EATON CORP PLC (ETN)
IE00B8KQN827 - Common Stock
We assign a fundamental rating of 7 out of 10 to ETN. ETN was compared to 91 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
In the past year ETN was profitable.
In the past year ETN had a positive cash flow from operations.
ETN had positive earnings in each of the past 5 years.
Each year in the past 5 years ETN had a positive operating cash flow.
1.2 Ratios
ETN has a Return On Assets of 9.60%. This is amongst the best in the industry. ETN outperforms 93.33% of its industry peers.
ETN's Return On Equity of 19.71% is amongst the best of the industry. ETN outperforms 92.22% of its industry peers.
ETN has a better Return On Invested Capital (12.42%) than 91.11% of its industry peers.
ETN had an Average Return On Invested Capital over the past 3 years of 9.14%. This is in line with the industry average of 10.64%.
The last Return On Invested Capital (12.42%) for ETN is above the 3 year average (9.14%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.6% | ||
| ROE | 19.71% | ||
| ROIC | 12.42% |
ROA(3y)7.24%
ROA(5y)6.58%
ROE(3y)14.81%
ROE(5y)13.52%
ROIC(3y)9.14%
ROIC(5y)8.28%
1.3 Margins
ETN has a Profit Margin of 15.31%. This is amongst the best in the industry. ETN outperforms 93.33% of its industry peers.
In the last couple of years the Profit Margin of ETN has grown nicely.
Looking at the Operating Margin, with a value of 18.71%, ETN belongs to the top of the industry, outperforming 93.33% of the companies in the same industry.
In the last couple of years the Operating Margin of ETN has grown nicely.
With an excellent Gross Margin value of 37.83%, ETN belongs to the best of the industry, outperforming 88.89% of the companies in the same industry.
In the last couple of years the Gross Margin of ETN has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.71% | ||
| PM (TTM) | 15.31% | ||
| GM | 37.83% |
OM growth 3Y22.3%
OM growth 5Y4.53%
PM growth 3Y20.67%
PM growth 5Y6.92%
GM growth 3Y6.01%
GM growth 5Y2.06%
2. Health
2.1 Basic Checks
ETN has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, ETN has more shares outstanding
Compared to 5 years ago, ETN has less shares outstanding
ETN has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 5.76 indicates that ETN is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.76, ETN belongs to the top of the industry, outperforming 85.56% of the companies in the same industry.
The Debt to FCF ratio of ETN is 2.91, which is a good value as it means it would take ETN, 2.91 years of fcf income to pay off all of its debts.
ETN has a Debt to FCF ratio of 2.91. This is in the better half of the industry: ETN outperforms 75.56% 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.
The Debt to Equity ratio of ETN (0.45) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 2.91 | ||
| Altman-Z | 5.76 |
ROIC/WACC1.78
WACC6.99%
2.3 Liquidity
ETN has a Current Ratio of 1.53. This is a normal value and indicates that ETN is financially healthy and should not expect problems in meeting its short term obligations.
ETN has a worse Current ratio (1.53) than 62.22% of its industry peers.
ETN has a Quick Ratio of 1.00. This is a normal value and indicates that ETN is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.00, ETN is not doing good in the industry: 62.22% of the companies in the same industry are doing better.
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 | 1.53 | ||
| Quick Ratio | 1 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 22.04% over the past year.
The Earnings Per Share has been growing by 11.11% on average over the past years. This is quite good.
The Revenue has grown by 8.81% in the past year. This is quite good.
ETN shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.43% yearly.
EPS 1Y (TTM)22.04%
EPS 3Y28.94%
EPS 5Y11.11%
EPS Q2Q%14.98%
Revenue 1Y (TTM)8.81%
Revenue growth 3Y9.11%
Revenue growth 5Y1.43%
Sales Q2Q%7.91%
3.2 Future
ETN is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.65% yearly.
Based on estimates for the next years, ETN will show a quite strong growth in Revenue. The Revenue will grow by 8.65% on average per year.
EPS Next Y19.65%
EPS Next 2Y15.6%
EPS Next 3Y14.42%
EPS Next 5Y12.65%
Revenue Next Year8.18%
Revenue Next 2Y7.97%
Revenue Next 3Y7.61%
Revenue Next 5Y8.65%
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.
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
A Price/Earnings ratio of 35.26 indicates a quite expensive valuation of ETN.
68.89% of the companies in the same industry are more expensive than ETN, based on the Price/Earnings ratio.
ETN is valuated rather expensively when we compare the Price/Earnings ratio to 28.96, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 30.47, which means the current valuation is very expensive for ETN.
71.11% of the companies in the same industry are more expensive than ETN, based on the Price/Forward Earnings ratio.
ETN is valuated rather expensively when we compare the Price/Forward Earnings ratio to 23.82, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.26 | ||
| Fwd PE | 30.47 |
4.2 Price Multiples
ETN's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ETN is cheaper than 68.89% of the companies in the same industry.
71.11% of the companies in the same industry are more expensive than ETN, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 45.34 | ||
| EV/EBITDA | 26.87 |
4.3 Compensation for Growth
ETN's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
ETN has an outstanding profitability rating, which may justify a higher PE ratio.
ETN's earnings are expected to grow with 14.42% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.79
PEG (5Y)3.17
EPS Next 2Y15.6%
EPS Next 3Y14.42%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.04%, ETN has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.18, ETN pays a better dividend. On top of this ETN pays more dividend than 88.89% of the companies listed in the same industry.
With a Dividend Yield of 1.04, ETN pays less dividend than the S&P500 average, which is at 2.23.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.04% |
5.2 History
The dividend of ETN has a limited annual growth rate of 5.40%.
ETN has paid a dividend for at least 10 years, which is a reliable track record.
ETN has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)5.4%
Div Incr Years14
Div Non Decr Years33
5.3 Sustainability
39.12% 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.
DP39.12%
EPS Next 2Y15.6%
EPS Next 3Y14.42%
EATON CORP PLC
NYSE:ETN (11/21/2024, 7:20:09 PM)
After market: 370.95 0 (0%)370.95
+10.49 (+2.91%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryElectrical Equipment
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap146.60B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.04% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.26 | ||
| Fwd PE | 30.47 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.79
PEG (5Y)3.17
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.6% | ||
| ROE | 19.71% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 18.71% | ||
| PM (TTM) | 15.31% | ||
| GM | 37.83% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.63
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.53 | ||
| Quick Ratio | 1 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)22.04%
EPS 3Y28.94%
EPS 5Y
EPS Q2Q%
EPS Next Y19.65%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)8.81%
Revenue growth 3Y9.11%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y