GENERAL ELECTRIC (GE) Stock Fundamental Analysis
NYSE:GE - New York Stock Exchange, Inc. - US3696041033 - Common Stock - Currency: USD
GE gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 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.
The reported net income has been mixed in the past 5 years: GE reported negative net income in multiple years.
Each year in the past 5 years GE had a positive operating cash flow.
1.2 Ratios
GE has a better Return On Assets (5.32%) than 66.67% of its industry peers.
The Return On Equity of GE (33.90%) is better than 96.83% of its industry peers.
GE has a Return On Invested Capital (5.81%) which is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for GE is below the industry average of 7.99%.
The 3 year average ROIC (3.35%) for GE is below the current ROIC(5.81%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.32% | ||
| ROE | 33.9% | ||
| ROIC | 5.81% |
ROA(3y)3.53%
ROA(5y)1.83%
ROE(3y)22.42%
ROE(5y)12.94%
ROIC(3y)3.35%
ROIC(5y)N/A
1.3 Margins
With an excellent Profit Margin value of 16.94%, GE belongs to the best of the industry, outperforming 92.06% of the companies in the same industry.
GE has a better Operating Margin (14.99%) than 87.30% of its industry peers.
In the last couple of years the Operating Margin of GE has grown nicely.
GE has a better Gross Margin (34.71%) than 77.78% of its industry peers.
In the last couple of years the Gross Margin of GE has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.99% | ||
| PM (TTM) | 16.94% | ||
| GM | 34.71% |
OM growth 3Y59.2%
OM growth 5Y30.84%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y10.91%
GM growth 5Y6.44%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), GE is destroying value.
Compared to 1 year ago, GE has less shares outstanding
The number of shares outstanding for GE has been reduced compared to 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 2.70. 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.
With a Altman-Z score value of 2.70, GE perfoms like the industry average, outperforming 42.86% of the companies in the same industry.
GE has a debt to FCF ratio of 5.24. This is a neutral value as GE would need 5.24 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 5.24, GE is in the better half of the industry, outperforming 71.43% of the companies in the same industry.
A Debt/Equity ratio of 0.89 indicates that GE is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.89, GE is doing worse than 74.60% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.89 | ||
| Debt/FCF | 5.24 | ||
| Altman-Z | 2.7 |
ROIC/WACC0.63
WACC9.25%
2.3 Liquidity
A Current Ratio of 1.09 indicates that GE should not have too much problems paying its short term obligations.
GE has a Current ratio of 1.09. This is amonst the worse of the industry: GE underperforms 80.95% of its industry peers.
A Quick Ratio of 0.81 indicates that GE may have some problems paying its short term obligations.
With a Quick ratio value of 0.81, GE is not doing good in the industry: 77.78% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.81 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 60.36% over the past year.
The Earnings Per Share has been decreasing by -1.65% on average over the past years.
The Revenue for GE has decreased by -43.05% in the past year. This is quite bad
The Revenue for GE have been decreasing by -15.57% on average. This is quite bad
EPS 1Y (TTM)60.36%
EPS 3Y28.22%
EPS 5Y-1.65%
EPS Q2Q%28.16%
Revenue 1Y (TTM)-43.05%
Revenue growth 3Y-19.5%
Revenue growth 5Y-15.57%
Sales Q2Q%-49.14%
3.2 Future
The Earnings Per Share is expected to grow by 12.63% on average over the next years. This is quite good.
The Revenue is expected to grow by 8.57% on average over the next years. This is quite good.
EPS Next Y24.82%
EPS Next 2Y21.77%
EPS Next 3Y19.74%
EPS Next 5Y12.63%
Revenue Next Year13.52%
Revenue Next 2Y12.14%
Revenue Next 3Y11.06%
Revenue Next 5Y8.57%
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
GE is valuated quite expensively with a Price/Earnings ratio of 44.98.
The rest of the industry has a similar Price/Earnings ratio as GE.
When comparing the Price/Earnings ratio of GE to the average of the S&P500 Index (29.75), we can say GE is valued expensively.
Based on the Price/Forward Earnings ratio of 36.04, the valuation of GE can be described as expensive.
GE's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of GE to the average of the S&P500 Index (22.44), we can say GE is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 44.98 | ||
| Fwd PE | 36.04 |
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 61.90% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 58.93 | ||
| EV/EBITDA | 32.33 |
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 decent profitability rating of GE may justify a higher PE ratio.
A more expensive valuation may be justified as GE's earnings are expected to grow with 19.74% in the coming years.
PEG (NY)1.81
PEG (5Y)N/A
EPS Next 2Y21.77%
EPS Next 3Y19.74%
5. Dividend
5.1 Amount
GE has a yearly dividend return of 0.71%, which is pretty low.
GE's Dividend Yield is a higher than the industry average which is at 1.43.
Compared to an average S&P500 Dividend Yield of 2.30, GE's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.71% |
5.2 History
The dividend of GE is nicely growing with an annual growth rate of 9.39%!
GE has paid a dividend for at least 10 years, which is 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
15.38% of the earnings are spent on dividend by GE. This is a low number and sustainable payout ratio.
