BORGWARNER INC (BWA) Stock Fundamental Analysis
USA - NYSE:BWA - US0997241064 - Common Stock
41.75 USD
+0.53 (+1.29%)
41.75 USD
0 (0%)
Taking everything into account, BWA scores 4 out of 10 in our fundamental rating. BWA was compared to 81 industry peers in the Automobile Components industry. The financial health of BWA is average, but there are quite some concerns on its profitability. BWA has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
BWA had positive earnings in the past year.
In the past year BWA had a positive cash flow from operations.
BWA had positive earnings in each of the past 5 years.
BWA had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
BWA's Return On Assets of 1.46% is on the low side compared to the rest of the industry. BWA is outperformed by 72.84% of its industry peers.
The Return On Equity of BWA (3.55%) is worse than 69.14% of its industry peers.
With an excellent Return On Invested Capital value of 8.92%, BWA belongs to the best of the industry, outperforming 90.12% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for BWA is in line with the industry average of 8.51%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.46% | ||
| ROE | 3.55% | ||
| ROIC | 8.92% |
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
The Profit Margin of BWA (1.50%) is worse than 70.37% of its industry peers.
In the last couple of years the Profit Margin of BWA has declined.
BWA has a Operating Margin of 9.34%. This is comparable to the rest of the industry: BWA outperforms 43.21% 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 18.65%, BWA is doing worse than 75.31% 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 | 9.34% | ||
| PM (TTM) | 1.5% | ||
| GM | 18.65% |
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.
Compared to 1 year ago, BWA has less shares outstanding
Compared to 5 years ago, BWA has more shares outstanding
The debt/assets ratio for BWA is higher compared to a year ago.
2.2 Solvency
BWA has an Altman-Z score of 2.86. 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.
Looking at the Altman-Z score, with a value of 2.86, BWA is in the better half of the industry, outperforming 62.96% of the companies in the same industry.
BWA has a debt to FCF ratio of 3.33. This is a good value and a sign of high solvency as BWA would need 3.33 years to pay back of all of its debts.
BWA's Debt to FCF ratio of 3.33 is amongst the best of the industry. BWA outperforms 90.12% of its industry peers.
BWA has a Debt/Equity ratio of 0.66. This is a neutral value indicating BWA is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.66, BWA is doing worse than 76.54% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.66 | ||
| Debt/FCF | 3.33 | ||
| Altman-Z | 2.86 |
ROIC/WACC1.08
WACC8.26%
2.3 Liquidity
A Current Ratio of 2.02 indicates that BWA has no problem at all paying its short term obligations.
BWA has a better Current ratio (2.02) than 75.31% of its industry peers.
A Quick Ratio of 1.66 indicates that BWA should not have too much problems paying its short term obligations.
With an excellent Quick ratio value of 1.66, BWA belongs to the best of the industry, outperforming 85.19% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.02 | ||
| Quick Ratio | 1.66 |
3. Growth
3.1 Past
BWA shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.80%.
The Earnings Per Share has been growing slightly by 0.90% on average over the past years.
The Revenue has decreased by -2.10% in the past year.
The Revenue has been growing slightly by 6.74% on average over the past years.
EPS 1Y (TTM)7.8%
EPS 3Y1.35%
EPS 5Y0.9%
EPS Q2Q%1.68%
Revenue 1Y (TTM)-2.1%
Revenue growth 3Y-1.72%
Revenue growth 5Y6.74%
Sales Q2Q%0.97%
3.2 Future
Based on estimates for the next years, BWA will show a small growth in Earnings Per Share. The EPS will grow by 6.26% on average per year.
The Revenue is expected to grow by 4.17% on average over the next years.
EPS Next Y7.31%
EPS Next 2Y7.2%
EPS Next 3Y7.6%
EPS Next 5Y6.26%
Revenue Next Year1.68%
Revenue Next 2Y2.43%
Revenue Next 3Y2.63%
Revenue Next 5Y4.17%
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
A Price/Earnings ratio of 9.45 indicates a reasonable valuation of BWA.
BWA's Price/Earnings ratio is a bit cheaper when compared to the industry. BWA is cheaper than 79.01% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.50, BWA is valued rather cheaply.
The Price/Forward Earnings ratio is 8.41, which indicates a very decent valuation of BWA.
72.84% of the companies in the same industry are more expensive than BWA, based on the Price/Forward Earnings ratio.
BWA is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.99, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.45 | ||
| Fwd PE | 8.41 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of BWA indicates a somewhat cheap valuation: BWA is cheaper than 69.14% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, BWA is valued cheaper than 90.12% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.69 | ||
| EV/EBITDA | 5.42 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEG (NY)1.29
PEG (5Y)10.45
EPS Next 2Y7.2%
EPS Next 3Y7.6%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.63%, BWA has a reasonable but not impressive dividend return.
