EATON CORP PLC (ETN) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ETN - IE00B8KQN827 - Common Stock
337.66 USD
-1.27 (-0.37%)
337.66 USD
0 (0%)
ETN gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 90 industry peers in the Electrical Equipment industry. While ETN has a great profitability rating, there are some minor concerns on its financial health. ETN has a correct valuation and a medium growth rate.
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
ETN's Return On Assets of 9.66% is amongst the best of the industry. ETN outperforms 91.11% of its industry peers.
ETN's Return On Equity of 20.84% is amongst the best of the industry. ETN outperforms 92.22% of its industry peers.
Looking at the Return On Invested Capital, with a value of 13.15%, ETN belongs to the top of the industry, outperforming 92.22% of the companies in the same industry.
ETN had an Average Return On Invested Capital over the past 3 years of 10.83%. This is in line with the industry average of 9.93%.
The 3 year average ROIC (10.83%) for ETN is below the current ROIC(13.15%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.66% | ||
| ROE | 20.84% | ||
| ROIC | 13.15% |
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
The Profit Margin of ETN (14.74%) is better than 88.89% 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 18.84%, ETN belongs to the top of the industry, outperforming 93.33% of the companies in the same industry.
ETN's Operating Margin has improved in the last couple of years.
The Gross Margin of ETN (38.10%) is better than 85.56% of its industry peers.
ETN's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.84% | ||
| PM (TTM) | 14.74% | ||
| GM | 38.1% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ETN is still creating some value.
ETN has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, ETN has less shares outstanding
The debt/assets ratio for ETN has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 5.10 indicates that ETN is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 5.10, ETN is doing good in the industry, outperforming 78.89% of the companies in the same industry.
The Debt to FCF ratio of ETN is 3.21, which is a good value as it means it would take ETN, 3.21 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.21, ETN is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
A Debt/Equity ratio of 0.51 indicates that ETN is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.51, ETN perfoms like the industry average, outperforming 47.78% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.51 | ||
| Debt/FCF | 3.21 | ||
| Altman-Z | 5.1 |
ROIC/WACC1.69
WACC7.8%
2.3 Liquidity
A Current Ratio of 1.28 indicates that ETN should not have too much problems paying its short term obligations.
ETN has a Current ratio of 1.28. This is in the lower half of the industry: ETN underperforms 65.56% of its industry peers.
A Quick Ratio of 0.79 indicates that ETN may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.79, ETN is doing worse than 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.28 | ||
| Quick Ratio | 0.79 |
3. Growth
3.1 Past
ETN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.98%, which is quite good.
Measured over the past years, ETN shows a quite strong growth in Earnings Per Share. The EPS has been growing by 13.71% on average per year.
Looking at the last year, ETN shows a quite strong growth in Revenue. The Revenue has grown by 8.24% in the last year.
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)9.98%
EPS 3Y17.66%
EPS 5Y13.71%
EPS Q2Q%8.1%
Revenue 1Y (TTM)8.24%
Revenue growth 3Y8.22%
Revenue growth 5Y3.07%
Sales Q2Q%10.13%
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 10.78% yearly.
Based on estimates for the next years, ETN will show a quite strong growth in Revenue. The Revenue will grow by 9.21% on average per year.
EPS Next Y12.42%
EPS Next 2Y13.13%
EPS Next 3Y13.17%
EPS Next 5Y10.78%
Revenue Next Year10.02%
Revenue Next 2Y9.89%
Revenue Next 3Y9.49%
Revenue Next 5Y9.21%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past 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 29.18.
74.44% of the companies in the same industry are more expensive than ETN, based on the Price/Earnings ratio.
ETN is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.49, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 24.43, the valuation of ETN can be described as rather expensive.
Based on the Price/Forward Earnings ratio, ETN is valued a bit cheaper than 73.33% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ETN to the average of the S&P500 Index (23.69), we can say ETN is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.18 | ||
| Fwd PE | 24.43 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ETN is valued a bit cheaper than the industry average as 72.22% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, ETN is valued a bit cheaper than 72.22% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.5 | ||
| EV/EBITDA | 23.36 |
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 13.17% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.35
PEG (5Y)2.13
EPS Next 2Y13.13%
EPS Next 3Y13.17%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.23%, 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 3.08. ETN pays more dividend than 88.89% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.31, ETN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.23% |
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
40.54% of the earnings are spent on dividend by ETN. This is a bit on the high side, but may be sustainable.
The dividend of ETN is growing, but earnings are growing more, so the dividend growth is sustainable.
