EATON CORP PLC (ETN) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ETN - IE00B8KQN827 - Common Stock
324.51 USD
+3.93 (+1.23%)
324.96 USD
+0.45 (+0.14%)
Overall ETN gets a fundamental rating of 7 out of 10. We evaluated ETN against 91 industry peers in the Electrical Equipment industry. ETN scores excellent points on both the profitability and health parts. This is a solid base for a good stock. ETN is not valued too expensively and it also shows a decent growth rate. These ratings could make ETN a good candidate for 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.
Each year in the past 5 years ETN has been profitable.
ETN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of ETN (9.66%) is better than 91.21% of its industry peers.
ETN has a Return On Equity of 20.84%. This is amongst the best in the industry. ETN outperforms 92.31% 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 92.31% 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 9.90%.
The last Return On Invested Capital (13.15%) for ETN is above the 3 year average (10.83%), which is a sign of increasing profitability.
| 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
ETN's Profit Margin of 14.74% is amongst the best of the industry. ETN outperforms 89.01% of its industry peers.
In the last couple of years the Profit Margin of ETN has grown nicely.
ETN has a Operating Margin of 18.84%. This is amongst the best in the industry. ETN outperforms 93.41% of its industry peers.
ETN's Operating Margin has improved in the last couple of years.
The Gross Margin of ETN (38.10%) is better than 86.81% 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
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 less shares outstanding
The number of shares outstanding for ETN has been reduced compared to 5 years ago.
Compared to 1 year ago, ETN has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.92 indicates that ETN is not in any danger for bankruptcy at the moment.
The Altman-Z score of ETN (4.92) is better than 76.92% of its industry peers.
ETN has a debt to FCF ratio of 3.21. This is a good value and a sign of high solvency as ETN would need 3.21 years to pay back of all of its debts.
ETN's Debt to FCF ratio of 3.21 is amongst the best of the industry. ETN outperforms 81.32% of its industry peers.
ETN has a Debt/Equity ratio of 0.51. This is a neutral value indicating ETN is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.51, ETN is in line with its industry, outperforming 50.55% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.51 | ||
| Debt/FCF | 3.21 | ||
| Altman-Z | 4.92 |
ROIC/WACC1.66
WACC7.91%
2.3 Liquidity
ETN has a Current Ratio of 1.28. 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 Current ratio of 1.28 is on the low side compared to the rest of the industry. ETN is outperformed by 63.74% of its industry peers.
ETN has a Quick Ratio of 1.28. 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 0.79 is on the low side compared to the rest of the industry. ETN is outperformed by 63.74% 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 | 1.28 | ||
| 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.
The Revenue has grown by 8.24% 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 3.07% yearly.
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
Based on estimates for the next years, ETN will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.78% on average per year.
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 2Y13.03%
EPS Next 3Y13.17%
EPS Next 5Y10.78%
Revenue Next Year10.01%
Revenue Next 2Y9.82%
Revenue Next 3Y9.55%
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
Based on the Price/Earnings ratio of 28.05, the valuation of ETN can be described as expensive.
Based on the Price/Earnings ratio, ETN is valued a bit cheaper than the industry average as 78.02% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of ETN to the average of the S&P500 Index (27.19), we can say ETN is valued inline with the index average.
ETN is valuated rather expensively with a Price/Forward Earnings ratio of 23.52.
Based on the Price/Forward Earnings ratio, ETN is valued a bit cheaper than 75.82% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.88. ETN is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.05 | ||
| Fwd PE | 23.52 |
4.2 Price Multiples
75.82% of the companies in the same industry are more expensive than ETN, based on the Enterprise Value to EBITDA ratio.
73.63% 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 | 37.96 | ||
| EV/EBITDA | 22.26 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ETN does not grow enough to justify the current Price/Earnings ratio.
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 13.17% in the coming years.
PEG (NY)2.26
PEG (5Y)2.05
EPS Next 2Y13.03%
EPS Next 3Y13.17%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.31%, ETN has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 0.28, ETN pays a better dividend. On top of this ETN pays more dividend than 92.31% of the companies listed in the same industry.
ETN's Dividend Yield is slightly below the S&P500 average, which is at 1.94.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.31% |
5.2 History
The dividend of ETN has a limited annual growth rate of 5.70%.
ETN has paid a dividend for at least 10 years, which is 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 40.54% of its income as dividend. This is a bit on the high side, but may be sustainable.
ETN's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP40.54%
EPS Next 2Y13.03%
EPS Next 3Y13.17%
324.51
+3.93 (+1.23%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryElectrical Equipment
Earnings (Last)
Earnings (Next)
Inst Owners85.75%
Inst Owner Change0%
Ins Owners0.04%
Ins Owner Change-0.1%
Market Cap126.04B
Revenue(TTM)26.63B
Net Income(TTM)3.93B
Analysts78.24
Price Target405.2 (24.87%)
Short Float %1.79%
Short Ratio2.4
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.31% |
Yearly Dividend3.79
Dividend Growth(5Y)5.7%
DP40.54%
Div Incr Years15
Div Non Decr Years34
Ex-DateN/A
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)-0.62%
PT rev (3m)1.77%
EPS NQ rev (1m)-0.24%
EPS NQ rev (3m)-0.76%
EPS NY rev (1m)0.01%
EPS NY rev (3m)-0.16%
Revenue NQ rev (1m)-0.14%
Revenue NQ rev (3m)-0.07%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)0.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.05 | ||
| Fwd PE | 23.52 | ||
| P/S | 4.73 | ||
| P/FCF | 37.96 | ||
| P/OCF | 30.73 | ||
| P/B | 6.69 | ||
| P/tB | N/A | ||
| EV/EBITDA | 22.26 |
EPS(TTM)11.57
EY3.57%
EPS(NY)13.8
Fwd EY4.25%
FCF(TTM)8.55
FCFY2.63%
OCF(TTM)10.56
OCFY3.25%
SpS68.57
BVpS48.51
TBVpS-5.4
PEG (NY)2.26
PEG (5Y)2.05
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 | 4.92 |
F-Score8
WACC7.91%
ROIC/WACC1.66
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 2Y13.03%
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 Year10.01%
Revenue Next 2Y9.82%
Revenue Next 3Y9.55%
Revenue Next 5Y9.21%
EBIT growth 1Y9.02%
EBIT growth 3Y24.68%
EBIT growth 5Y10.68%
EBIT Next Year25.01%
EBIT Next 3Y16.66%
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 7 / 10 to ETN.
What is the valuation status of EATON CORP PLC (ETN) stock?
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.
Can you provide the PE and PB ratios for ETN stock?
The Price/Earnings (PE) ratio for EATON CORP PLC (ETN) is 28.05 and the Price/Book (PB) ratio is 6.69.
What is the earnings growth outlook for EATON CORP PLC?
The Earnings per Share (EPS) of EATON CORP PLC (ETN) is expected to grow by 12.42% in the next year.