BORGWARNER INC (BWA) Stock Fundamental Analysis
NYSE:BWA - New York Stock Exchange, Inc. - US0997241064 - Common Stock - Currency: USD
BWA gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 80 industry peers in the Automobile Components industry. BWA has an average financial health and profitability rating. BWA has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
BWA had positive earnings in the past year.
BWA had a positive operating cash flow in the past year.
Each year in the past 5 years BWA has been profitable.
Each year in the past 5 years BWA had a positive operating cash flow.
1.2 Ratios
With a Return On Assets value of 2.09%, BWA is not doing good in the industry: 67.50% of the companies in the same industry are doing better.
With a Return On Equity value of 5.05%, BWA is not doing good in the industry: 66.25% of the companies in the same industry are doing better.
Looking at the Return On Invested Capital, with a value of 9.30%, BWA belongs to the top of the industry, outperforming 88.75% of the companies in the same industry.
BWA had an Average Return On Invested Capital over the past 3 years of 8.99%. This is in line with the industry average of 9.12%.
The 3 year average ROIC (8.99%) for BWA is below the current ROIC(9.30%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.09% | ||
| ROE | 5.05% | ||
| ROIC | 9.3% |
ROA(3y)4.1%
ROA(5y)3.73%
ROE(3y)9.97%
ROE(5y)9.08%
ROIC(3y)8.99%
ROIC(5y)8.17%
1.3 Margins
BWA has a worse Profit Margin (2.06%) than 68.75% of its industry peers.
BWA's Profit Margin has declined in the last couple of years.
BWA has a Operating Margin of 9.42%. This is comparable to the rest of the industry: BWA outperforms 41.25% of its industry peers.
In the last couple of years the Operating Margin of BWA has declined.
Looking at the Gross Margin, with a value of 18.91%, BWA is doing worse than 77.50% of the companies in the same industry.
In the last couple of years the Gross Margin of BWA has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.42% | ||
| PM (TTM) | 2.06% | ||
| GM | 18.91% |
OM growth 3Y-0.75%
OM growth 5Y-5.01%
PM growth 3Y-12.8%
PM growth 5Y-20.03%
GM growth 3Y-0.77%
GM growth 5Y-1.87%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), BWA is creating some value.
The number of shares outstanding for BWA has been reduced compared to 1 year ago.
BWA has more shares outstanding than it did 5 years ago.
BWA has a worse debt/assets ratio than last year.
2.2 Solvency
BWA has an Altman-Z score of 2.83. This is not the best score and indicates that BWA is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of BWA (2.83) is better than 62.50% of its industry peers.
The Debt to FCF ratio of BWA is 4.01, which is a neutral value as it means it would take BWA, 4.01 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 4.01, BWA is not doing good in the industry: 60.00% of the companies in the same industry are doing better.
A Debt/Equity ratio of 0.67 indicates that BWA is somewhat dependend on debt financing.
BWA has a Debt to Equity ratio of 0.67. This is in the lower half of the industry: BWA underperforms 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 4.01 | ||
| Altman-Z | 2.83 |
ROIC/WACC1.11
WACC8.37%
2.3 Liquidity
BWA has a Current Ratio of 1.97. This is a normal value and indicates that BWA is financially healthy and should not expect problems in meeting its short term obligations.
BWA's Current ratio of 1.97 is fine compared to the rest of the industry. BWA outperforms 73.75% of its industry peers.
A Quick Ratio of 1.60 indicates that BWA should not have too much problems paying its short term obligations.
BWA has a Quick ratio of 1.60. This is amongst the best in the industry. BWA outperforms 85.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.97 | ||
| Quick Ratio | 1.6 |
3. Growth
3.1 Past
BWA shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.29%.
The Earnings Per Share has been growing slightly by 0.90% on average over the past years.
Looking at the last year, BWA shows a small growth in Revenue. The Revenue has grown by 2.89% in the last year.
BWA shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.74% yearly.
EPS 1Y (TTM)3.29%
EPS 3Y1.35%
EPS 5Y0.9%
EPS Q2Q%7.77%
Revenue 1Y (TTM)2.89%
Revenue growth 3Y-1.72%
Revenue growth 5Y6.74%
Sales Q2Q%-2.23%
3.2 Future
The Earnings Per Share is expected to grow by 5.67% on average over the next years.
The Revenue is expected to grow by 3.02% on average over the next years.
EPS Next Y-0.31%
EPS Next 2Y4.14%
EPS Next 3Y5.75%
EPS Next 5Y5.67%
Revenue Next Year-1.56%
Revenue Next 2Y0.68%
Revenue Next 3Y2%
Revenue Next 5Y3.02%
3.3 Evolution
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 decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 7.92, the valuation of BWA can be described as very cheap.
Based on the Price/Earnings ratio, BWA is valued cheaper than 81.25% of the companies in the same industry.
BWA's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.29.
The Price/Forward Earnings ratio is 7.44, which indicates a rather cheap valuation of BWA.
BWA's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. BWA is cheaper than 73.75% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.74, BWA is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.92 | ||
| Fwd PE | 7.44 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, BWA is valued a bit cheaper than the industry average as 67.50% of the companies are valued more expensively.
71.25% of the companies in the same industry are more expensive than BWA, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.96 | ||
| EV/EBITDA | 4.88 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)8.76
EPS Next 2Y4.14%
EPS Next 3Y5.75%
5. Dividend
5.1 Amount
BWA has a Yearly Dividend Yield of 1.25%.
BWA's Dividend Yield is slightly below the industry average, which is at 4.30.
With a Dividend Yield of 1.25, BWA pays less dividend than the S&P500 average, which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.25% |
5.2 History
The dividend of BWA decreases each year by -8.36%.
