BORGWARNER INC (BWA) Stock Fundamental Analysis
NYSE:BWA - New York Stock Exchange, Inc. - US0997241064 - Common Stock - Currency: USD
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. BWA has an average financial health and profitability rating. BWA is valued correctly, but it does not seem to be growing.
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.
BWA had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of BWA (2.42%) is worse than 66.67% of its industry peers.
BWA has a worse Return On Equity (6.11%) than 65.43% of its industry peers.
The Return On Invested Capital of BWA (9.40%) is better than 88.89% of its industry peers.
The Average Return On Invested Capital over the past 3 years for BWA is in line with the industry average of 8.88%.
The 3 year average ROIC (8.99%) for BWA is below the current ROIC(9.40%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.42% | ||
| ROE | 6.11% | ||
| ROIC | 9.4% |
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 (2.40%) is worse than 64.20% of its industry peers.
BWA's Profit Margin has declined in the last couple of years.
BWA has a Operating Margin (9.25%) which is in line with its industry peers.
BWA's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 18.80%, BWA is doing worse than 76.54% of the companies in the same industry.
BWA's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.25% | ||
| PM (TTM) | 2.4% | ||
| GM | 18.8% |
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.
BWA has less shares outstanding than it did 1 year ago.
The number of shares outstanding for BWA has been increased compared to 5 years ago.
The debt/assets ratio for BWA is higher compared to a year ago.
2.2 Solvency
BWA has an Altman-Z score of 2.61. 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 (2.61) is better than 60.49% of its industry peers.
The Debt to FCF ratio of BWA is 6.11, which is on the high side as it means it would take BWA, 6.11 years of fcf income to pay off all of its debts.
BWA has a worse Debt to FCF ratio (6.11) than 66.67% of its industry peers.
BWA has a Debt/Equity ratio of 0.69. This is a neutral value indicating BWA is somewhat dependend on debt financing.
The Debt to Equity ratio of BWA (0.69) is worse than 80.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.69 | ||
| Debt/FCF | 6.11 | ||
| Altman-Z | 2.61 |
ROIC/WACC1.22
WACC7.68%
2.3 Liquidity
BWA has a Current Ratio of 1.79. This is a normal value and indicates that BWA is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Current ratio value of 1.79, BWA is doing good in the industry, outperforming 70.37% of the companies in the same industry.
A Quick Ratio of 1.45 indicates that BWA should not have too much problems paying its short term obligations.
BWA has a better Quick ratio (1.45) than 82.72% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.79 | ||
| Quick Ratio | 1.45 |
3. Growth
3.1 Past
BWA shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by 0.00%.
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 decrease in Revenue. The Revenue has decreased by -0.79% in the last year.
The Revenue has been growing slightly by 6.74% on average over the past years.
EPS 1Y (TTM)0%
EPS 3Y1.35%
EPS 5Y0.9%
EPS Q2Q%12.22%
Revenue 1Y (TTM)-0.79%
Revenue growth 3Y-1.72%
Revenue growth 5Y6.74%
Sales Q2Q%-2.36%
3.2 Future
BWA is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.69% yearly.
The Revenue is expected to grow by 2.72% on average over the next years.
EPS Next Y-2.09%
EPS Next 2Y3.91%
EPS Next 3Y4.61%
EPS Next 5Y4.69%
Revenue Next Year-1.47%
Revenue Next 2Y1.11%
Revenue Next 3Y1.91%
Revenue Next 5Y2.72%
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
BWA is valuated cheaply with a Price/Earnings ratio of 6.12.
Based on the Price/Earnings ratio, BWA is valued cheaper than 86.42% of the companies in the same industry.
When comparing the Price/Earnings ratio of BWA to the average of the S&P500 Index (28.29), we can say BWA is valued rather cheaply.
With a Price/Forward Earnings ratio of 6.25, the valuation of BWA can be described as very cheap.
Based on the Price/Forward Earnings ratio, BWA is valued a bit cheaper than 79.01% of the companies in the same industry.
BWA's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.12 | ||
| Fwd PE | 6.25 |
4.2 Price Multiples
66.67% of the companies in the same industry are more expensive than BWA, based on the Enterprise Value to EBITDA ratio.
60.49% 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 | 8.53 | ||
| EV/EBITDA | 3.96 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)6.78
EPS Next 2Y3.91%
EPS Next 3Y4.61%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.66%, BWA has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.67, BWA is paying slightly less dividend.
Compared to the average S&P500 Dividend Yield of 2.51, BWA is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.66% |
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
28.99% of the earnings are spent on dividend by BWA. This is a low number and sustainable payout ratio.