GE's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP15.38%
EPS Next 2Y21.77%
EPS Next 3Y19.74%
201.96
-5.02 (-2.43%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners80.08%
Inst Owner Change0.9%
Ins Owners0.17%
Ins Owner Change0.27%
Market Cap216.76B
Analysts84.29
Price Target232.64 (15.19%)
Short Float %1.07%
Short Ratio2.06
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.71% |
Yearly Dividend0.93
Dividend Growth(5Y)9.39%
DP15.38%
Div Incr Years2
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)10.64%
Min EPS beat(2)-1.74%
Max EPS beat(2)23.03%
EPS beat(4)3
Avg EPS beat(4)15.25%
Min EPS beat(4)-1.74%
Max EPS beat(4)23.03%
EPS beat(8)7
Avg EPS beat(8)30.95%
EPS beat(12)11
Avg EPS beat(12)36.32%
EPS beat(16)15
Avg EPS beat(16)38.58%
Revenue beat(2)1
Avg Revenue beat(2)-1.45%
Min Revenue beat(2)-3.77%
Max Revenue beat(2)0.87%
Revenue beat(4)1
Avg Revenue beat(4)-2.82%
Min Revenue beat(4)-5.66%
Max Revenue beat(4)0.87%
Revenue beat(8)5
Avg Revenue beat(8)2.18%
Revenue beat(12)5
Avg Revenue beat(12)-4.86%
Revenue beat(16)5
Avg Revenue beat(16)-5.04%
PT rev (1m)0.68%
PT rev (3m)8.43%
EPS NQ rev (1m)0.52%
EPS NQ rev (3m)7.96%
EPS NY rev (1m)1.06%
EPS NY rev (3m)3.74%
Revenue NQ rev (1m)-0.19%
Revenue NQ rev (3m)0.44%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)0.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 44.98 | ||
| Fwd PE | 36.04 | ||
| P/S | 5.6 | ||
| P/FCF | 58.93 | ||
| P/OCF | 46.02 | ||
| P/B | 11.21 | ||
| P/tB | 33.11 | ||
| EV/EBITDA | 32.33 |
EPS(TTM)4.49
EY2.22%
EPS(NY)5.6
Fwd EY2.78%
FCF(TTM)3.43
FCFY1.7%
OCF(TTM)4.39
OCFY2.17%
SpS36.06
BVpS18.02
TBVpS6.1
PEG (NY)1.81
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.32% | ||
| ROE | 33.9% | ||
| ROCE | 6.54% | ||
| ROIC | 5.81% | ||
| ROICexc | 6.96% | ||
| ROICexgc | 8.41% | ||
| OM | 14.99% | ||
| PM (TTM) | 16.94% | ||
| GM | 34.71% | ||
| FCFM | 9.5% |
ROA(3y)3.53%
ROA(5y)1.83%
ROE(3y)22.42%
ROE(5y)12.94%
ROIC(3y)3.35%
ROIC(5y)N/A
ROICexc(3y)4.01%
ROICexc(5y)N/A
ROICexgc(3y)4.76%
ROICexgc(5y)N/A
ROCE(3y)3.77%
ROCE(5y)N/A
ROICexcg growth 3Y41.98%
ROICexcg growth 5Y24.01%
ROICexc growth 3Y50.02%
ROICexc growth 5Y26.63%
OM growth 3Y59.2%
OM growth 5Y30.84%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y10.91%
GM growth 5Y6.44%
F-Score5
Asset Turnover0.31
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.89 | ||
| Debt/FCF | 5.24 | ||
| Debt/EBITDA | 2.47 | ||
| Cap/Depr | 87.16% | ||
| Cap/Sales | 2.67% | ||
| Interest Coverage | 5.99 | ||
| Cash Conversion | 67.42% | ||
| Profit Quality | 56.1% | ||
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.81 | ||
| Altman-Z | 2.7 |
F-Score5
WACC9.25%
ROIC/WACC0.63
Cap/Depr(3y)67.38%
Cap/Depr(5y)59.46%
Cap/Sales(3y)2.35%
Cap/Sales(5y)2.23%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)60.36%
EPS 3Y28.22%
EPS 5Y-1.65%
EPS Q2Q%28.16%
EPS Next Y24.82%
EPS Next 2Y21.77%
EPS Next 3Y19.74%
EPS Next 5Y12.63%
Revenue 1Y (TTM)-43.05%
Revenue growth 3Y-19.5%
Revenue growth 5Y-15.57%
Sales Q2Q%-49.14%
Revenue Next Year13.52%
Revenue Next 2Y12.14%
Revenue Next 3Y11.06%
Revenue Next 5Y8.57%
EBIT growth 1Y80.92%
EBIT growth 3Y28.15%
EBIT growth 5Y10.46%
EBIT Next Year36.56%
EBIT Next 3Y20.11%
EBIT Next 5Y13.11%
FCF growth 1Y-15.02%
FCF growth 3Y23.11%
FCF growth 5Y-10.02%
OCF growth 1Y-9.25%
OCF growth 3Y12.23%
OCF growth 5Y-11.62%