BWA has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)-8.36%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
33.56% of the earnings are spent on dividend by BWA. This is a low number and sustainable payout ratio.
DP33.56%
EPS Next 2Y4.14%
EPS Next 3Y5.75%
34.84
-0.48 (-1.36%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupAutomobiles & Components
GICS IndustryAutomobile Components
Earnings (Last)
Earnings (Next)
Inst Owners104.28%
Inst Owner Change0.2%
Ins Owners1.06%
Ins Owner Change15.35%
Market Cap7.66B
Analysts75.45
Price Target38.17 (9.56%)
Short Float %3.92%
Short Ratio3.39
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.25% |
Yearly Dividend0.44
Dividend Growth(5Y)-8.36%
DP33.56%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.61%
Min EPS beat(2)4.66%
Max EPS beat(2)12.56%
EPS beat(4)4
Avg EPS beat(4)12.62%
Min EPS beat(4)4.66%
Max EPS beat(4)16.74%
EPS beat(8)7
Avg EPS beat(8)11.16%
EPS beat(12)10
Avg EPS beat(12)11.87%
EPS beat(16)14
Avg EPS beat(16)15.26%
Revenue beat(2)1
Avg Revenue beat(2)0.5%
Min Revenue beat(2)-1.29%
Max Revenue beat(2)2.3%
Revenue beat(4)1
Avg Revenue beat(4)-1.35%
Min Revenue beat(4)-3.74%
Max Revenue beat(4)2.3%
Revenue beat(8)3
Avg Revenue beat(8)-0.09%
Revenue beat(12)4
Avg Revenue beat(12)-4.75%
Revenue beat(16)7
Avg Revenue beat(16)-2.73%
PT rev (1m)7.1%
PT rev (3m)1.48%
EPS NQ rev (1m)-0.4%
EPS NQ rev (3m)-6.01%
EPS NY rev (1m)-0.98%
EPS NY rev (3m)-1.09%
Revenue NQ rev (1m)-0.06%
Revenue NQ rev (3m)0.76%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)-0.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.92 | ||
| Fwd PE | 7.44 | ||
| P/S | 0.55 | ||
| P/FCF | 7.96 | ||
| P/OCF | 4.9 | ||
| P/B | 1.34 | ||
| P/tB | 2.64 | ||
| EV/EBITDA | 4.88 |
EPS(TTM)4.4
EY12.63%
EPS(NY)4.69
Fwd EY13.45%
FCF(TTM)4.38
FCFY12.57%
OCF(TTM)7.11
OCFY20.4%
SpS63.74
BVpS26.03
TBVpS13.19
PEG (NY)N/A
PEG (5Y)8.76
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.09% | ||
| ROE | 5.05% | ||
| ROCE | 12.44% | ||
| ROIC | 9.3% | ||
| ROICexc | 11.07% | ||
| ROICexgc | 16.17% | ||
| OM | 9.42% | ||
| PM (TTM) | 2.06% | ||
| GM | 18.91% | ||
| FCFM | 6.87% |
ROA(3y)4.1%
ROA(5y)3.73%
ROE(3y)9.97%
ROE(5y)9.08%
ROIC(3y)8.99%
ROIC(5y)8.17%
ROICexc(3y)11.03%
ROICexc(5y)10.47%
ROICexgc(3y)18.11%
ROICexgc(5y)17.92%
ROCE(3y)12.03%
ROCE(5y)10.93%
ROICexcg growth 3Y-6.79%
ROICexcg growth 5Y-7.32%
ROICexc growth 3Y0.73%
ROICexc growth 5Y-5.84%
OM growth 3Y-0.75%
OM growth 5Y-5.01%
PM growth 3Y-12.8%
PM growth 5Y-20.03%
GM growth 3Y-0.77%
GM growth 5Y-1.87%
F-Score7
Asset Turnover1.01
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 4.01 | ||
| Debt/EBITDA | 1.93 | ||
| Cap/Depr | 88.5% | ||
| Cap/Sales | 4.28% | ||
| Interest Coverage | 9.49 | ||
| Cash Conversion | 78.22% | ||
| Profit Quality | 332.87% | ||
| Current Ratio | 1.97 | ||
| Quick Ratio | 1.6 | ||
| Altman-Z | 2.83 |
F-Score7
WACC8.37%
ROIC/WACC1.11
Cap/Depr(3y)114.31%
Cap/Depr(5y)102.13%
Cap/Sales(3y)5.07%
Cap/Sales(5y)4.85%
Profit Quality(3y)122.63%
Profit Quality(5y)126.26%
High Growth Momentum
Growth
EPS 1Y (TTM)3.29%
EPS 3Y1.35%
EPS 5Y0.9%
EPS Q2Q%7.77%
EPS Next Y-0.31%
EPS Next 2Y4.14%
EPS Next 3Y5.75%
EPS Next 5Y5.67%
Revenue 1Y (TTM)2.89%
Revenue growth 3Y-1.72%
Revenue growth 5Y6.74%
Sales Q2Q%-2.23%
Revenue Next Year-1.56%
Revenue Next 2Y0.68%
Revenue Next 3Y2%
Revenue Next 5Y3.02%
EBIT growth 1Y9.01%
EBIT growth 3Y-2.46%
EBIT growth 5Y1.39%
EBIT Next Year41.91%
EBIT Next 3Y15.58%
EBIT Next 5Y9.26%
FCF growth 1Y55.92%
FCF growth 3Y2.2%
FCF growth 5Y5.26%
OCF growth 1Y8.4%
OCF growth 3Y1.16%
OCF growth 5Y6.05%