EATON CORP PLC (ETN) Stock Fundamental Analysis
USA - NYSE:ETN - IE00B8KQN827 - Common Stock
371.27 USD
+7.92 (+2.18%)
371.36 USD
+0.09 (+0.02%)
ETN gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 92 industry peers in the Electrical Equipment industry. ETN has an excellent profitability rating, but there are some minor concerns on its financial health. ETN is not valued too expensively and it also shows a decent growth rate. ETN also has an excellent dividend rating. This makes ETN very considerable for dividend investing!
1. Profitability
1.1 Basic Checks
ETN had positive earnings in the past year.
ETN had a positive operating cash flow in the past year.
Each year in the past 5 years ETN has been profitable.
Each year in the past 5 years ETN had a positive operating cash flow.
1.2 Ratios
ETN's Return On Assets of 9.69% is amongst the best of the industry. ETN outperforms 93.48% of its industry peers.
ETN has a Return On Equity of 21.10%. This is amongst the best in the industry. ETN outperforms 92.39% of its industry peers.
Looking at the Return On Invested Capital, with a value of 12.83%, ETN belongs to the top of the industry, outperforming 90.22% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ETN is in line with the industry average of 9.86%.
The last Return On Invested Capital (12.83%) for ETN is above the 3 year average (10.83%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.69% | ||
| ROE | 21.1% | ||
| ROIC | 12.83% |
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
With an excellent Profit Margin value of 15.11%, ETN belongs to the best of the industry, outperforming 91.30% of the companies in the same industry.
In the last couple of years the Profit Margin of ETN has grown nicely.
ETN has a Operating Margin of 18.89%. This is amongst the best in the industry. ETN outperforms 94.57% of its industry peers.
ETN's Operating Margin has improved in the last couple of years.
The Gross Margin of ETN (38.16%) is better than 85.87% of its industry peers.
In the last couple of years the Gross Margin of ETN has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.89% | ||
| PM (TTM) | 15.11% | ||
| GM | 38.16% |
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) just above the Cost of Capital (WACC), ETN is creating some value.
ETN has less shares outstanding than it did 1 year ago.
The number of shares outstanding for ETN has been reduced compared to 5 years ago.
ETN has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 5.33 indicates that ETN is not in any danger for bankruptcy at the moment.
ETN's Altman-Z score of 5.33 is amongst the best of the industry. ETN outperforms 83.70% of its industry peers.
ETN has a debt to FCF ratio of 3.36. This is a good value and a sign of high solvency as ETN would need 3.36 years to pay back of all of its debts.
ETN has a Debt to FCF ratio of 3.36. This is in the better half of the industry: ETN outperforms 78.26% of its industry peers.
ETN has a Debt/Equity ratio of 0.53. This is a neutral value indicating ETN is somewhat dependend on debt financing.
ETN's Debt to Equity ratio of 0.53 is in line compared to the rest of the industry. ETN outperforms 43.48% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 3.36 | ||
| Altman-Z | 5.33 |
ROIC/WACC1.78
WACC7.22%
2.3 Liquidity
A Current Ratio of 1.24 indicates that ETN should not have too much problems paying its short term obligations.
The Current ratio of ETN (1.24) is worse than 65.22% of its industry peers.
ETN has a Quick Ratio of 1.24. This is a bad value and indicates that ETN is not financially healthy enough and could expect problems in meeting its short term obligations.
ETN's Quick ratio of 0.76 is on the low side compared to the rest of the industry. ETN is outperformed by 65.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.24 | ||
| Quick Ratio | 0.76 |
3. Growth
3.1 Past
ETN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.72%, which is quite good.
ETN shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.71% yearly.
ETN shows a small growth in Revenue. In the last year, the Revenue has grown by 7.66%.
The Revenue has been growing slightly by 3.07% on average over the past years.
EPS 1Y (TTM)11.72%
EPS 3Y17.66%
EPS 5Y13.71%
EPS Q2Q%8.06%
Revenue 1Y (TTM)7.66%
Revenue growth 3Y8.22%
Revenue growth 5Y3.07%
Sales Q2Q%10.68%
3.2 Future
Based on estimates for the next years, ETN will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.69% on average per year.
ETN is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.27% yearly.
EPS Next Y12.46%
EPS Next 2Y12.75%
EPS Next 3Y12%
EPS Next 5Y14.69%
Revenue Next Year9.95%
Revenue Next 2Y9.43%
Revenue Next 3Y8.74%
Revenue Next 5Y9.27%
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.
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
ETN is valuated quite expensively with a Price/Earnings ratio of 32.74.
ETN's Price/Earnings ratio is a bit cheaper when compared to the industry. ETN is cheaper than 73.91% of the companies in the same industry.
When comparing the Price/Earnings ratio of ETN to the average of the S&P500 Index (27.41), we can say ETN is valued inline with the index average.
With a Price/Forward Earnings ratio of 27.04, ETN can be considered very expensive at the moment.
