Luxfer Holdings PLC (LXFR) stock analysis

P/E above its 5-year median

Luxfer's P/E of 75.4 is above its own 5-year median of 19.0.

P/E above the industry

Luxfer's P/E of 75.4 is above the Chemicals and Allied Products median of 25.2.

EV/EBITDA above its 5-year median

Luxfer's EV/EBITDA of 22.4 is above its 5-year median of 10.2.

P/B above the industry

Luxfer's price-to-book of 2.09 is above the Chemicals and Allied Products median of 1.22.

Trading above fair value

The share price of $17.34 is above our fair value estimate of $9.09.

Margin of safety under 20%

The price is 90.7% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew -3.2% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -34.1% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -56.6% over the last twelve months, against a 5-year average of -17.4% a year.

Growing slower than the industry

Revenue grew -11.8% over the last twelve months; the Chemicals and Allied Products median is 8.2%.

Company guidance

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

Gross margin improving

Gross margin was 25.1% over the last twelve months, against 22.8% a year earlier.

Return on equity under 15%

Return on equity was 2.7% over the last twelve months and averaged 8.0% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 5.5%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

Luxfer's return on equity of 2.7% is above the Chemicals and Allied Products median of -0.8%.

Earnings shrank over 5 years

Net income shrank 17.4% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 1.7% over the last twelve months, against a 5-year average of 4.1%.

Net margin above the industry

Luxfer's net margin of 1.7% is above the Chemicals and Allied Products median of -0.4%.

Low debt

Debt is 26.0% of shareholders' equity, under the 40% we consider low.

Debt falling against equity

Debt to equity fell from 32.0% five years ago to 26.0%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 52.0% of total debt.

Interest well covered

Operating income covers interest expense 6.6 times.

Short-term assets cover short-term debts

Current assets are 2.47 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.57; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Luxfer paid dividends worth 2.2% of the share price over the last twelve months.

Yield below Treasuries

The 2.2% yield is below the 4.7% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Luxfer yields 2.2%.

Dividend stability

Fewer than five years of dividend history.

Not covered by earnings

Dividends take 221% of net income, leaving little room.

Covered by free cash flow

Dividends take 72.5% of free cash flow.