"2021-12-30","value":8498000000},{"time":"2022-12-30","value":9761000000},{"time":"2023-12-30","value":9677000000}],"Net Margins":[{"time":"2014-12-30","value":0.04283548142532222},{"time":"2015-12-30","value":0.0616822429906542},{"time":"2016-12-30","value":0.06922670424519993},{"time":"2017-12-30","value":0.045269423558897244},{"time":"2018-12-30","value":0.07722828397335979},{"time":"2019-12-30","value":0.05656424581005587},{"time":"2020-12-30","value":-0.05457122608079376},{"time":"2021-12-30","value":0.11708637326429748},{"time":"2022-12-30","value":0.12713861284704436},{"time":"2023-12-30","value":0.12328200888705178}],"Assets":[{"time":"2014-12-30","value":7555000000},{"time":"2015-12-30","value":7380000000},{"time":"2016-12-30","value":7741000000},{"time":"2017-12-30","value":8632000000},{"time":"2018-12-30","value":9771000000},{"time":"2019-12-30","value":10006000000},{"time":"2020-12-30","value":9481000000},{"time":"2021-12-30","value":10015000000},{"time":"2022-12-30","value":10752000000},{"time":"2023-12-30","value":11237000000}],"Stockholders Equity":[{"time":"2014-12-30","value":3730000000},{"time":"2015-12-30","value":3779000000},{"time":"2016-12-30","value":3889000000},{"time":"2017-12-30","value":4204000000},{"time":"2018-12-30","value":4324000000},{"time":"2019-12-30","value":4671000000},{"time":"2020-12-30","value":3941000000},{"time":"2021-12-30","value":4335000000},{"time":"2022-12-30","value":4596000000},{"time":"2023-12-30","value":5185000000}],"ROE":[{"time":"2014-12-30","value":0.06058981233243968},{"time":"2015-12-30","value":0.08732468907118285},{"time":"2016-12-30","value":0.10105425559269735},{"time":"2017-12-30","value":0.06874405328258801},{"time":"2018-12-30","value":0.12604070305272896},{"time":"2019-12-30","value":0.08670520231213873},{"time":"2020-12-30","value":-0.09769094138543517},{"time":"2021-12-30","value":0.2295271049596309},{"time":"2022-12-30","value":0.27001740644038297},{"time":"2023-12-30","value":0.23008678881388622}],"ROA":[{"time":"2014-12-30","value":0.05188616810059563},{"time":"2015-12-30","value":0.07493224932249322},{"time":"2016-12-30","value":0.09029841105800285},{"time":"2017-12-30","value":0.08537998146431881},{"time":"2018-12-30","value":0.08402415310613039},{"time":"2019-12-30","value":0.078652808315011},{"time":"2020-12-30","value":-0.013078789157261891},{"time":"2021-12-30","value":0.1436844732900649},{"time":"2022-12-30","value":0.16024925595238096},{"time":"2023-12-30","value":0.16125300347067723}]}

Owens Corning engages in manufacture and sale of insulation, roofing, and fiberglass composite materials in the United States, Canada, Europe, the Asia Pacific, Latin America, and internationally. It operates in three segments: Composites, Insulation, and Roofing. The Composites segment manufactures, fabricates, and sells glass reinforcements in the form of fiber; and glass fiber products in the form of fabrics, non-wovens, and other specialized products. Its products are used in building structures, roofing shingles, tubs and showers, pools, decking, flooring, pipes and tanks, poles, electrical equipment, and wind-energy turbine blades. This segment sells its products directly to parts molders, fabricators, and shingle manufacturers. The Insulation segment manufactures and sells thermal and acoustical batts, loosefill insulation, spray foam insulation, foam sheathing and accessories under the Owens Corning PINK, and FIBERGLAS brands; and glass fiber pipe insulation, energy efficient flexible duct media, bonded and granulated mineral wool insulation, cellular glass insulation, and foam insulation under the FOAMULAR, FOAMGLAS, and Paroc brand names used in construction applications. This segment sells its products primarily to the insulation installers, home centers, lumberyards, retailers, and distributors. The Roofing segment manufactures and sells laminate and strip asphalt 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 manufacturers in automotive, chemical, rubber, and construction industries. The company was incorporated in 1938 and is headquartered in Toledo, Ohio.

Sector

10-Q
9/30/23
10-Q
6/30/23
10-Q
3/31/23
10-K
12/31/22
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3/31/22
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12/31/21
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9/30/21
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3/31/21
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12/31/20
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10-K
12/31/19
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6/30/19
10-Q
3/31/19
10-K
12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Owens Corning

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	$1.387B	$1.616B	$1.861B	$2.121B	$2.389B	$2.661B	$2.93B	$3.189B	$3.43B	$3.645B	$3.827B	$38.27B
DCF		$1.405B	$1.408B	$1.395B	$1.366B	$1.323B	$1.267B	$1.199B	$1.121B	$1.036B	$946.1M	$9.461B
Value	$21.93B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 22%

Earnings Stability 79%

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 high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce 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	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	6.2%	6.9%	4.5%	7.7%	5.7%	-5.5%	12%	13%	12%	11%
ROA	7.5%	9%	8.5%	8.4%	7.9%	-1.3%	14%	16%	16%	15%
ROE	8.7%	10%	6.9%	13%	8.7%	-9.8%	23%	27%	23%	21%

What is the average Net Margin?

The average Net Margin over the past 5 years is +7.45%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +1.75%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +10.25%.

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

The trend of ROA over the past 5 years is +2.25%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +14.08%.

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

The trend of ROE over the past 5 years is +3.99%.

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.

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

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	6.24	4.05	3.62	12.92	5.18	3.87	2.81	2.35	2.94	2.53
Debt Equity	0.55	0.55	0.58	0.79	0.65	0.81	0.70	0.67	0.68	0.67
MIN
Graham Stability	-	-	91%	100%	99%	-93%	100%	100%	100%	-93%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 2.53.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -1.70.

What is the Graham’s Stability?

Graham’s Stability measure stands at -0.93.

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 not been increasing in the past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	7.9%	6.5%	11%	-0.86%	0.35%
Net Income	17%	17%	-	-3.9%	-3.1%
Stockholders Equity	4.2%	3.7%	9.6%	13%	0.68%
FCF	12%	35%	13%	-9.2%	-38%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +6.52%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +0.35%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +16.96%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -3.09%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +3.7%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +0.68%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +35.01%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -38.24%.