This article originally appeared on The DIV-Net September 21, 2009.
Linked here is a detailed quantitative analysis of RPM International Inc. (RPM). Below are some highlights from the above linked analysis:
Company Description: RPM International Inc. makes specialty coatings and products for the structural waterproofing and corrosion control markets, as well as products for the consumer, do-it-yourself and hobby markets.
Fair Value: I consider four calculations of fair value, see page 2 of the linked PDF for a detailed description:
- Avg. High Yield Price
- 20-Year DCF Price
- Avg. P/E Price
- Graham Number
RPM is trading at a premium to all four valuations above. Since RPM's tangible book value is not meaningful, a Graham number can not be calculated. The stock is trading at a 76.9% premium to its calculated fair value of $10.31. RPM did not earn any Stars in this section.
Dividend Analytical Data: In this section there are three possible Stars and three key metrics, see page 2 of the linked PDF for a detailed description:
- Free Cash Flow Payout
- Debt To Total Capital
- Key Metrics
- Dividend Growth Rate
- Years of Div. Growth
- Rolling 4-yr Div. > 15%
RPM earned three Stars in this section for 1.), 2.) and 3.) above. A Star was earned since the Free Cash Flow payout ratio was less than 60% and there were no negative Free Cash Flows over the last 10 years. RPM earned a Star as a result of its most recent Debt to Total Capital being less than 45%, and earned a Star for having an acceptable score in at least two of the four Key Metrics measured.
