BORGWARNER INC (BWA) Stock Fundamental Analysis
NYSE:BWA - New York Stock Exchange, Inc. - US0997241064 - Common Stock - Currency: USD
Overall BWA gets a fundamental rating of 5 out of 10. We evaluated BWA against 81 industry peers in the Automobile Components industry. BWA has an average financial health and profitability rating. BWA has a correct valuation and a medium growth rate.
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.
In the past 5 years BWA has always been profitable.
In the past 5 years BWA always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 2.09%, BWA is doing worse than 66.67% of the companies in the same industry.
The Return On Equity of BWA (5.05%) is worse than 65.43% of its industry peers.
BWA's Return On Invested Capital of 9.30% is amongst the best of the industry. BWA outperforms 88.89% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for BWA is in line with the industry average of 9.05%.
The last Return On Invested Capital (9.30%) for BWA is above the 3 year average (8.99%), which is a sign of increasing profitability.
| 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's Profit Margin of 2.06% is on the low side compared to the rest of the industry. BWA is outperformed by 67.90% of its industry peers.
BWA's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 9.42%, BWA is in line with its industry, outperforming 41.98% of the companies in the same industry.
In the last couple of years the Operating Margin of BWA has declined.
BWA has a worse Gross Margin (18.91%) than 76.54% of its industry peers.
BWA's Gross Margin has declined in the last couple of years.
| 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.
BWA has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, BWA has more shares outstanding
Compared to 1 year ago, BWA has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.84 indicates that BWA is not a great score, but indicates only limited risk for bankruptcy at the moment.
BWA has a Altman-Z score of 2.84. This is in the better half of the industry: BWA outperforms 62.96% 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.
BWA has a Debt to FCF ratio (4.01) which is comparable to the rest of the industry.
A Debt/Equity ratio of 0.67 indicates that BWA is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.67, BWA is doing worse than 74.07% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 4.01 | ||
| Altman-Z | 2.84 |
ROIC/WACC1.11
WACC8.41%
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 74.07% of its industry peers.
A Quick Ratio of 1.60 indicates that BWA should not have too much problems paying its short term obligations.
The Quick ratio of BWA (1.60) is better than 85.19% 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.
BWA shows a small growth in Revenue. In the last year, the Revenue has grown by 2.89%.
Measured over the past years, BWA shows a small growth in Revenue. The Revenue has been growing by 6.74% on average per year.
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
Based on estimates for the next years, BWA will show a small growth in Earnings Per Share. The EPS will grow by 5.67% on average per year.
Based on estimates for the next years, BWA will show a small growth in Revenue. The Revenue will grow by 3.02% on average per year.
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
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
BWA is valuated reasonably with a Price/Earnings ratio of 8.03.
Based on the Price/Earnings ratio, BWA is valued cheaply inside the industry as 81.48% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.45. BWA is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 7.54, which indicates a rather cheap valuation of BWA.
Based on the Price/Forward Earnings ratio, BWA is valued a bit cheaper than 72.84% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of BWA to the average of the S&P500 Index (21.90), we can say BWA is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.03 | ||
| Fwd PE | 7.54 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, BWA is valued a bit cheaper than the industry average as 65.43% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of BWA indicates a somewhat cheap valuation: BWA is cheaper than 70.37% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.07 | ||
| EV/EBITDA | 4.94 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)8.88
EPS Next 2Y4.14%
EPS Next 3Y5.75%
5. Dividend
5.1 Amount
BWA has a Yearly Dividend Yield of 1.25%. Purely for dividend investing, there may be better candidates out there.
BWA's Dividend Yield is slightly below the industry average, which is at 4.32.
Compared to an average S&P500 Dividend Yield of 2.38, BWA's dividend is way lower than the S&P500 average.
| 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%
35.32
-0.22 (-0.62%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupAutomobiles & Components
GICS IndustryAutomobile Components
Earnings (Last)
Earnings (Next)
Inst Owners104.28%
Inst Owner Change-57.37%
Ins Owners1.06%
Ins Owner Change15.35%
Market Cap7.76B
Analysts75.45
Price Target38.17 (8.07%)
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 | 8.03 | ||
| Fwd PE | 7.54 | ||
| P/S | 0.55 | ||
| P/FCF | 8.07 | ||
| P/OCF | 4.97 | ||
| P/B | 1.36 | ||
| P/tB | 2.68 | ||
| EV/EBITDA | 4.94 |
EPS(TTM)4.4
EY12.46%
EPS(NY)4.69
Fwd EY13.27%
FCF(TTM)4.38
FCFY12.4%
OCF(TTM)7.11
OCFY20.13%
SpS63.74
BVpS26.03
TBVpS13.19
PEG (NY)N/A
PEG (5Y)8.88
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 | 2.84 |
F-Score7
WACC8.41%
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%