What is RPM International Forward Rate of Return (Yacktman) %?
Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. RPM International's forward rate of return for was 15.65%.
The historical rank and industry rank for RPM International's Forward Rate of Return (Yacktman) % or its related term are showing as below:
RPM'
s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: 0.4 Med: 11.78 Max: 24.29
Current: 15.84
During the past 13 years, RPM International's highest Forward Rate of Return was 24.29. The lowest was 0.40. And the median was 11.78.
RPM's Forward Rate of Return (Yacktman) % is ranked better than 67.38% of 1128
companies
in the Chemicals industry
Industry Median: 8.87
vs RPM: 15.84
Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past seven years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
RPM International Forward Rate of Return (Yacktman) % Historical Data
The historical data trend for RPM International's Forward Rate of Return (Yacktman) % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
* Premium members only.
RPM International Forward Rate of Return (Yacktman) % Chart
Competitive Comparison of RPM International's Forward Rate of Return (Yacktman) %
For the Specialty Chemicals subindustry, RPM International's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
RPM International's Forward Rate of Return (Yacktman) % Distribution in the Chemicals Industry
For the Chemicals industry and Basic Materials sector, RPM International's Forward Rate of Return (Yacktman) % distribution charts can be found below:
* The bar in red indicates where RPM International's Forward Rate of Return (Yacktman) % falls into.
RPM International Forward Rate of Return (Yacktman) % Calculation
Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):
If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.
The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).
RPM International's Forward Rate of Return of Feb. 2024 is
Forward Rate of Return
=
Normalized Free Cash Flow
/
Price
+
5-Year EBITDA Growth Rate
=
3.17904762
/
115.35
+
0.1289
=
15.65 %
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
RPM International (NYSE:RPM) Forward Rate of Return (Yacktman) % Explanation
Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.
Be Aware
In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.
RPM International Forward Rate of Return (Yacktman) % Related Terms
Thank you for viewing the detailed overview of RPM International's Forward Rate of Return (Yacktman) % provided by GuruFocus.com. Please click on the following links to see related term pages.
RPM International (RPM International) Business Description
RPM International Inc manufactures and sells a variety of paints, coatings, and adhesives. The firm organizes itself into four segments based on product type. The construction products group sells coatings, roofing, insulation, and other products to distributers, contractors, and end consumers globally. The performance coatings group produces coatings that are used in construction and industrial applications like floorings and corrosion control. The consumer group sells paint, finishes, and similar products to individual consumers through hardware and craft stores. The specialty products group sells a variety of products ranging from niche applications of the other groups, to marine finishes, to edible food colorings. The majority of revenue comes from North America.
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