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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Rpm International Inc. (XNYS:RPM) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
RPM
Name:
RPM INTERNATIONAL INC. (XNYS:RPM)
Sector:
24.22M
Industry:
Specialty Chemicals
CEO:
Mr. Frank Sullivan
Total Employees:
16,751
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -158.61% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF RPM INTERNATIONAL INC.(RPM) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SPECIALTY CHEMICALS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
92.53
One Month Price Target:
$93.01
Six Month Price Target :
$95.41
Likely Price in One Year's Time:
Ticker:
$98.28
Likely Trading Range Today Under (Normal Volatility)
$92.26
Price Upper limit ($) :
$92.9
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$88.69
This week:
$83.94
This month :
$75.35
Other Primary facts
Market Cap:
11.95B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
129.04M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.85%
-19.65%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$110.36
$102.14
$74.70
$82.92
Medium risk (<10%) entry points
Buy Call
Sell Call
$99.47
Buy Put:
Sell Put:
$97.72
$85.57
$87.34
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
RPM
Sharpe Ratio:
2.14%
Comparison:
RPM, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 0.92% higher than the industry
& is -6.21% lower than the market/S&P 500 average
Average Returns/Yield of
RPM
Daily returns:
0.05%
Weekly returns:
0.26%
Monthly returns:
1.05%
Yearly returns:
24.57%
Comparison of returns:
Average annual returns/yield (last 3 years) is -48.60% below industry average
Classification:
RPM, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.54
Statistical test of Returns:
RPM has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.05%
Weekly Volatility:
4.58%
Monthly Volatility:
9.16%
Yearly Volatility:
31.72%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.70%
Volatility in last five trading days has been -65.81% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.15%
Weekly VaR:
-9.29%
Monthly VaR:
-18.57%
How Much Can the price of
RPM
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-16%
Worst case (decline):
-64.33%
This translates to price declining to:
$77.89
This translates to price declining to:
$33.00
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
RPM is a 31.08% riskier investment compared to the market/S&P 500 & is 12.29% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -39.08% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
RPM
Beta in relation to market/S&P 500--0.93
Expected beta in 1 year's time:
0.868
Expected beta in 3 year's time:
1.227
Unlevered (debt free) Beta:
0.431
Beta in relation to Nasdaq (XNAS):
0.706
Beta in relation to all global stocks::
0.766
Beta Comparison & Analysis
Beta of competitors/peers::
1.384
Beta is -33.14% lower than peers
Average Industry Beta:
1.164
Beta is -20.51% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
14.70%
Sustainable growth rate is -49.10% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.031
Alpha is -76.65% below industry average alpha yield
Alpha is 200% higher than market/& is unsustainably high
Analysis of Cost of Capital of
RPM
Equity cost of capital:
0.095
Equity cost of capital is -14.71% below industry mean WACC
Unlevered (without debt) cost of capital:
4.42%
Before-tax cost of debt:
3.18%
After-tax cost of debt:
2.51%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.51%
WACC is -22.79% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$50.13
Revenue growth rate per share of (3Y):
6.67
Annual revenue growth rate is 920.62% above the industry average
EPS:
$3.46
Expected Annual growth rate of EPS (3Y):
19.91%
Expected future EPS growth rate is 2096.21% higher than the Specialty Chemicals industry
Free cash flow (FCF) per share:
$0.49
Balance sheet equity growth per share: 18.84%
Equity growth rate per share is 80.25% higher than the industry
Debt per share
$20.82
EBITDA per share
$6.40
Valuation Analysis Today of
RPM
P/E Ratio:
24.39
P/E Ratio of Competitors/Peers:
7.65
P/E ratio is 218.64% higher than main peers & is -34.89% lower than the industry
Stock price/value with industry average P/E ratio: $129.61
RPM is -28.61% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $30.95
Present value of the expected future dividends only: $18.99
P/S (Price to Sales ratio):
1.85
Price to sales ratio is -33.10% below the industry mean
P/B (Price to book value ratio):
6.67
Price to free cash flow: 189.65
Price to free cash flow ratio is 81.24% higher than the industry
Net income growth rate (3Y):
52.11%
