EATON CORP PLC (ETN) Stock Fundamental Analysis
NYSE:ETN - New York Stock Exchange, Inc. - IE00B8KQN827 - Common Stock - Currency: USD
ETN gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 94 industry peers in the Electrical Equipment industry. ETN gets an excellent profitability rating and is at the same time showing great financial health properties. ETN has a decent growth rate and is not valued too expensively. Finally ETN also has an excellent dividend rating. These ratings would make ETN suitable for dividend and quality investing!
1. Profitability
1.1 Basic Checks
ETN had positive earnings in the past year.
In the past year ETN had a positive cash flow from operations.
In the past 5 years ETN has always been profitable.
In the past 5 years ETN always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 10.04%, ETN belongs to the top of the industry, outperforming 94.68% of the companies in the same industry.
ETN's Return On Equity of 21.27% is amongst the best of the industry. ETN outperforms 91.49% of its industry peers.
Looking at the Return On Invested Capital, with a value of 13.39%, ETN belongs to the top of the industry, outperforming 92.55% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ETN is in line with the industry average of 9.89%.
The 3 year average ROIC (10.83%) for ETN is below the current ROIC(13.39%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.04% | ||
| ROE | 21.27% | ||
| ROIC | 13.39% |
ROA(3y)8.43%
ROA(5y)7.2%
ROE(3y)17.29%
ROE(5y)14.88%
ROIC(3y)10.83%
ROIC(5y)9.09%
1.3 Margins
ETN has a better Profit Margin (15.55%) than 93.62% of its industry peers.
ETN's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 19.27%, ETN belongs to the best of the industry, outperforming 96.81% of the companies in the same industry.
In the last couple of years the Operating Margin of ETN has grown nicely.
ETN's Gross Margin of 38.45% is amongst the best of the industry. ETN outperforms 88.30% of its industry peers.
ETN's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.27% | ||
| PM (TTM) | 15.55% | ||
| GM | 38.45% |
OM growth 3Y15.21%
OM growth 5Y7.39%
PM growth 3Y11.77%
PM growth 5Y8.09%
GM growth 3Y5.78%
GM growth 5Y2.99%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ETN is creating value.
ETN has less shares outstanding than it did 1 year ago.
ETN has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, ETN has an improved debt to assets ratio.
2.2 Solvency
ETN has an Altman-Z score of 5.61. This indicates that ETN is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.61, ETN belongs to the top of the industry, outperforming 85.11% of the companies in the same industry.
ETN has a debt to FCF ratio of 3.04. This is a good value and a sign of high solvency as ETN would need 3.04 years to pay back of all of its debts.
ETN's Debt to FCF ratio of 3.04 is fine compared to the rest of the industry. ETN outperforms 78.72% of its industry peers.
ETN has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.
ETN has a Debt to Equity ratio of 0.45. This is comparable to the rest of the industry: ETN outperforms 46.81% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 3.04 | ||
| Altman-Z | 5.61 |
ROIC/WACC1.85
WACC7.25%
2.3 Liquidity
ETN has a Current Ratio of 1.31. This is a normal value and indicates that ETN is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.31, ETN is doing worse than 63.83% of the companies in the same industry.
A Quick Ratio of 0.84 indicates that ETN may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.84, ETN is doing worse than 61.70% of the companies in the same industry.
ETN does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.31 | ||
| Quick Ratio | 0.84 |
3. Growth
3.1 Past
ETN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.47%, which is quite good.
The Earnings Per Share has been growing by 13.71% on average over the past years. This is quite good.
ETN shows a small growth in Revenue. In the last year, the Revenue has grown by 7.00%.
Measured over the past years, ETN shows a small growth in Revenue. The Revenue has been growing by 3.07% on average per year.
EPS 1Y (TTM)15.47%
EPS 3Y17.66%
EPS 5Y13.71%
EPS Q2Q%13.33%
Revenue 1Y (TTM)7%
Revenue growth 3Y8.22%
Revenue growth 5Y3.07%
Sales Q2Q%7.3%
3.2 Future
The Earnings Per Share is expected to grow by 14.10% on average over the next years. This is quite good.
The Revenue is expected to grow by 8.85% on average over the next years. This is quite good.
EPS Next Y11.87%
EPS Next 2Y12.43%
EPS Next 3Y11.83%
EPS Next 5Y14.1%
Revenue Next Year8.93%
Revenue Next 2Y8.33%
Revenue Next 3Y8.19%
Revenue Next 5Y8.85%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 32.57, ETN can be considered very expensive at the moment.
73.40% of the companies in the same industry are more expensive than ETN, based on the Price/Earnings ratio.
ETN's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.45.
A Price/Forward Earnings ratio of 26.53 indicates a quite expensive valuation of ETN.
72.34% of the companies in the same industry are more expensive than ETN, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 21.90. ETN is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.57 | ||
| Fwd PE | 26.53 |
4.2 Price Multiples
73.40% of the companies in the same industry are more expensive than ETN, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, ETN is valued a bit cheaper than the industry average as 71.28% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 42.72 | ||
| EV/EBITDA | 25.65 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of ETN may justify a higher PE ratio.
PEG (NY)2.74
PEG (5Y)2.38
EPS Next 2Y12.43%
EPS Next 3Y11.83%
5. Dividend
5.1 Amount
ETN has a Yearly Dividend Yield of 1.15%.
ETN's Dividend Yield is rather good when compared to the industry average which is at 4.38. ETN pays more dividend than 89.36% of the companies in the same industry.
With a Dividend Yield of 1.15, ETN pays less dividend than the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.15% |
5.2 History
The dividend of ETN has a limited annual growth rate of 5.70%.
