GENERAL ELECTRIC (GE) Stock Fundamental Analysis
NYSE:GE - New York Stock Exchange, Inc. - US3696041033 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to GE. GE was compared to 65 industry peers in the Aerospace & Defense industry. GE has an excellent profitability rating, but there are concerns on its financial health. GE is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year GE was profitable.
GE had a positive operating cash flow in the past year.
GE had positive earnings in 4 of the past 5 years.
Each year in the past 5 years GE had a positive operating cash flow.
1.2 Ratios
The Return On Assets of GE (5.64%) is better than 70.77% of its industry peers.
With an excellent Return On Equity value of 36.34%, GE belongs to the best of the industry, outperforming 98.46% of the companies in the same industry.
GE's Return On Invested Capital of 6.47% is in line compared to the rest of the industry. GE outperforms 60.00% of its industry peers.
GE had an Average Return On Invested Capital over the past 3 years of 3.20%. This is significantly below the industry average of 8.44%.
The last Return On Invested Capital (6.47%) for GE is above the 3 year average (3.20%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.64% | ||
| ROE | 36.34% | ||
| ROIC | 6.47% |
ROA(3y)3.55%
ROA(5y)1.86%
ROE(3y)22.52%
ROE(5y)13.1%
ROIC(3y)3.2%
ROIC(5y)N/A
1.3 Margins
With an excellent Profit Margin value of 17.63%, GE belongs to the best of the industry, outperforming 98.46% of the companies in the same industry.
GE has a better Operating Margin (16.35%) than 87.69% of its industry peers.
In the last couple of years the Operating Margin of GE has grown nicely.
With a decent Gross Margin value of 35.83%, GE is doing good in the industry, outperforming 73.85% of the companies in the same industry.
In the last couple of years the Gross Margin of GE has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.35% | ||
| PM (TTM) | 17.63% | ||
| GM | 35.83% |
OM growth 3Y396.9%
OM growth 5Y30.84%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y18.73%
GM growth 5Y6.44%
2. Health
2.1 Basic Checks
GE has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
GE has less shares outstanding than it did 1 year ago.
GE has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, GE has a worse debt to assets ratio.
2.2 Solvency
GE has an Altman-Z score of 2.95. This is not the best score and indicates that GE is in the grey zone with still only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.95, GE is in line with its industry, outperforming 47.69% of the companies in the same industry.
GE has a debt to FCF ratio of 4.44. This is a neutral value as GE would need 4.44 years to pay back of all of its debts.
GE's Debt to FCF ratio of 4.44 is fine compared to the rest of the industry. GE outperforms 73.85% of its industry peers.
A Debt/Equity ratio of 0.91 indicates that GE is somewhat dependend on debt financing.
GE's Debt to Equity ratio of 0.91 is on the low side compared to the rest of the industry. GE is outperformed by 69.23% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.91 | ||
| Debt/FCF | 4.44 | ||
| Altman-Z | 2.95 |
ROIC/WACC0.63
WACC10.32%
2.3 Liquidity
GE has a Current Ratio of 1.08. This is a normal value and indicates that GE is financially healthy and should not expect problems in meeting its short term obligations.
GE has a worse Current ratio (1.08) than 81.54% of its industry peers.
GE has a Quick Ratio of 1.08. This is a bad value and indicates that GE is not financially healthy enough and could expect problems in meeting its short term obligations.
GE has a worse Quick ratio (0.77) than 78.46% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.08 | ||
| Quick Ratio | 0.77 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 54.03% over the past year.
GE shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -1.65% yearly.
The Revenue has grown by 8.81% in the past year. This is quite good.
The Revenue for GE have been decreasing by -15.57% on average. This is quite bad
EPS 1Y (TTM)54.03%
EPS 3Y28.22%
EPS 5Y-1.65%
EPS Q2Q%81.71%
Revenue 1Y (TTM)8.81%
Revenue growth 3Y-11.83%
Revenue growth 5Y-15.57%
Sales Q2Q%-40.68%
3.2 Future
The Earnings Per Share is expected to grow by 16.46% on average over the next years. This is quite good.
Based on estimates for the next years, GE will show a quite strong growth in Revenue. The Revenue will grow by 9.70% on average per year.
EPS Next Y27.6%
EPS Next 2Y22%
EPS Next 3Y20.12%
EPS Next 5Y16.46%
Revenue Next Year14.17%
Revenue Next 2Y12.39%
Revenue Next 3Y11.29%
Revenue Next 5Y9.7%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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
A Price/Earnings ratio of 48.19 indicates a quite expensive valuation of GE.
Compared to the rest of the industry, the Price/Earnings ratio of GE is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 27.29. GE is valued rather expensively when compared to this.
Based on the Price/Forward Earnings ratio of 37.20, the valuation of GE can be described as expensive.
GE's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 21.74. GE is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 48.19 | ||
| Fwd PE | 37.2 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of GE is on the same level as its industry peers.
Based on the Price/Free Cash Flow ratio, GE is valued a bit cheaper than the industry average as 61.54% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 60.14 | ||
| EV/EBITDA | 36.04 |
4.3 Compensation for Growth
GE's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
GE has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as GE's earnings are expected to grow with 20.12% in the coming years.
PEG (NY)1.75
PEG (5Y)N/A
EPS Next 2Y22%
EPS Next 3Y20.12%
5. Dividend
5.1 Amount
With a yearly dividend of 0.58%, GE is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.24, GE pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.37, GE's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.58% |
5.2 History
The dividend of GE is nicely growing with an annual growth rate of 9.39%!
