Now trading at a price of $21.97, James Hardie Industries has moved -3.87% so far today. In contrast, the S&P 500 index moved -0.74%.
James Hardie Industries shares moved -32.67% over the last 52 weeks, with a high of $34.45 and a low of $17.25. During this time, the stock lagged the S&P 500 index by -27.27%.
James Hardie Industries plc manufactures and sells fiber cement, gypsum fiber and cement bonded construction products for interior and exterior building construction applications primarily in the United States, Australia, Europe, New Zealand, the Philippines and Canada. The large-cap Consumer Cyclical company is based in Dublin. James Hardie Industries has returned a 3.09% dividend yield over the last 12 months.
Snapshot of the Company's Steady Topline Growth and Cash Floes:
| 2019-03-31 | 2020-03-31 | 2021-03-31 | 2022-03-31 | |
|---|---|---|---|---|
| Revenue (MM) | $2,506 | $2,606 | $2,909 | $3,615 |
| Revenue Growth | n/a | 3.99% | 11.62% | 24.27% |
| Gross Margins | 33.16% | 35.8% | 36.16% | 36.34% |
| Gross Margins Growth | n/a | 7.96% | 1.01% | 0.5% |
| Operating Margins | 14.03% | 13.14% | 16.25% | 22.53% |
| Operating Margins Growth | n/a | -6.34% | 23.67% | 38.65% |
| Earnings Per Share | $0.84 | $0.75 | $0.59 | $1.03 |
| EPS Growth | n/a | -10.71% | -21.33% | 74.58% |
| Free Cash Flow (MM) | $101 | $257 | $667 | $498 |
| FCF Growth | n/a | 154.85% | 159.01% | -25.38% |
| Capital Expenditures (MM) | $203 | $194 | $120 | $260 |
| Net Debt / EBITDA | 2.46 | 2.78 | 1.11 | 0.91 |
James Hardie Industries Is Currently Fairly Valued:
Compared to the Consumer Cyclical sector's average of 22.33, James Hardie Industries has a trailing twelve month P/E ratio of 20.16 and, according to its EPS guidance of 1.36, an expected P/E ratio of 16.1. The company doesn't issue forward earnings guidance, and the annual average growth rate of its last 5 years of reported EPS is 6.25%. On this basis, the company's PEG ratio is 3.29, which suggests that it is overpriced.
James Hardie Industries's P/B ratio is 6.14 compared to its sector average of 3.12. The company is likely overvalued in terms of its net asset value. The company's shares are currently trading 200% above their fair value as expressed by Benjamin Graham's formula:
√(22.5 * 5-year average EPS * book value per share) = √(22.5 * 0.85 * 3.529) = $8.22
James Hardie Industries's elevated P/B ratio notwithstanding, the company's strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued.
The only analyst following James Hardie Industries has set a target price of $24.5 per share and rates rates the stock as strong buy.