ETN has been paying a dividend for at least 10 years, so it has a reliable track record.
ETN has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)5.7%
Div Incr Years15
Div Non Decr Years34
5.3 Sustainability
38.84% of the earnings are spent on dividend by ETN. This is a low number and sustainable payout ratio.
ETN's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP38.84%
EPS Next 2Y12.43%
EPS Next 3Y11.83%
362.22
+4.03 (+1.13%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryElectrical Equipment
Earnings (Last)
Earnings (Next)
Inst Owners85.8%
Inst Owner Change2.13%
Ins Owners0.06%
Ins Owner Change-1.67%
Market Cap141.74B
Analysts77.58
Price Target356.16 (-1.67%)
Short Float %2.05%
Short Ratio3.34
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.15% |
Yearly Dividend3.79
Dividend Growth(5Y)5.7%
DP38.84%
Div Incr Years15
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-0.38%
Min EPS beat(2)-0.48%
Max EPS beat(2)-0.28%
EPS beat(4)2
Avg EPS beat(4)0.77%
Min EPS beat(4)-0.48%
Max EPS beat(4)3.47%
EPS beat(8)6
Avg EPS beat(8)2.18%
EPS beat(12)8
Avg EPS beat(12)1.91%
EPS beat(16)11
Avg EPS beat(16)1.94%
Revenue beat(2)1
Avg Revenue beat(2)-0.77%
Min Revenue beat(2)-2.45%
Max Revenue beat(2)0.92%
Revenue beat(4)1
Avg Revenue beat(4)-0.96%
Min Revenue beat(4)-2.45%
Max Revenue beat(4)0.92%
Revenue beat(8)2
Avg Revenue beat(8)-0.55%
Revenue beat(12)4
Avg Revenue beat(12)-0.2%
Revenue beat(16)6
Avg Revenue beat(16)-0.28%
PT rev (1m)1.26%
PT rev (3m)-2.73%
EPS NQ rev (1m)-0.04%
EPS NQ rev (3m)-3.78%
EPS NY rev (1m)0.01%
EPS NY rev (3m)0.09%
Revenue NQ rev (1m)-0.01%
Revenue NQ rev (3m)1.65%
Revenue NY rev (1m)-0.1%
Revenue NY rev (3m)1.84%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.57 | ||
| Fwd PE | 26.53 | ||
| P/S | 5.6 | ||
| P/FCF | 42.72 | ||
| P/OCF | 34.65 | ||
| P/B | 7.66 | ||
| P/tB | N/A | ||
| EV/EBITDA | 25.65 |
EPS(TTM)11.12
EY3.07%
EPS(NY)13.65
Fwd EY3.77%
FCF(TTM)8.48
FCFY2.34%
OCF(TTM)10.45
OCFY2.89%
SpS64.69
BVpS47.29
TBVpS-2.38
PEG (NY)2.74
PEG (5Y)2.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.04% | ||
| ROE | 21.27% | ||
| ROCE | 16.43% | ||
| ROIC | 13.39% | ||
| ROICexc | 14.3% | ||
| ROICexgc | 44.79% | ||
| OM | 19.27% | ||
| PM (TTM) | 15.55% | ||
| GM | 38.45% | ||
| FCFM | 13.11% |
ROA(3y)8.43%
ROA(5y)7.2%
ROE(3y)17.29%
ROE(5y)14.88%
ROIC(3y)10.83%
ROIC(5y)9.09%
ROICexc(3y)11.53%
ROICexc(5y)9.59%
ROICexgc(3y)38.67%
ROICexgc(5y)33.99%
ROCE(3y)12.98%
ROCE(5y)10.88%
ROICexcg growth 3Y6.49%
ROICexcg growth 5Y11.09%
ROICexc growth 3Y21.4%
ROICexc growth 5Y9.81%
OM growth 3Y15.21%
OM growth 5Y7.39%
PM growth 3Y11.77%
PM growth 5Y8.09%
GM growth 3Y5.78%
GM growth 5Y2.99%
F-Score8
Asset Turnover0.65
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 3.04 | ||
| Debt/EBITDA | 1.45 | ||
| Cap/Depr | 83.19% | ||
| Cap/Sales | 3.05% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 70.46% | ||
| Profit Quality | 84.28% | ||
| Current Ratio | 1.31 | ||
| Quick Ratio | 0.84 | ||
| Altman-Z | 5.61 |
F-Score8
WACC7.25%
ROIC/WACC1.85
Cap/Depr(3y)77.39%
Cap/Depr(5y)68.5%
Cap/Sales(3y)3.13%
Cap/Sales(5y)2.9%
Profit Quality(3y)86.8%
Profit Quality(5y)103.14%
High Growth Momentum
Growth
EPS 1Y (TTM)15.47%
EPS 3Y17.66%
EPS 5Y13.71%
EPS Q2Q%13.33%
EPS Next Y11.87%
EPS Next 2Y12.43%
EPS Next 3Y11.83%
EPS Next 5Y14.1%
Revenue 1Y (TTM)7%
Revenue growth 3Y8.22%
Revenue growth 5Y3.07%
Sales Q2Q%7.3%
Revenue Next Year8.93%
Revenue Next 2Y8.33%
Revenue Next 3Y8.19%
Revenue Next 5Y8.85%
EBIT growth 1Y16.23%
EBIT growth 3Y24.68%
EBIT growth 5Y10.68%
EBIT Next Year24.05%
EBIT Next 3Y14.37%
EBIT Next 5Y12.5%
FCF growth 1Y49.66%
FCF growth 3Y30.36%
FCF growth 5Y4.2%
OCF growth 1Y44.73%
OCF growth 3Y25.99%
OCF growth 5Y4.62%