Kennametal Working Tools Direct From Pittsburgh

This week I'm seeking a high-yield and growing stock from the industrials sector. 

That sector includes twenty-three industries all related to designing, fabricating and servicing stuff we want and use. The industrials industries range from aerospace and defense to waste management with all the transportation, business services, and equipment required in between.

Today I'm reviewing a mid-cap tools and accessories firm named Kennametal Inc. Its trading ticker symbol is KMT.

Kennametal Inc is engaged in developing and manufacturing metalworking tools and wear-resistant engineered components and coatings. The company's operating segments include Industrial, Widia and Infrastructure.

Its product offering includes a selection of standard and customized technologies for metalworking applications, such as turning, milling, hole making, tooling systems, and services for manufacturers of transportation vehicles and components, machine tools, and light and heavy machinery; airframe and aerospace components; and energy-related components for the oil and gas industry, as well as power generation.

The company provides its products under the Kennametal, WIDIA, WIDIA Hanita, and WIDIA GTD brands through its direct sales force; a network of independent and national chain distributors; integrated supplier channels; and value-added resellers, as well as through the Internet.

Kennametal Inc. was founded in 1938 and is based in Pittsburgh, Pennsylvania.

I use three key data points to gauge the value of any dividend equity or fund likeKennametal Inc. (KMT): 

(1) Price

(2) Dividends

(3) Returns

Besides those three, four more keys will finally unlock an equity or fund in which to invest.

But those first three primary keys, best tell whether a company has made, is making, and will make money. 

KMT Price

Kennametal's price per share was $40.83 at yesterday's market close. A year ago its price was $33.40 for a gain of $7.43 per share.  

Assuming Kennametal's price will trade in the range of $35 to $55 next year, perhaps that $7.43 gain could be realized in the coming year and move KMT's current $40.83 price to $48.26 by late-August, 2019. 

KMT Dividends

Kennametal's most recent quarterly annually steady dividend was $0.20declared August 7th and payable August 28th.

At it's most recent quarterly pay rate, KMT's 2018 annual dividend is calculated at $0.80 yielding 1.96% at yesterday's closing $40.83 price.

Gains For KMT?

Adding the $0.80 estimated annual dividend to the $7.43 year over year price gain for KMT makes an $8.23gross annual per share gain, which will be reduced by costs to trade the shares.  

A little under $1,000.00 invested today at the $57.43 recent price buys 24 Kennametal Inc. (KMT) shares. 

A $10 broker fee paid half at purchase and half at sale costs about $0.42 per share, subtracting that $0.42 brokerage cost from the estimated $8.23 gross gain leaves a net gain of $7.81 X 24 shares = $187.44 or an 18.75% net gain on a $979.82 investment.

Therefore, Kennametal Inc. whose trading ticker symbol is KMT, now shows a possible 18.75% net gain including a 1.95% dividend yield. 

Twelve brokers cover this stock:

Three say "buy" KMT.

Seven say KMT is a stock to "hold".

One says KMT will "underperform" its peers.

One says "sell" KMT

So, the analyst consensus recommendation number is 2.75 or "hold".

The median price target set by those twelve brokers is $2.36 under the $48.26 year over year price target I named. 

Y Charts has data on KMT, also. Y Charts has rated KMT "neutral" for an overall "Y" rating; it has "good" for a value score, and "strong" for KMT's fundamental score. Y Charts rated Kennametal "7.4% over" for aHistoric Valuation score based on a historic $38.92 valuation per share.

So, you could look at all those various numbers this way, Kennametal Inc. (KMT). has made money, is making money, and could net an 18.75% annual gain including a 1.95% dividend yield. It could be more, it could be less.

The above speculation is based on past year performance. Actual results remain to be seen. Those results will determine if Kennametal Inc. (KMT) is worth your time and money.

Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, ...

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