BWA's Dividend Yield is comparable with the industry average which is at 4.15.
Compared to the average S&P500 Dividend Yield of 2.44, BWA is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.63% |
5.2 History
The dividend of BWA decreases each year by -8.36%.
BWA has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-8.36%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
BWA pays out 45.71% of its income as dividend. This is a bit on the high side, but may be sustainable.
DP45.71%
EPS Next 2Y7.2%
EPS Next 3Y7.6%
41.75
+0.53 (+1.29%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupAutomobiles & Components
GICS IndustryAutomobile Components
Earnings (Last)
Earnings (Next)
Inst Owners103.57%
Inst Owner Change0%
Ins Owners1.03%
Ins Owner Change-3.87%
Market Cap9.03B
Analysts74.29
Price Target45.53 (9.05%)
Short Float %3.68%
Short Ratio3.46
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.63% |
Yearly Dividend0.44
Dividend Growth(5Y)-8.36%
DP45.71%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)11.58%
Min EPS beat(2)10.59%
Max EPS beat(2)12.56%
EPS beat(4)4
Avg EPS beat(4)11.14%
Min EPS beat(4)4.66%
Max EPS beat(4)16.74%
EPS beat(8)7
Avg EPS beat(8)9.53%
EPS beat(12)10
Avg EPS beat(12)10.93%
EPS beat(16)14
Avg EPS beat(16)13.96%
Revenue beat(2)1
Avg Revenue beat(2)1.04%
Min Revenue beat(2)-0.22%
Max Revenue beat(2)2.3%
Revenue beat(4)1
Avg Revenue beat(4)-0.47%
Min Revenue beat(4)-2.65%
Max Revenue beat(4)2.3%
Revenue beat(8)2
Avg Revenue beat(8)-1.36%
Revenue beat(12)4
Avg Revenue beat(12)-1.39%
Revenue beat(16)6
Avg Revenue beat(16)-3.17%
PT rev (1m)4.98%
PT rev (3m)19.29%
EPS NQ rev (1m)0.32%
EPS NQ rev (3m)8.86%
EPS NY rev (1m)0.52%
EPS NY rev (3m)6.54%
Revenue NQ rev (1m)0.33%
Revenue NQ rev (3m)3.26%
Revenue NY rev (1m)0.83%
Revenue NY rev (3m)2.41%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.45 | ||
| Fwd PE | 8.41 | ||
| P/S | 0.64 | ||
| P/FCF | 7.69 | ||
| P/OCF | 5.36 | ||
| P/B | 1.53 | ||
| P/tB | 2.99 | ||
| EV/EBITDA | 5.42 |
EPS(TTM)4.42
EY10.59%
EPS(NY)4.96
Fwd EY11.89%
FCF(TTM)5.43
FCFY13.01%
OCF(TTM)7.8
OCFY18.67%
SpS64.89
BVpS27.37
TBVpS13.98
PEG (NY)1.29
PEG (5Y)10.45
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.46% | ||
| ROE | 3.55% | ||
| ROCE | 11.88% | ||
| ROIC | 8.92% | ||
| ROICexc | 10.94% | ||
| ROICexgc | 16.13% | ||
| OM | 9.34% | ||
| PM (TTM) | 1.5% | ||
| GM | 18.65% | ||
| FCFM | 8.37% |
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-Score6
Asset Turnover0.98
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.66 | ||
| Debt/FCF | 3.33 | ||
| Debt/EBITDA | 1.94 | ||
| Cap/Depr | 73.46% | ||
| Cap/Sales | 3.65% | ||
| Interest Coverage | 11.71 | ||
| Cash Conversion | 83.97% | ||
| Profit Quality | 559.52% | ||
| Current Ratio | 2.02 | ||
| Quick Ratio | 1.66 | ||
| Altman-Z | 2.86 |
F-Score6
WACC8.26%
ROIC/WACC1.08
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)7.8%
EPS 3Y1.35%
EPS 5Y0.9%
EPS Q2Q%1.68%
EPS Next Y7.31%
EPS Next 2Y7.2%
EPS Next 3Y7.6%
EPS Next 5Y6.26%
Revenue 1Y (TTM)-2.1%
Revenue growth 3Y-1.72%
Revenue growth 5Y6.74%
Sales Q2Q%0.97%
Revenue Next Year1.68%
Revenue Next 2Y2.43%
Revenue Next 3Y2.63%
Revenue Next 5Y4.17%
EBIT growth 1Y1.39%
EBIT growth 3Y-2.46%
EBIT growth 5Y1.39%
EBIT Next Year47.4%
EBIT Next 3Y16.81%
EBIT Next 5Y10.65%
FCF growth 1Y98.15%
FCF growth 3Y2.2%
FCF growth 5Y5.26%
OCF growth 1Y12.09%
OCF growth 3Y1.16%
OCF growth 5Y6.05%