Lydall SWOT Analysis

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Lydall SWOT Analysis

Early Findings

  • Lydall Inc. was founded in 1879, and is based in Manchester, Connecticut.
  • The company primarily focuses on manufacturing specialty engineer products and materials.
  • The goals of the company are to be the market leader in specialty engineered products, to provide innovative total systems solutions, to maintain a quality reputation as a global company, and to provide sustainable value for stockholders, customers, and employees.

Lydall Inc. Strengths

  • As a small cap stock, Lydall benefits from a larger potential for growth, a fair pricing, and a lack of artificial inflation from mutual and hedge funds.
  • Lydall Performance Materials provides its consumers with high-quality insulation and filtration options that are energy-efficient and environmentally sustainable.
  • At 81.4% per year, Lydall's earnings are expected to grow faster than the U.S. market (14.4% per year).
  • Priced at $21.49, Lydall Inc. is currently trading at 8.3% below its fair value ($23.43).
  • The company's short term assets (valued at $312.8 million) are greater than its short term liabilities (valued at $140.8 million).
  • Lydall's board of directors boast an average tenure of 13.8 years.
  • According to Indeed, an employee review aggregate website, Lydall has great benefits and compensation

Lydall Inc. Weaknesses

  • As of February 2020, Lydall's debt to equity ratio sits at 75.1%, which is an increase of 47.1% over the past five years.
  • The company has not reported any payouts as of February 2020.
  • Over the past five years, Lydall's earnings have experienced a downward trend of about -4% per year.
  • Lydall currently faces a net profit margin of 0.8%, which is 4.7% lower than last year's 5.5%.
  • The company's return on equity is expected to sit at 5.9% within the next few years.
  • Another common denominator between employee reviews is the presence of a poor work environment as well as a difficult work/life balance.
  • The company experienced a one-off loss of $32.8 million in 2019.
  • Lydall currently has a large amount of physical assets/inventory.
  • As a small cap stock, potential shareholders suffer from a higher risk and a lower liquidity.

Lydall Inc. Opportunities

  • Promoting environmentally efficient systems, Lydall Inc. places a high priority on long-term sustainability.
  • Lydall's current debt is noticeably offset by its operating cash flow, which makes up 32.5% of its debt.
  • The company's earnings before interest and taxes are currently 3.4 times the amount of its interest repayments on its debt.

Lydall Inc. Threats

  • Although Lydall's earnings are projected to grow, the company's overall state is still volatile, as its earnings are offset by a large amount of debt, and a sizable one-off loss.
  • Currently evaluated at 2.5% per year, Lydall's revenue is expected to fall behind the U.S. market's 7.6% per year.
  • Over the past year, the company had a negative earning's growth of -82.9%, which is far beneath the current Machinery industry average of 2.4%.