EATON CORP PLC (ETN) Stock Fundamental Analysis
NYSE:ETN - New York Stock Exchange, Inc. - IE00B8KQN827 - Common Stock
Overall ETN gets a fundamental rating of 7 out of 10. We evaluated ETN against 93 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! ETN also has an excellent dividend rating. This makes ETN very considerable for dividend and growth 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.
Each year in the past 5 years ETN has been profitable.
In the past 5 years ETN always reported a positive cash flow from operatings.
1.2 Ratios
ETN's Return On Assets of 9.60% is amongst the best of the industry. ETN outperforms 92.31% of its industry peers.
Looking at the Return On Equity, with a value of 19.71%, ETN belongs to the top of the industry, outperforming 92.31% 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 91.21% 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 10.46%.
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
Looking at the Profit Margin, with a value of 15.31%, ETN belongs to the top of the industry, outperforming 94.51% of the companies in the same industry.
ETN's Profit Margin has improved in the last couple of years.
ETN has a better Operating Margin (18.71%) than 94.51% of its industry peers.
In the last couple of years the Operating Margin of ETN has grown nicely.
Looking at the Gross Margin, with a value of 37.83%, ETN belongs to the top of the industry, outperforming 89.01% 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ETN is creating value.
Compared to 1 year ago, ETN has more shares outstanding
ETN has less shares outstanding than it did 5 years ago.
The debt/assets ratio for ETN has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 5.59 indicates that ETN is not in any danger for bankruptcy at the moment.
ETN has a Altman-Z score of 5.59. This is amongst the best in the industry. ETN outperforms 85.71% 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.
Looking at the Debt to FCF ratio, with a value of 2.91, ETN is in the better half of the industry, outperforming 76.92% of the companies in the same industry.
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 43.96% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 2.91 | ||
| Altman-Z | 5.59 |
ROIC/WACC1.81
WACC6.88%
2.3 Liquidity
A Current Ratio of 1.53 indicates that ETN should not have too much problems paying its short term obligations.
ETN has a Current ratio of 1.53. This is in the lower half of the industry: ETN underperforms 60.44% 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.
ETN's Quick ratio of 1.00 is on the low side compared to the rest of the industry. ETN is outperformed by 61.54% of its industry peers.
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
ETN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 22.04%, which is quite impressive.
ETN shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.11% yearly.
The Revenue has grown by 8.81% in the past year. This is quite good.
Measured over the past years, ETN shows a small growth in Revenue. The Revenue has been growing by 1.43% on average per year.
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
The Earnings Per Share is expected to grow by 14.03% on average over the next years. This is quite good.
Based on estimates for the next years, ETN will show a quite strong growth in Revenue. The Revenue will grow by 9.25% on average per year.
EPS Next Y19.68%
EPS Next 2Y15.41%
EPS Next 3Y14.45%
EPS Next 5Y14.03%
Revenue Next Year8.17%
Revenue Next 2Y7.98%
Revenue Next 3Y7.8%
Revenue Next 5Y9.25%
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.
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
Based on the Price/Earnings ratio of 34.00, 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 72.53% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.29, ETN is valued a bit more expensive.
Based on the Price/Forward Earnings ratio of 29.47, the valuation of ETN can be described as expensive.
Based on the Price/Forward Earnings ratio, ETN is valued a bit cheaper than the industry average as 73.63% of the companies are valued more expensively.
ETN is valuated rather expensively when we compare the Price/Forward Earnings ratio to 24.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34 | ||
| Fwd PE | 29.47 |
4.2 Price Multiples
ETN's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ETN is cheaper than 70.33% 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 73.63% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 43.72 | ||
| EV/EBITDA | 25.85 |
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 14.45% in the coming years.
PEG (NY)1.73
PEG (5Y)3.06
EPS Next 2Y15.41%
EPS Next 3Y14.45%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.09%, 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 3.40. ETN pays more dividend than 87.91% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.28, ETN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.09% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)5.4%
Div Incr Years15
Div Non Decr Years34
5.3 Sustainability
39.12% of the earnings are spent on dividend by ETN. This is a low number and sustainable payout ratio.
The dividend of ETN is growing, but earnings are growing more, so the dividend growth is sustainable.
DP39.12%
EPS Next 2Y15.41%
EPS Next 3Y14.45%
EATON CORP PLC
NYSE:ETN (1/21/2025, 8:04:00 PM)
After market: 359 +1.37 (+0.38%)357.63
+11.35 (+3.28%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryElectrical Equipment
Earnings (Last)
Earnings (Next)
Inst Owners86.21%
Inst Owner Change-0.03%
Ins Owners0.07%
Ins Owner Change-4.6%
Market Cap141.34B
Analysts77.58
Price Target394.34 (10.26%)
Short Float %1.29%
Short Ratio2.51
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.09% |
Yearly Dividend3.46
Dividend Growth(5Y)5.4%
DP39.12%
Div Incr Years15
Div Non Decr Years34
Ex-DateN/A
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)3.34%
PT rev (3m)11.72%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.34%
EPS NY rev (1m)0%
EPS NY rev (3m)1.51%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.32%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)-0.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34 | ||
| Fwd PE | 29.47 | ||
| P/S | 5.74 | ||
| P/FCF | 43.72 | ||
| P/OCF | 35.08 | ||
| P/B | 7.39 | ||
| P/tB | N/A | ||
| EV/EBITDA | 25.85 |
EPS(TTM)10.52
EY2.94%
EPS(NY)12.13
Fwd EY3.39%
FCF(TTM)8.18
FCFY2.29%
OCF(TTM)10.19
OCFY2.85%
SpS62.26
BVpS48.37
TBVpS-1.86
PEG (NY)1.73
PEG (5Y)3.06
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 | 5.59 |
F-Score8
WACC6.88%
ROIC/WACC1.81
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 2Y15.41%
EPS Next 3Y14.45%
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 2Y7.98%
Revenue Next 3Y7.8%
Revenue Next 5Y9.25%
EBIT growth 1Y22.49%
EBIT growth 3Y33.45%
EBIT growth 5Y6.03%
EBIT Next Year37.32%
EBIT Next 3Y19.71%
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%