DP40.54%
EPS Next 2Y13.13%
EPS Next 3Y13.17%
337.66
-1.27 (-0.37%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryElectrical Equipment
Earnings (Last)
Earnings (Next)
Inst Owners85.7%
Inst Owner Change-4.23%
Ins Owners0.04%
Ins Owner Change-0.1%
Market Cap131.15B
Revenue(TTM)26.63B
Net Income(TTM)3.93B
Analysts78.24
Price Target409.66 (21.32%)
Short Float %1.85%
Short Ratio2.92
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.23% |
Yearly Dividend3.79
Dividend Growth(5Y)5.7%
DP40.54%
Div Incr Years15
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.2%
Min EPS beat(2)-0.42%
Max EPS beat(2)0.03%
EPS beat(4)1
Avg EPS beat(4)-0.29%
Min EPS beat(4)-0.48%
Max EPS beat(4)0.03%
EPS beat(8)5
Avg EPS beat(8)1.09%
EPS beat(12)8
Avg EPS beat(12)1.75%
EPS beat(16)10
Avg EPS beat(16)1.39%
Revenue beat(2)1
Avg Revenue beat(2)-0.78%
Min Revenue beat(2)-2.25%
Max Revenue beat(2)0.69%
Revenue beat(4)2
Avg Revenue beat(4)-0.78%
Min Revenue beat(4)-2.45%
Max Revenue beat(4)0.92%
Revenue beat(8)2
Avg Revenue beat(8)-0.73%
Revenue beat(12)5
Avg Revenue beat(12)-0.18%
Revenue beat(16)6
Avg Revenue beat(16)-0.42%
PT rev (1m)1.57%
PT rev (3m)3.42%
EPS NQ rev (1m)-0.14%
EPS NQ rev (3m)-0.48%
EPS NY rev (1m)-0.14%
EPS NY rev (3m)-0.04%
Revenue NQ rev (1m)0.01%
Revenue NQ rev (3m)0.08%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)0.05%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.18 | ||
| Fwd PE | 24.43 | ||
| P/S | 4.92 | ||
| P/FCF | 39.5 | ||
| P/OCF | 31.97 | ||
| P/B | 6.96 | ||
| P/tB | N/A | ||
| EV/EBITDA | 23.36 |
EPS(TTM)11.57
EY3.43%
EPS(NY)13.82
Fwd EY4.09%
FCF(TTM)8.55
FCFY2.53%
OCF(TTM)10.56
OCFY3.13%
SpS68.57
BVpS48.51
TBVpS-5.4
PEG (NY)2.35
PEG (5Y)2.13
Graham Number112.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.66% | ||
| ROE | 20.84% | ||
| ROCE | 16.1% | ||
| ROIC | 13.15% | ||
| ROICexc | 13.39% | ||
| ROICexgc | 40.27% | ||
| OM | 18.84% | ||
| PM (TTM) | 14.74% | ||
| GM | 38.1% | ||
| FCFM | 12.47% |
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%
ROICexgc growth 3Y6.49%
ROICexgc 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 Turnover0.66
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.51 | ||
| Debt/FCF | 3.21 | ||
| Debt/EBITDA | 1.59 | ||
| Cap/Depr | 79.39% | ||
| Cap/Sales | 2.94% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 68.33% | ||
| Profit Quality | 84.54% | ||
| Current Ratio | 1.28 | ||
| Quick Ratio | 0.79 | ||
| Altman-Z | 5.1 |
F-Score8
WACC7.8%
ROIC/WACC1.69
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)9.98%
EPS 3Y17.66%
EPS 5Y13.71%
EPS Q2Q%8.1%
EPS Next Y12.42%
EPS Next 2Y13.13%
EPS Next 3Y13.17%
EPS Next 5Y10.78%
Revenue 1Y (TTM)8.24%
Revenue growth 3Y8.22%
Revenue growth 5Y3.07%
Sales Q2Q%10.13%
Revenue Next Year10.02%
Revenue Next 2Y9.89%
Revenue Next 3Y9.49%
Revenue Next 5Y9.21%
EBIT growth 1Y9.02%
EBIT growth 3Y24.68%
EBIT growth 5Y10.68%
EBIT Next Year25%
EBIT Next 3Y16.77%
EBIT Next 5Y12.95%
FCF growth 1Y19.04%
FCF growth 3Y30.36%
FCF growth 5Y4.2%
OCF growth 1Y16.8%
OCF growth 3Y25.99%
OCF growth 5Y4.62%
EATON CORP PLC / ETN FAQ
Can you provide the ChartMill fundamental rating for EATON CORP PLC?
ChartMill assigns a fundamental rating of 6 / 10 to ETN.
Can you provide the valuation status for EATON CORP PLC?
ChartMill assigns a valuation rating of 4 / 10 to EATON CORP PLC (ETN). This can be considered as Fairly Valued.
How profitable is EATON CORP PLC (ETN) stock?
EATON CORP PLC (ETN) has a profitability rating of 9 / 10.
What is the financial health of EATON CORP PLC (ETN) stock?
The financial health rating of EATON CORP PLC (ETN) is 5 / 10.
How sustainable is the dividend of EATON CORP PLC (ETN) stock?
The dividend rating of EATON CORP PLC (ETN) is 6 / 10 and the dividend payout ratio is 40.54%.