EATON CORP PLC (ETN)
IE00B8KQN827 - Common Stock
We assign a fundamental rating of 7 out of 10 to ETN. ETN was compared to 88 industry peers in the Electrical Equipment industry. Both the health and profitability get an excellent rating, making ETN a very profitable company, without any liquidiy or solvency issues. ETN is not priced too expensively while it is growing strongly. Keep and eye on this one! Finally ETN also has an excellent dividend rating. These ratings would make ETN suitable for dividend and growth and quality investing!
1. Profitability
1.1 Basic Checks
In the past year ETN was profitable.
ETN had a positive operating cash flow in the past year.
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
Looking at the Return On Assets, with a value of 9.60%, ETN belongs to the top of the industry, outperforming 93.18% of the companies in the same industry.
With an excellent Return On Equity value of 19.71%, ETN belongs to the best of the industry, outperforming 93.18% of the companies in the same industry.
ETN has a Return On Invested Capital of 12.42%. This is amongst the best in the industry. ETN outperforms 92.05% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ETN is in line with the industry average of 9.38%.
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 94.32% of its industry peers.
In the last couple of years the Profit Margin of ETN has grown nicely.
The Operating Margin of ETN (18.71%) is better than 94.32% of its industry peers.
In the last couple of years the Operating Margin of ETN has grown nicely.
ETN has a better Gross Margin (37.83%) than 88.64% of its industry peers.
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), ETN 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
ETN has an Altman-Z score of 5.47. This indicates that ETN is financially healthy and has little risk of bankruptcy at the moment.
ETN has a better Altman-Z score (5.47) than 87.50% of its industry peers.
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 better Debt to FCF ratio (2.91) than 76.14% of its industry peers.
A Debt/Equity ratio of 0.45 indicates that ETN is not too dependend on debt financing.
ETN has a Debt to Equity ratio (0.45) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 2.91 | ||
| Altman-Z | 5.47 |
ROIC/WACC1.78
WACC6.96%
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 63.64% of its industry peers.
A Quick Ratio of 1.00 indicates that ETN should not have too much problems paying its short term obligations.
The Quick ratio of ETN (1.00) is worse than 63.64% of its industry peers.
The current and quick ratio evaluation for ETN is rather negative, while it does have 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.
ETN shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.11% yearly.
Looking at the last year, ETN shows a quite strong growth in Revenue. The Revenue has grown by 8.81% in the last year.
The Revenue has been growing slightly by 1.43% on average over the past years.
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 14.03% yearly.
ETN is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.93% yearly.
EPS Next Y19.68%
EPS Next 2Y15.66%
EPS Next 3Y14.49%
EPS Next 5Y14.03%
Revenue Next Year8.17%
Revenue Next 2Y8.01%
Revenue Next 3Y7.69%
Revenue Next 5Y8.93%
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.
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
Based on the Price/Earnings ratio of 32.14, the valuation of ETN can be described as expensive.
ETN's Price/Earnings ratio is a bit cheaper when compared to the industry. ETN is cheaper than 70.45% of the companies in the same industry.
ETN is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.73, which is the current average of the S&P500 Index.
ETN is valuated quite expensively with a Price/Forward Earnings ratio of 27.75.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ETN indicates a somewhat cheap valuation: ETN is cheaper than 71.59% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.83, ETN is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.14 | ||
| Fwd PE | 27.75 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ETN is valued a bit cheaper than 69.32% of the companies in the same industry.
ETN's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. ETN is cheaper than 71.59% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.33 | ||
| EV/EBITDA | 25.09 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of ETN may justify a higher PE ratio.
A more expensive valuation may be justified as ETN's earnings are expected to grow with 14.49% in the coming years.
PEG (NY)1.63
PEG (5Y)2.89
EPS Next 2Y15.66%
EPS Next 3Y14.49%
5. Dividend
5.1 Amount
ETN has a Yearly Dividend Yield of 1.05%. Purely for dividend investing, there may be better candidates out there.
ETN's Dividend Yield is rather good when compared to the industry average which is at 2.80. ETN pays more dividend than 88.64% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.24, ETN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.05% |
5.2 History
The dividend of ETN has a limited annual growth rate of 5.40%.
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)5.4%
Div Incr Years15
Div Non Decr Years34
5.3 Sustainability
ETN pays out 39.12% of its income as dividend. This is a sustainable payout ratio.
The dividend of ETN is growing, but earnings are growing more, so the dividend growth is sustainable.
