Ashland Inc. Fundamental Analysis (NYSE: ASH)
Ashland Inc. (NYSE: ASH) shows weak financial fundamentals with a PE ratio of 65.82, profit margin of 2.82%, and ROE of 2.77%. The company generates $1.8B in annual revenue with weak year-over-year growth of -13.68%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 23.9/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze ASH's fundamental strength across five key dimensions:
Efficiency Score
WeakASH struggles to generate sufficient returns from assets.
Valuation Score
ModerateASH shows balanced valuation metrics.
Growth Score
WeakASH faces weak or negative growth trends.
Financial Health Score
ExcellentASH maintains a strong and stable balance sheet.
Profitability Score
ModerateASH maintains healthy but balanced margins.
Key Financial Metrics
Is ASH Expensive or Cheap?
P/E Ratio
ASH trades at 65.82 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, ASH's PEG of 0.46 indicates potential undervaluation.
Price to Book
The market values Ashland Inc. at 1.85 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 6.15 times EBITDA. This is generally considered low.
How Well Does ASH Make Money?
Net Profit Margin
For every $100 in sales, Ashland Inc. keeps $2.82 as profit after all expenses.
Operating Margin
Core operations generate 7.33 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $2.77 in profit for every $100 of shareholder equity.
ROA
Ashland Inc. generates $1.14 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Ashland Inc. produces operating cash flow of $392.23M, showing steady but balanced cash generation.
Free Cash Flow
Ashland Inc. generates strong free cash flow of $321.55M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $7.02 in free cash annually.
FCF Yield
ASH converts 9.42% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
65.82
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.46
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.85
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.86
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.79
vs 25 benchmark
Current Ratio
Current assets to current liabilities
3.05
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.03
vs 25 benchmark
ROA
Return on assets percentage
0.01
vs 25 benchmark
ROCE
Return on capital employed
0.03
vs 25 benchmark
How ASH Stacks Against Its Sector Peers
| Metric | ASH Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 65.82 | 27.45 | Worse (Expensive) |
| ROE | 2.77% | 1182.00% | Weak |
| Net Margin | 2.82% | 195.00% | Weak |
| Debt/Equity | 0.79 | 0.75 | Neutral |
| Current Ratio | 3.05 | 3.28 | Strong Liquidity |
| ROA | 1.14% | 476796.00% | Weak |
ASH outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Ashland Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
19.98%
Industry Style: Cyclical, Commodity, Value
High GrowthEPS CAGR
-120.58%
Industry Style: Cyclical, Commodity, Value
DecliningFCF CAGR
-38.59%
Industry Style: Cyclical, Commodity, Value
Declining