CNH INDUSTRIAL NV (CNH) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:CNH - NL0010545661 - Common Stock
11.05 USD
+0.04 (+0.36%)
11.06 USD
+0.01 (+0.09%)
CNH gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 132 industry peers in the Machinery industry. While CNH is still in line with the averages on profitability rating, there are concerns on its financial health. CNH is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
- In the past year CNH was profitable.
- CNH had a positive operating cash flow in the past year.
- Of the past 5 years CNH 4 years were profitable.
- CNH had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- The Return On Assets of CNH (1.38%) is worse than 62.88% of its industry peers.
- CNH's Return On Equity of 7.72% is in line compared to the rest of the industry. CNH outperforms 53.79% of its industry peers.
- CNH has a Return On Invested Capital of 6.11%. This is comparable to the rest of the industry: CNH outperforms 48.48% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for CNH is in line with the industry average of 10.24%.
- The last Return On Invested Capital (6.11%) for CNH is well below the 3 year average (11.39%), which needs to be investigated, but indicates that CNH had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.38% | ||
| ROE | 7.72% | ||
| ROIC | 6.11% |
ROA(3y)4.39%
ROA(5y)3.13%
ROE(3y)25.03%
ROE(5y)18.1%
ROIC(3y)11.39%
ROIC(5y)8.98%
1.3 Margins
- The Profit Margin of CNH (3.35%) is comparable to the rest of the industry.
- CNH's Profit Margin has improved in the last couple of years.
- CNH has a Operating Margin of 17.04%. This is in the better half of the industry: CNH outperforms 79.55% of its industry peers.
- In the last couple of years the Operating Margin of CNH has grown nicely.
- CNH's Gross Margin of 32.19% is in line compared to the rest of the industry. CNH outperforms 53.79% of its industry peers.
- In the last couple of years the Gross Margin of CNH has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.04% | ||
| PM (TTM) | 3.35% | ||
| GM | 32.19% |
OM growth 3Y4.76%
OM growth 5Y12.67%
PM growth 3Y-10.76%
PM growth 5Y4.4%
GM growth 3Y5.77%
GM growth 5Y8.01%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), CNH is creating some value.
- The number of shares outstanding for CNH has been reduced compared to 1 year ago.
- The number of shares outstanding for CNH has been reduced compared to 5 years ago.
- The debt/assets ratio for CNH is higher compared to a year ago.
2.2 Solvency
- Based on the Altman-Z score of 1.30, we must say that CNH is in the distress zone and has some risk of bankruptcy.
- With a Altman-Z score value of 1.30, CNH is not doing good in the industry: 78.79% of the companies in the same industry are doing better.
- The Debt to FCF ratio of CNH is 13.40, which is on the high side as it means it would take CNH, 13.40 years of fcf income to pay off all of its debts.
- With a Debt to FCF ratio value of 13.40, CNH is not doing good in the industry: 61.36% of the companies in the same industry are doing better.
- A Debt/Equity ratio of 3.51 is on the high side and indicates that CNH has dependencies on debt financing.
- Looking at the Debt to Equity ratio, with a value of 3.51, CNH is doing worse than 87.12% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.51 | ||
| Debt/FCF | 13.4 | ||
| Altman-Z | 1.3 |
ROIC/WACC0.73
WACC8.35%
2.3 Liquidity
- A Current Ratio of 1.69 indicates that CNH should not have too much problems paying its short term obligations.
- CNH has a worse Current ratio (1.69) than 65.15% of its industry peers.
- CNH has a Quick Ratio of 1.69. This is a bad value and indicates that CNH is not financially healthy enough and could expect problems in meeting its short term obligations.
- CNH has a Quick ratio of 0.58. This is amonst the worse of the industry: CNH underperforms 87.12% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.69 | ||
| Quick Ratio | 0.58 |
3. Growth
3.1 Past
- The earnings per share for CNH have decreased strongly by -63.50% in the last year.
- The Earnings Per Share has been growing slightly by 5.29% on average over the past years.
- CNH shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -18.10%.
- Measured over the past years, CNH shows a decrease in Revenue. The Revenue has been decreasing by -6.71% on average per year.
EPS 1Y (TTM)-63.5%
EPS 3Y-6.6%
EPS 5Y5.29%
EPS Q2Q%-66.67%
Revenue 1Y (TTM)-18.1%
Revenue growth 3Y0.58%
Revenue growth 5Y-6.71%
Sales Q2Q%-5.48%
3.2 Future
- CNH is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.74% yearly.
- The Revenue is expected to grow by 0.38% on average over the next years.
EPS Next Y-58.19%
EPS Next 2Y-27.74%
EPS Next 3Y-6%
EPS Next 5Y5.74%
Revenue Next Year-8.42%
Revenue Next 2Y-4.47%
Revenue Next 3Y0.01%
Revenue Next 5Y0.38%
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 stable.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 22.10, CNH is valued on the expensive side.
- Compared to the rest of the industry, the Price/Earnings ratio of CNH indicates a somewhat cheap valuation: CNH is cheaper than 70.45% of the companies listed in the same industry.
- CNH is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.32, which is the current average of the S&P500 Index.
- CNH is valuated rather expensively with a Price/Forward Earnings ratio of 19.24.
- 65.91% of the companies in the same industry are more expensive than CNH, based on the Price/Forward Earnings ratio.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.32, CNH is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.1 | ||
| Fwd PE | 19.24 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CNH indicates a somewhat cheap valuation: CNH is cheaper than 79.55% of the companies listed in the same industry.
- Based on the Price/Free Cash Flow ratio, CNH is valued cheaply inside the industry as 97.73% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.8 | ||
| EV/EBITDA | 10.56 |
4.3 Compensation for Growth
- CNH has a very decent profitability rating, which may justify a higher PE ratio.
- A cheap valuation may be justified as CNH's earnings are expected to decrease with -6.00% in the coming years.
PEG (NY)N/A
PEG (5Y)4.18
EPS Next 2Y-27.74%
EPS Next 3Y-6%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.31%, CNH has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 0.98, CNH pays a better dividend. On top of this CNH pays more dividend than 88.64% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.83, CNH pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.31% |
5.2 History
- On average, the dividend of CNH grows each year by 17.97%, which is quite nice.
- CNH has been paying a dividend for over 5 years, so it has already some track record.
- CNH has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)17.97%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
- 55.11% of the earnings are spent on dividend by CNH. This is a bit on the high side, but may be sustainable.
- CNH's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP55.11%
EPS Next 2Y-27.74%
EPS Next 3Y-6%
CNH INDUSTRIAL NV / CNH FAQ
Can you provide the ChartMill fundamental rating for CNH INDUSTRIAL NV?
ChartMill assigns a fundamental rating of 4 / 10 to CNH.
What is the valuation status of CNH INDUSTRIAL NV (CNH) stock?
ChartMill assigns a valuation rating of 5 / 10 to CNH INDUSTRIAL NV (CNH). This can be considered as Fairly Valued.
Can you provide the profitability details for CNH INDUSTRIAL NV?
CNH INDUSTRIAL NV (CNH) has a profitability rating of 6 / 10.
Can you provide the financial health for CNH stock?
The financial health rating of CNH INDUSTRIAL NV (CNH) is 2 / 10.
What is the expected EPS growth for CNH INDUSTRIAL NV (CNH) stock?
The Earnings per Share (EPS) of CNH INDUSTRIAL NV (CNH) is expected to decline by -58.19% in the next year.