BORGWARNER INC (BWA) Stock Fundamental Analysis
NYSE:BWA - New York Stock Exchange, Inc. - US0997241064 - Common Stock - Currency: USD
Taking everything into account, BWA scores 5 out of 10 in our fundamental rating. BWA was compared to 43 industry peers in the Automobile Components industry. BWA has only an average score on both its financial health and profitability. BWA is valued quite cheap, 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.
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
With a decent Return On Assets value of 2.42%, BWA is doing good in the industry, outperforming 60.47% of the companies in the same industry.
Looking at the Return On Equity, with a value of 6.11%, BWA is in the better half of the industry, outperforming 65.12% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 9.40%, BWA is in the better half of the industry, outperforming 79.07% 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 10.03%.
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
With a decent Profit Margin value of 2.40%, BWA is doing good in the industry, outperforming 62.79% of the companies in the same industry.
In the last couple of years the Profit Margin of BWA has declined.
With a decent Operating Margin value of 9.25%, BWA is doing good in the industry, outperforming 76.74% of the companies in the same industry.
In the last couple of years the Operating Margin of BWA has declined.
BWA has a Gross Margin (18.80%) which is comparable to the rest of the industry.
In the last couple of years the Gross Margin of BWA has declined.
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so BWA is destroying value.
Compared to 1 year ago, BWA has less shares outstanding
BWA has more shares outstanding than it did 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 2.65. 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 2.65, BWA is in the better half of the industry, outperforming 69.77% of the companies in the same industry.
BWA has a debt to FCF ratio of 6.11. This is a slightly negative value and a sign of low solvency as BWA would need 6.11 years to pay back of all of its debts.
BWA has a Debt to FCF ratio of 6.11. This is in the better half of the industry: BWA outperforms 60.47% 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 65.12% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.69 | ||
| Debt/FCF | 6.11 | ||
| Altman-Z | 2.65 |
ROIC/WACC0.99
WACC9.52%
2.3 Liquidity
A Current Ratio of 1.79 indicates that BWA should not have too much problems paying its short term obligations.
BWA has a Current ratio (1.79) which is in line with its industry peers.
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 69.77% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.79 | ||
| Quick Ratio | 1.45 |
3. Growth
3.1 Past
The earnings per share for BWA have decreased by 0.00% in the last year.
Measured over the past 5 years, BWA shows a small growth in Earnings Per Share. The EPS has been growing by 0.90% on average per year.
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
Based on estimates for the next years, BWA will show a small growth in Earnings Per Share. The EPS will grow by 2.84% on average per year.
The Revenue is expected to grow by 5.84% on average over the next years.
EPS Next Y0.16%
EPS Next 2Y5.48%
EPS Next 3Y6.67%
EPS Next 5Y2.84%
Revenue Next Year-2.41%
Revenue Next 2Y0.87%
Revenue Next 3Y1.83%
Revenue Next 5Y5.84%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 6.76, which indicates a rather cheap valuation of BWA.
Based on the Price/Earnings ratio, BWA is valued cheaply inside the industry as 97.67% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 29.71, BWA is valued rather cheaply.
The Price/Forward Earnings ratio is 6.75, which indicates a rather cheap valuation of BWA.
BWA's Price/Forward Earnings ratio is rather cheap when compared to the industry. BWA is cheaper than 93.02% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.34. BWA is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.76 | ||
| Fwd PE | 6.75 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, BWA is valued cheaper than 86.05% of the companies in the same industry.
BWA's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. BWA is cheaper than 74.42% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.37 | ||
| EV/EBITDA | 4.25 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
BWA has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)42.68
PEG (5Y)7.48
EPS Next 2Y5.48%
EPS Next 3Y6.67%
5. Dividend
5.1 Amount
BWA has a Yearly Dividend Yield of 1.49%.
BWA's Dividend Yield is a higher than the industry average which is at 4.17.
Compared to the average S&P500 Dividend Yield of 2.30, BWA is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.49% |
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
28.99% of the earnings are spent on dividend by BWA. This is a low number and sustainable payout ratio.
DP28.99%
EPS Next 2Y5.48%
EPS Next 3Y6.67%
29.19
+1.07 (+3.81%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupAutomobiles & Components
GICS IndustryAutomobile Components
Earnings (Last)
Earnings (Next)
Inst Owners104.47%
Inst Owner Change3.85%
Ins Owners0.98%
Ins Owner Change11.41%
Market Cap6.38B
Analysts75.45
Price Target39.24 (34.43%)
Short Float %5.36%
Short Ratio4.64
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.49% |
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)-1.37%
PT rev (3m)-7.01%
EPS NQ rev (1m)-3.93%
EPS NQ rev (3m)-10.21%
EPS NY rev (1m)-4.42%
EPS NY rev (3m)-7.42%
Revenue NQ rev (1m)-3.15%
Revenue NQ rev (3m)-7.7%
Revenue NY rev (1m)-5.95%
Revenue NY rev (3m)-6.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.76 | ||
| Fwd PE | 6.75 | ||
| P/S | 0.45 | ||
| P/FCF | 9.37 | ||
| P/OCF | 4.72 | ||
| P/B | 1.15 | ||
| P/tB | 2.36 | ||
| EV/EBITDA | 4.25 |
EPS(TTM)4.32
EY14.8%
EPS(NY)4.33
Fwd EY14.82%
FCF(TTM)3.11
FCFY10.67%
OCF(TTM)6.18
OCFY21.18%
SpS64.41
BVpS25.3
TBVpS12.35
PEG (NY)42.68
PEG (5Y)7.48
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 | 2.65 |
F-Score7
WACC9.52%
ROIC/WACC0.99
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 Y0.16%
EPS Next 2Y5.48%
EPS Next 3Y6.67%
EPS Next 5Y2.84%
Revenue 1Y (TTM)-0.79%
Revenue growth 3Y-1.72%
Revenue growth 5Y6.74%
Sales Q2Q%-2.36%
Revenue Next Year-2.41%
Revenue Next 2Y0.87%
Revenue Next 3Y1.83%
Revenue Next 5Y5.84%
EBIT growth 1Y3.17%
EBIT growth 3Y-2.46%
EBIT growth 5Y1.39%
EBIT Next Year45.83%
EBIT Next 3Y20.27%
EBIT Next 5Y10.42%
FCF growth 1Y41.88%
FCF growth 3Y2.2%
FCF growth 5Y5.26%
OCF growth 1Y3.05%
OCF growth 3Y1.16%
OCF growth 5Y6.05%