GE has been paying a dividend for at least 10 years, so it has a reliable track record.
GE has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)9.39%
Div Incr Years2
Div Non Decr Years4
5.3 Sustainability
GE pays out 17.50% of its income as dividend. This is a sustainable payout ratio.
GE's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP17.5%
EPS Next 2Y22%
EPS Next 3Y20.12%
248.65
+1.77 (+0.72%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners79.98%
Inst Owner Change0%
Ins Owners0.15%
Ins Owner Change0.53%
Market Cap265.16B
Analysts82.86
Price Target250.86 (0.89%)
Short Float %1.2%
Short Ratio1.96
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.58% |
Yearly Dividend0.93
Dividend Growth(5Y)9.39%
DP17.5%
Div Incr Years2
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)18.35%
Min EPS beat(2)13.68%
Max EPS beat(2)23.03%
EPS beat(4)3
Avg EPS beat(4)13.3%
Min EPS beat(4)-1.74%
Max EPS beat(4)23.03%
EPS beat(8)7
Avg EPS beat(8)21.19%
EPS beat(12)11
Avg EPS beat(12)35.48%
EPS beat(16)15
Avg EPS beat(16)32.75%
Revenue beat(2)1
Avg Revenue beat(2)-1.05%
Min Revenue beat(2)-2.98%
Max Revenue beat(2)0.87%
Revenue beat(4)1
Avg Revenue beat(4)-2.88%
Min Revenue beat(4)-5.66%
Max Revenue beat(4)0.87%
Revenue beat(8)4
Avg Revenue beat(8)1.15%
Revenue beat(12)4
Avg Revenue beat(12)-19.58%
Revenue beat(16)4
Avg Revenue beat(16)-22.45%
PT rev (1m)9.33%
PT rev (3m)6.8%
EPS NQ rev (1m)-0.15%
EPS NQ rev (3m)6.31%
EPS NY rev (1m)0.48%
EPS NY rev (3m)2.23%
Revenue NQ rev (1m)0.07%
Revenue NQ rev (3m)1.46%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)0.45%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 48.19 | ||
| Fwd PE | 37.2 | ||
| P/S | 6.68 | ||
| P/FCF | 60.14 | ||
| P/OCF | 50.72 | ||
| P/B | 13.77 | ||
| P/tB | 42.24 | ||
| EV/EBITDA | 36.04 |
EPS(TTM)5.16
EY2.08%
EPS(NY)6.68
Fwd EY2.69%
FCF(TTM)4.13
FCFY1.66%
OCF(TTM)4.9
OCFY1.97%
SpS37.21
BVpS18.05
TBVpS5.89
PEG (NY)1.75
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.64% | ||
| ROE | 36.34% | ||
| ROCE | 7.28% | ||
| ROIC | 6.47% | ||
| ROICexc | 7.62% | ||
| ROICexgc | 9.19% | ||
| OM | 16.35% | ||
| PM (TTM) | 17.63% | ||
| GM | 35.83% | ||
| FCFM | 11.11% |
ROA(3y)3.55%
ROA(5y)1.86%
ROE(3y)22.52%
ROE(5y)13.1%
ROIC(3y)3.2%
ROIC(5y)N/A
ROICexc(3y)3.81%
ROICexc(5y)N/A
ROICexgc(3y)4.52%
ROICexgc(5y)N/A
ROCE(3y)3.6%
ROCE(5y)N/A
ROICexcg growth 3Y385.39%
ROICexcg growth 5Y24.01%
ROICexc growth 3Y412.86%
ROICexc growth 5Y26.63%
OM growth 3Y396.9%
OM growth 5Y30.84%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y18.73%
GM growth 5Y6.44%
F-Score6
Asset Turnover0.32
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.91 | ||
| Debt/FCF | 4.44 | ||
| Debt/EBITDA | 2.35 | ||
| Cap/Depr | 85.31% | ||
| Cap/Sales | 2.06% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 70.18% | ||
| Profit Quality | 63.03% | ||
| Current Ratio | 1.08 | ||
| Quick Ratio | 0.77 | ||
| Altman-Z | 2.95 |
F-Score6
WACC10.32%
ROIC/WACC0.63
Cap/Depr(3y)67.38%
Cap/Depr(5y)59.46%
Cap/Sales(3y)3.4%
Cap/Sales(5y)2.98%
Profit Quality(3y)3112.18%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)54.03%
EPS 3Y28.22%
EPS 5Y-1.65%
EPS Q2Q%81.71%
EPS Next Y27.6%
EPS Next 2Y22%
EPS Next 3Y20.12%
EPS Next 5Y16.46%
Revenue 1Y (TTM)8.81%
Revenue growth 3Y-11.83%
Revenue growth 5Y-15.57%
Sales Q2Q%-40.68%
Revenue Next Year14.17%
Revenue Next 2Y12.39%
Revenue Next 3Y11.29%
Revenue Next 5Y9.7%
EBIT growth 1Y61.62%
EBIT growth 3Y338.1%
EBIT growth 5Y10.46%
EBIT Next Year36.34%
EBIT Next 3Y19.37%
EBIT Next 5Y13.76%
FCF growth 1Y-8.05%
FCF growth 3Y23.11%
FCF growth 5Y-10.02%
OCF growth 1Y-15.88%
OCF growth 3Y12.23%
OCF growth 5Y-11.62%