Based on the Price/Forward Earnings ratio, ETN is valued a bit cheaper than 75.00% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.88. ETN is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.74 | ||
| Fwd PE | 27.04 |
4.2 Price Multiples
ETN's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ETN is cheaper than 70.65% of the companies in the same industry.
72.83% 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 | 44.16 | ||
| 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.
ETN's earnings are expected to grow with 12.00% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.63
PEG (5Y)2.39
EPS Next 2Y12.75%
EPS Next 3Y12%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.16%, ETN has a reasonable but not impressive dividend return.
ETN's Dividend Yield is rather good when compared to the industry average which is at 3.03. ETN pays more dividend than 89.13% of the companies in the same industry.
With a Dividend Yield of 1.16, ETN pays less dividend than the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.16% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)5.7%
Div Incr Years15
Div Non Decr Years34
5.3 Sustainability
ETN pays out 39.79% of its income as dividend. This is a sustainable payout ratio.
ETN's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP39.79%
EPS Next 2Y12.75%
EPS Next 3Y12%
371.27
+7.92 (+2.18%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryElectrical Equipment
Earnings (Last)
Earnings (Next)
Inst Owners86.21%
Inst Owner Change-0.76%
Ins Owners0.06%
Ins Owner Change-3.33%
Market Cap144.54B
Analysts77.3
Price Target397.37 (7.03%)
Short Float %1.76%
Short Ratio2.96
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.16% |
Yearly Dividend3.79
Dividend Growth(5Y)5.7%
DP39.79%
Div Incr Years15
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.23%
Min EPS beat(2)-0.48%
Max EPS beat(2)0.03%
EPS beat(4)2
Avg EPS beat(4)-0.09%
Min EPS beat(4)-0.48%
Max EPS beat(4)0.37%
EPS beat(8)6
Avg EPS beat(8)1.73%
EPS beat(12)8
Avg EPS beat(12)1.76%
EPS beat(16)11
Avg EPS beat(16)1.42%
Revenue beat(2)2
Avg Revenue beat(2)0.8%
Min Revenue beat(2)0.69%
Max Revenue beat(2)0.92%
Revenue beat(4)2
Avg Revenue beat(4)-0.57%
Min Revenue beat(4)-2.45%
Max Revenue beat(4)0.92%
Revenue beat(8)2
Avg Revenue beat(8)-0.59%
Revenue beat(12)5
Avg Revenue beat(12)-0.07%
Revenue beat(16)6
Avg Revenue beat(16)-0.46%
PT rev (1m)5.68%
PT rev (3m)12.13%
EPS NQ rev (1m)-0.43%
EPS NQ rev (3m)-1%
EPS NY rev (1m)0.43%
EPS NY rev (3m)0.53%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)0.87%
Revenue NY rev (1m)0.75%
Revenue NY rev (3m)0.92%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.74 | ||
| Fwd PE | 27.04 | ||
| P/S | 5.56 | ||
| P/FCF | 44.16 | ||
| P/OCF | 35.6 | ||
| P/B | 7.77 | ||
| P/tB | N/A | ||
| EV/EBITDA | 25.65 |
EPS(TTM)11.34
EY3.05%
EPS(NY)13.73
Fwd EY3.7%
FCF(TTM)8.41
FCFY2.26%
OCF(TTM)10.43
OCFY2.81%
SpS66.76
BVpS47.79
TBVpS-6.19
PEG (NY)2.63
PEG (5Y)2.39
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.69% | ||
| ROE | 21.1% | ||
| ROCE | 15.88% | ||
| ROIC | 12.83% | ||
| ROICexc | 13.07% | ||
| ROICexgc | 39.42% | ||
| OM | 18.89% | ||
| PM (TTM) | 15.11% | ||
| GM | 38.16% | ||
| FCFM | 12.59% |
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 Turnover0.64
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 3.36 | ||
| Debt/EBITDA | 1.68 | ||
| Cap/Depr | 81.81% | ||
| Cap/Sales | 3.03% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 69.15% | ||
| Profit Quality | 83.37% | ||
| Current Ratio | 1.24 | ||
| Quick Ratio | 0.76 | ||
| Altman-Z | 5.33 |
F-Score8
WACC7.22%
ROIC/WACC1.78
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)11.72%
EPS 3Y17.66%
EPS 5Y13.71%
EPS Q2Q%8.06%
EPS Next Y12.46%
EPS Next 2Y12.75%
EPS Next 3Y12%
EPS Next 5Y14.69%
Revenue 1Y (TTM)7.66%
Revenue growth 3Y8.22%
Revenue growth 5Y3.07%
Sales Q2Q%10.68%
Revenue Next Year9.95%
Revenue Next 2Y9.43%
Revenue Next 3Y8.74%
Revenue Next 5Y9.27%
EBIT growth 1Y9.53%
EBIT growth 3Y24.68%
EBIT growth 5Y10.68%
EBIT Next Year23.82%
EBIT Next 3Y14.47%
EBIT Next 5Y12.5%
FCF growth 1Y20.86%
FCF growth 3Y30.36%
FCF growth 5Y4.2%
OCF growth 1Y21.63%
OCF growth 3Y25.99%
OCF growth 5Y4.62%