Curtiss Wright Corp (NYSE: CW)

Sector: Industrials Industry: Aerospace & Defense CIK: 0000026324
Market Cap 22.81 Bn
P/B 9.02
P/E 49.04
P/S 6.76
ROIC (Qtr) 12.52
Div Yield % 0.19
Rev 1y % (Qtr) 8.79
Total Debt (Qtr) 1.13 Bn
Debt/Equity (Qtr) 0.45

About

Curtiss-Wright Corporation (CW), a prominent entity in the Aerospace & Defense (A&D) industry, is known for its provision of highly engineered products, solutions, and services. It also contributes significantly to commercial power, process, and industrial markets with critical technologies. The company's operations are structured around three reportable segments: Aerospace & Industrial, Defense Electronics, and Naval & Power. CW's main business activities encompass a wide range of sectors, including commercial aerospace, defense, and industrial...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 591.96M provides robust 0.52x coverage of total debt 1.13B, indicating excellent debt servicing capability and financial flexibility.
  • Operating cash flow of 591.96M provides exceptional 13.82x coverage of interest expenses 42.83M, showing strong debt service capability.
  • Operating cash flow of 591.96M provides strong 29.11x coverage of stock compensation 20.33M, indicating sustainable incentive practices.
  • Robust free cash flow of 519.06M exceeds capital expenditure of 72.90M by 7.12x, indicating strong organic growth funding capability.
  • Strong tangible asset base of 2.86B provides 2.52x coverage of total debt 1.13B, indicating robust asset backing and low credit risk.

Bear case

  • Operating cash flow of 591.96M barely covers its investment activities of (266.39M), with a coverage ratio of -2.22, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 591.96M provides thin coverage of dividend payments of (32.92M) with a -17.98 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Investment activities of (266.39M) provide weak support for R&D spending of 95.52M, which is -2.79x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 225.43M provide limited coverage of acquisition spending of (201.40M), which is -1.12x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 591.96M provides insufficient coverage of deferred revenue obligations of 503.58M, which is 1.18x, raising concerns about future service delivery capabilities.

Product and Service Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Aerospace & Defense
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GE General Electric Co 342.94 Bn 42.54 7.80 20.84 Bn
2 RTX RTX Corp 252.05 Bn 38.24 2.93 40.71 Bn
3 BA Boeing Co 174.43 Bn -17.16 2.16 53.35 Bn
4 LMT Lockheed Martin Corp 126.61 Bn 30.15 1.73 22.19 Bn
5 GD General Dynamics Corp 95.62 Bn 22.69 1.86 8.01 Bn
6 NOC Northrop Grumman Corp /De/ 89.30 Bn 22.22 2.18 16.96 Bn
7 HWM Howmet Aerospace Inc. 88.16 Bn 60.80 11.05 3.19 Bn
8 TDG TransDigm Group INC 80.97 Bn 43.39 9.17 30.02 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 4.63 3.58
EV to Cash from Ops. EV/CFO 39.87 58.38
EV to Debt EV to Debt 20.83 98.04
EV to EBIT EV/EBIT 36.94 19.42
EV to EBITDA EV/EBITDA 32.48 33.60
EV to Free Cash Flow [EV/FCF] EV/FCF 45.47 91.66
EV to Market Cap EV to Market Cap 1.03 1.13
EV to Revenue EV/Rev 6.99 11.27
Price to Book Value [P/B] P/B 9.02 4.81
Price to Earnings [P/E] P/E 49.04 31.79
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 14.13 -3.75
Dividend Payout Ratio % Div Payout % (Qtr) 7.30 22.95
Dividend per Basic Share Div per Share (Qtr) 0.90 0.70
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 6.49 14.15
Interest Coverage Int. cover (Qtr) 14.92 -18.00
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -80.26 -50.32
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -49.21 1,609.43
Dividend Growth (1y) % Div 1y % (Qtr) 9.76 0.75
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 12.99 -30.98
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 12.74 10.65
EBIT Growth (1y) % EBIT 1y % (Qtr) 12.14 -26.90
EBT Growth (1y) % EBT 1y % (Qtr) 13.41 -27.25
EPS Growth (1y) % EPS 1y % (Qtr) 15.98 -99.21
FCF Growth (1y) % FCF 1y % (Qtr) 7.04 6.61
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 10.75 -5.55
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.66 0.51
Cash Payout Ratio Cash Payout (Qtr) 0.05 0.07
Cash Ratio Cash Ratio (Qtr) 0.20 1.76
Current Ratio Curr Ratio (Qtr) 1.75 3.72
Debt to Equity Ratio Debt/Equity (Qtr) 0.45 0.07
Interest Cover Ratio Int Coverage (Qtr) 14.92 -18.00
Times Interest Earned Times Interest Earned (Qtr) 14.92 -18.00
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 22.50 -345.84
EBIT Margin % EBIT Margin % (Qtr) 18.93 -382.63
EBT Margin % EBT Margin % (Qtr) 17.66 -387.93
Gross Margin % Gross Margin % (Qtr) 37.40 -33.31
Net Profit Margin % Net Margin % (Qtr) 13.80 -389.13