Acme United Corp (ACU) stock analysis

P/E above its 5-year median

Acme United's P/E of 25.8 is above its own 5-year median of 15.6.

P/E above the industry

Acme United's P/E of 25.8 is above the Cutlery, Handtools, and General Hardware median of 21.2.

EV/EBITDA above its 5-year median

Acme United's EV/EBITDA of 12.3 is above its 5-year median of 11.9.

P/B above the industry

Acme United's price-to-book of 2.16 is above the Cutlery, Handtools, and General Hardware median of 2.07.

Trading above fair value

The share price of $70.20 is above our fair value estimate of $57.40.

Margin of safety under 20%

The price is 22.3% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 0.4% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 44.8% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 13.3% over the last twelve months, against a 5-year average of 4.7% a year.

Growing faster than the industry

Revenue grew 13.1% over the last twelve months; the Cutlery, Handtools, and General Hardware median is 4.3%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin improving

Gross margin was 41.7% over the last twelve months, against 39.5% a year earlier.

Return on equity under 15%

Return on equity was 9.4% over the last twelve months and averaged 12.5% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 9.5%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

Acme United's return on equity of 9.4% is below the Cutlery, Handtools, and General Hardware median of 13.6%.

Earnings grew over 5 years

Net income grew 4.7% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 5.1% over the last twelve months, against a 5-year average of 5.7%.

Net margin below the industry

Acme United's net margin of 5.1% is below the Cutlery, Handtools, and General Hardware median of 5.5%.

Low debt

Debt is 22.5% of shareholders' equity, under the 40% we consider low.

Debt falling against equity

Debt to equity fell from 61.8% five years ago to 22.5%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 67.9% of total debt.

Interest well covered

Operating income covers interest expense 7.7 times.

Short-term assets cover short-term debts

Current assets are 3.89 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 4.50; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Acme United paid dividends worth 0.9% of the share price over the last twelve months.

Yield below Treasuries

The 0.9% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Acme United yields 0.9%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 6 fiscal years.

Covered by earnings

Dividends take 21.5% of net income.

Covered by free cash flow

Dividends take 17.7% of free cash flow.