DP39.12%
EPS Next 2Y15.66%
EPS Next 3Y14.49%
EATON CORP PLC
NYSE:ETN (12/20/2024, 8:07:40 PM)
After market: 375.63 +37.51 (+11.09%)338.12
+2.48 (+0.74%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryElectrical Equipment
Earnings (Last)
Earnings (Next)
Inst Owners82.05%
Inst Owner Change-2.47%
Ins Owners0.49%
Ins Owner Change-4.11%
Market Cap133.63B
Analysts77.58
Price Target381.59 (12.86%)
Short Float %1.23%
Short Ratio2.69
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.05% |
Dividend Growth(5Y)5.4%
DP39.12%
Div Incr Years15
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.92%
Min EPS beat(2)0.37%
Max EPS beat(2)3.47%
EPS beat(4)4
Avg EPS beat(4)2.47%
Min EPS beat(4)0.37%
Max EPS beat(4)3.84%
EPS beat(8)7
Avg EPS beat(8)2.77%
EPS beat(12)9
Avg EPS beat(12)1.95%
EPS beat(16)13
Avg EPS beat(16)3.28%
Revenue beat(2)0
Avg Revenue beat(2)-1.15%
Min Revenue beat(2)-1.44%
Max Revenue beat(2)-0.86%
Revenue beat(4)0
Avg Revenue beat(4)-0.68%
Min Revenue beat(4)-1.44%
Max Revenue beat(4)-0.05%
Revenue beat(8)3
Avg Revenue beat(8)0.12%
Revenue beat(12)4
Avg Revenue beat(12)-0.31%
Revenue beat(16)7
Avg Revenue beat(16)-0.02%
PT rev (1m)5.8%
PT rev (3m)8.59%
EPS NQ rev (1m)0.07%
EPS NQ rev (3m)1.34%
EPS NY rev (1m)0.02%
EPS NY rev (3m)1.5%
Revenue NQ rev (1m)0.05%
Revenue NQ rev (3m)-1.32%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)-0.35%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.14 | ||
| Fwd PE | 27.75 | ||
| P/S | 5.43 | ||
| P/FCF | 41.33 | ||
| P/OCF | 33.17 | ||
| P/B | 6.99 | ||
| P/tB | N/A | ||
| EV/EBITDA | 25.09 |
EPS(TTM)10.52
EY3.11%
EPS(NY)12.19
Fwd EY3.6%
FCF(TTM)8.18
FCFY2.42%
OCF(TTM)10.19
OCFY3.02%
SpS62.26
BVpS48.37
TBVpS-1.86
PEG (NY)1.63
PEG (5Y)2.89
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.6% | ||
| ROE | 19.71% | ||
| ROCE | 14.71% | ||
| ROIC | 12.42% | ||
| ROICexc | 13.27% | ||
| ROICexgc | 41.14% | ||
| OM | 18.71% | ||
| PM (TTM) | 15.31% | ||
| GM | 37.83% | ||
| FCFM | 13.14% |
ROA(3y)7.24%
ROA(5y)6.58%
ROE(3y)14.81%
ROE(5y)13.52%
ROIC(3y)9.14%
ROIC(5y)8.28%
ROICexc(3y)9.59%
ROICexc(5y)8.64%
ROICexgc(3y)36.52%
ROICexgc(5y)30.72%
ROCE(3y)10.86%
ROCE(5y)9.85%
ROICexcg growth 3Y32.03%
ROICexcg growth 5Y5.28%
ROICexc growth 3Y28.1%
ROICexc growth 5Y4.33%
OM growth 3Y22.3%
OM growth 5Y4.53%
PM growth 3Y20.67%
PM growth 5Y6.92%
GM growth 3Y6.01%
GM growth 5Y2.06%
F-Score8
Asset Turnover0.63
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 2.91 | ||
| Debt/EBITDA | 1.57 | ||
| Cap/Depr | 86.71% | ||
| Cap/Sales | 3.24% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 72.98% | ||
| Profit Quality | 85.8% | ||
| Current Ratio | 1.53 | ||
| Quick Ratio | 1 | ||
| Altman-Z | 5.47 |
F-Score8
WACC6.96%
ROIC/WACC1.78
Cap/Depr(3y)68.93%
Cap/Depr(5y)64.23%
Cap/Sales(3y)3.02%
Cap/Sales(5y)2.8%
Profit Quality(3y)80.58%
Profit Quality(5y)110.5%
High Growth Momentum
Growth
EPS 1Y (TTM)22.04%
EPS 3Y28.94%
EPS 5Y11.11%
EPS Q2Q%14.98%
EPS Next Y19.68%
EPS Next 2Y15.66%
EPS Next 3Y14.49%
EPS Next 5Y14.03%
Revenue 1Y (TTM)8.81%
Revenue growth 3Y9.11%
Revenue growth 5Y1.43%
Sales Q2Q%7.91%
Revenue Next Year8.17%
Revenue Next 2Y8.01%
Revenue Next 3Y7.69%
Revenue Next 5Y8.93%
EBIT growth 1Y22.49%
EBIT growth 3Y33.45%
EBIT growth 5Y6.03%
EBIT Next Year37.63%
EBIT Next 3Y19.47%
EBIT Next 5Y17.06%
FCF growth 1Y103.46%
FCF growth 3Y3.92%
FCF growth 5Y6.5%
OCF growth 1Y88.18%
OCF growth 3Y7.17%
OCF growth 5Y6.4%