DP28.99%
EPS Next 2Y3.91%
EPS Next 3Y4.61%
26.45
+0.43 (+1.65%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupAutomobiles & Components
GICS IndustryAutomobile Components
Earnings (Last)
Earnings (Next)
Inst Owners104.47%
Inst Owner Change-0.06%
Ins Owners0.98%
Ins Owner Change8.89%
Market Cap5.81B
Analysts75.45
Price Target37.61 (42.19%)
Short Float %5.87%
Short Ratio4.94
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.66% |
Yearly Dividend0.44
Dividend Growth(5Y)-8.36%
DP28.99%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.7%
Min EPS beat(2)4.66%
Max EPS beat(2)16.74%
EPS beat(4)4
Avg EPS beat(4)13.75%
Min EPS beat(4)4.66%
Max EPS beat(4)17.1%
EPS beat(8)6
Avg EPS beat(8)9.23%
EPS beat(12)10
Avg EPS beat(12)12.46%
EPS beat(16)14
Avg EPS beat(16)16.34%
Revenue beat(2)0
Avg Revenue beat(2)-1.97%
Min Revenue beat(2)-2.65%
Max Revenue beat(2)-1.29%
Revenue beat(4)1
Avg Revenue beat(4)-1.56%
Min Revenue beat(4)-3.74%
Max Revenue beat(4)1.44%
Revenue beat(8)2
Avg Revenue beat(8)-0.42%
Revenue beat(12)4
Avg Revenue beat(12)-4.66%
Revenue beat(16)7
Avg Revenue beat(16)-2.17%
PT rev (1m)-3.32%
PT rev (3m)-10.49%
EPS NQ rev (1m)-0.03%
EPS NQ rev (3m)-10.34%
EPS NY rev (1m)-2.24%
EPS NY rev (3m)-9.44%
Revenue NQ rev (1m)-0.2%
Revenue NQ rev (3m)-7.86%
Revenue NY rev (1m)0.72%
Revenue NY rev (3m)-5.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.12 | ||
| Fwd PE | 6.25 | ||
| P/S | 0.41 | ||
| P/FCF | 8.53 | ||
| P/OCF | 4.3 | ||
| P/B | 1.05 | ||
| P/tB | 2.15 | ||
| EV/EBITDA | 3.96 |
EPS(TTM)4.32
EY16.33%
EPS(NY)4.23
Fwd EY15.99%
FCF(TTM)3.1
FCFY11.72%
OCF(TTM)6.15
OCFY23.27%
SpS64.12
BVpS25.18
TBVpS12.29
PEG (NY)N/A
PEG (5Y)6.78
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.42% | ||
| ROE | 6.11% | ||
| ROCE | 12.59% | ||
| ROIC | 9.4% | ||
| ROICexc | 11.77% | ||
| ROICexgc | 17.85% | ||
| OM | 9.25% | ||
| PM (TTM) | 2.4% | ||
| GM | 18.8% | ||
| FCFM | 4.83% |
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 | 0.69 | ||
| Debt/FCF | 6.11 | ||
| Debt/EBITDA | 1.94 | ||
| Cap/Depr | 99.7% | ||
| Cap/Sales | 4.76% | ||
| Interest Coverage | 10.77 | ||
| Cash Conversion | 68.42% | ||
| Profit Quality | 201.48% | ||
| Current Ratio | 1.79 | ||
| Quick Ratio | 1.45 | ||
| Altman-Z | 2.61 |
F-Score7
WACC7.68%
ROIC/WACC1.22
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)0%
EPS 3Y1.35%
EPS 5Y0.9%
EPS Q2Q%12.22%
EPS Next Y-2.09%
EPS Next 2Y3.91%
EPS Next 3Y4.61%
EPS Next 5Y4.69%
Revenue 1Y (TTM)-0.79%
Revenue growth 3Y-1.72%
Revenue growth 5Y6.74%
Sales Q2Q%-2.36%
Revenue Next Year-1.47%
Revenue Next 2Y1.11%
Revenue Next 3Y1.91%
Revenue Next 5Y2.72%
EBIT growth 1Y3.17%
EBIT growth 3Y-2.46%
EBIT growth 5Y1.39%
EBIT Next Year44.9%
EBIT Next 3Y15.63%
EBIT Next 5Y9.15%
FCF growth 1Y41.88%
FCF growth 3Y2.2%
FCF growth 5Y5.26%
OCF growth 1Y3.05%
OCF growth 3Y1.16%
OCF growth 5Y6.05%