Despite its growth, NYSE:ETN remains within the realm of affordability.

Last update: Dec 23, 2024

Our stock screener has singled out EATON CORP PLC (NYSE:ETN) as an attractive growth opportunity. NYSE:ETN is demonstrating remarkable growth potential while maintaining strong financial indicators, making it a reasonably priced option. We'll explore this further.

Growth Insights: NYSE:ETN

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NYSE:ETN has received a 7 out of 10:

The Earnings Per Share has grown by an impressive 22.04% over the past year.
The Earnings Per Share has been growing by 11.11% on average over the past years. This is quite good.
The Revenue has grown by 8.81% in the past year. This is quite good.
ETN is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.03% yearly.
The Revenue is expected to grow by 8.93% on average over the next years. This is quite good.
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

Understanding NYSE:ETN's Valuation

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NYSE:ETN boasts a 5 out of 10:

ETN's Price/Earnings ratio is a bit cheaper when compared to the industry. ETN is cheaper than 70.45% of the companies in the same industry.
Based on the Price/Forward Earnings ratio, ETN is valued a bit cheaper than 72.73% of the companies in the same industry.
Based on the Enterprise Value to EBITDA ratio, ETN is valued a bit cheaper than the industry average as 69.32% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, ETN is valued a bit cheaper than the industry average as 72.73% of the companies are valued more expensively.
ETN has an outstanding profitability rating, which may justify a higher PE ratio.
ETN's earnings are expected to grow with 14.45% in the coming years. This may justify a more expensive valuation.

Understanding NYSE:ETN's Health Score

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:ETN scores a 7 out of 10:

ETN has an Altman-Z score of 5.50. This indicates that ETN is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.50, ETN belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
ETN has a debt to FCF ratio of 2.91. This is a good value and a sign of high solvency as ETN would need 2.91 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 2.91, ETN is doing good in the industry, outperforming 76.14% of the companies in the same industry.
ETN has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.
The current and quick ratio evaluation for ETN is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Analyzing Profitability Metrics

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:ETN was assigned a score of 9 for profitability:

With an excellent Return On Assets value of 9.60%, ETN belongs to the best of the industry, outperforming 93.18% of the companies in the same industry.
ETN has a Return On Equity of 19.71%. This is amongst the best in the industry. ETN outperforms 93.18% of its industry peers.
ETN has a Return On Invested Capital of 12.42%. This is amongst the best in the industry. ETN outperforms 92.05% of its industry peers.
The 3 year average ROIC (9.14%) for ETN is below the current ROIC(12.42%), indicating increased profibility in the last year.
The Profit Margin of ETN (15.31%) is better than 94.32% of its industry peers.
In the last couple of years the Profit Margin of ETN has grown nicely.
ETN has a Operating Margin of 18.71%. This is amongst the best in the industry. ETN outperforms 94.32% of its industry peers.
ETN's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 37.83%, ETN belongs to the top of the industry, outperforming 88.64% of the companies in the same industry.
In the last couple of years the Gross Margin of ETN has grown nicely.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

For an up to date full fundamental analysis you can check the fundamental report of ETN

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.