Net income growth rate is -194.26% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 10.90%
Dividend yeild: 1.71%
Previous Dividend: $0.40
Previous adjusted dividend: $0.40
Previous Dividend: $1.58
Expected next dividend best case: $0.41
Expected next dividend worst case: $0.39
Average dividend payment (long-term): $0.38
Average dividend increase/decrease (growth rate) % per period: 1.08%
Expected next dividend payment date: 28/07/2022
Expected next dividend record date: 13/07/2022
Expected next dividend declaration date: 30/06/2022
Previous dividend payment date: 29/04/2022
Previous dividend record date: 14/04/2022
Previous dividend declaration date: 04/01/2022
Dividend History:
2022-04-13--$0.40
2021-10-15--$0.40
2021-04-14--$0.38
2022-01-13--$0.40
2021-07-14--$0.38
2021-01-14--$0.38
Dividend growth rate is -94.74% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
150.19%
Net debt to equity ratio:
138.36%
Debt to assets ratio:
43.56%
Net debt to assets ratio:
40.13%
Debt-to-asset ratio is -19.48% below industry average
Ability to repay debt:
Interest coverage ratio:
9.66
Interest coverage ratio is -54.08% less than industry average
Looking forward:
Debt growth rate:
-5.27%
Annual debt growth is -101% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.02%
Analysis of Key Statistics
Correlation of price movement with the market:
0.737
Statistical significance of correlation:
RPM has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.58
Stock price is 27.11% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.58
Correlation of price movement with Nasdaq (^IXIC):
0.003
Covariance of price movement with the market:
0.004
Kurtosis
21.159
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-0.333
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
RPM
Gross Profit Margin Ratio:
147%
Operating Profit Margin Ratio:
9.76%
Operating profit margin is -103.47% lower than the industry
Net Profit Margin Ratio:
147%
Effective Tax Rate:
23.73%
Effective tax rate is 32.14% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
25.08%
Return on equity (ROE) is -12.74% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
7.28%
Return on assets (ROA) is 177.05% higher than the industry
Financial Leverage:
1.8x
Current Ratio:
2.33
Current ratio is -13.04% below industry average
Cash Conversion Cycle (days):
31
Cash conversion cycle is -49.73% below industry average
The remaining useful life of property plant & equipment is: 1.8 years
Stock based compensation to net income ratio:
1.28%
In-depth Efficiency Analysis
Revenue generated per employee:
386.1K
Each employee generates -48% less revenue than industry average revenue per employee
EBITDA generated per employee:
49.3K
Each employee generates -50% less EBITDA than industry average revenue per employee
Profit generated per employee:
26.8K
Each employee generates -16% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
1.4K
Each employee generates -104% less free cash flow than industry average revenue per employee
Assets/Capital per employee
206.2K
Each employee generates -104% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
RPM
CLEVELAND-CLIFFS INC. (XNYS:CLF)
ALCOA CORPORATION (XNYS:AA)
AGNICO EAGLE MINES LIMITED (XNYS:AEM)
WESTLAKE CORPORATION (XNYS:WLK)
ICL GROUP LTD (XNYS:ICL)
RELIANCE STEEL & ALUMINUM CO. (XNYS:RS)
KIRKLAND LAKE GOLD LTD. (XNYS:KL)
Forum Energy Metals Corp. (XTSX:FMC)
West Fraser Timber Co. Ltd. (XNYS:WFG)
Current Analyst Ratings
Strong buy�8%
Buy�21%
Hold�25%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
2/28/22
Revenue:
6.47B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
4.08B
2.39B
-
-
1.76B
-
-
1.76B
4.50M
85.55M
152.03M
826.06M
631.34M
448.62M
589.38M
139.85M
448.62M
Statement of Cash Flow
Date:
Period:
37.94M
Differed Income Tax :
- 3452.00K
Stock Based Compensation :
5.76M
Change in Working Capital :
- 94414.00K
Accounts Receivables:
-
Other Working Capital:
- 100201.00K
Other Non-Cash Items:
- 4316.00K
Net Cash Provided by Operating Activities:
76.11M
Investments in PP&E:
-
Net Acquisitions:
- 35802.00K
Purchases of Investments:
- 5843.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
8/31/21
2022
Q1
213.21M
-
213.21M
1.17B
997.26M
330.32M
2.71B
1.25B
1.35B
626.24M
-
26.67M
201.75M
3.45B
-
6.17B
647.57M
1.65M
-
-
514.41M
1.16B
2.69B
417.07M
3.21B
-
4.38B
1.30M
1.94B
- 540508.0K
389.85M
August 31, 2021 at 6:00:00 AM
5.84B
1.79B
6.16B
-
2.69B
2.5B
2.77M
- 51638.00K
- 90517.00K
- 471.00K
-
- 18302.00K
- 48901.00K
60.49M
- 7187.00K
- 11895.00K
- 33492.00K
213.21M
246.70M
76.11M
- 51888.00K
24.22M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
RPM
2023
2024
2025
2026
2027
$94.66
$100.55
$106.80
$113.45
$120.50