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 64 industry peers in the Aerospace & Defense industry. While GE has a great profitability rating, there are quite some concerns on its financial health. While showing a medium growth rate, GE is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
GE had positive earnings in the past year.
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.
GE had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 5.32%, GE is in the better half of the industry, outperforming 68.75% of the companies in the same industry.
Looking at the Return On Equity, with a value of 33.90%, GE belongs to the top of the industry, outperforming 98.44% of the companies in the same industry.
With a Return On Invested Capital value of 5.81%, GE perfoms like the industry average, outperforming 57.81% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for GE is below the industry average of 7.79%.
The last Return On Invested Capital (5.81%) for GE is above the 3 year average (3.35%), which is a sign of increasing profitability.
| 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
Looking at the Profit Margin, with a value of 16.94%, GE belongs to the top of the industry, outperforming 95.31% of the companies in the same industry.
GE has a Operating Margin of 14.99%. This is amongst the best in the industry. GE outperforms 87.50% of its industry peers.
GE's Operating Margin has improved in the last couple of years.
GE has a Gross Margin of 34.71%. This is in the better half of the industry: GE outperforms 73.44% of its industry peers.
GE's Gross Margin has improved in the last couple of years.
| 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.
The number of shares outstanding for GE has been reduced compared to 1 year ago.
The number of shares outstanding for GE has been reduced compared to 5 years ago.
GE has a worse debt/assets ratio than last year.
2.2 Solvency
GE has an Altman-Z score of 2.54. 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.
GE has a Altman-Z score of 2.54. This is comparable to the rest of the industry: GE outperforms 45.31% of its industry peers.
The Debt to FCF ratio of GE is 5.24, which is a neutral value as it means it would take GE, 5.24 years of fcf income to pay off all of its debts.
GE has a better Debt to FCF ratio (5.24) than 75.00% of its industry peers.
A Debt/Equity ratio of 0.89 indicates that GE is somewhat dependend on debt financing.
GE has a Debt to Equity ratio of 0.89. This is in the lower half of the industry: GE underperforms 70.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.89 | ||
| Debt/FCF | 5.24 | ||
| Altman-Z | 2.54 |
ROIC/WACC0.6
WACC9.67%
2.3 Liquidity
A Current Ratio of 1.09 indicates that GE should not have too much problems paying its short term obligations.
With a Current ratio value of 1.09, GE is not doing good in the industry: 79.69% of the companies in the same industry are doing better.
A Quick Ratio of 0.81 indicates that GE may have some problems paying its short term obligations.
GE has a worse Quick ratio (0.81) than 76.56% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.81 |
3. Growth
3.1 Past
GE shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 60.36%, which is quite impressive.
GE shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -1.65% yearly.
GE shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -43.05%.
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
Based on estimates for the next years, GE will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.13% on average per year.
GE is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.14% yearly.
EPS Next Y24.82%
EPS Next 2Y21.77%
EPS Next 3Y19.74%
EPS Next 5Y15.13%
Revenue Next Year13.64%
Revenue Next 2Y12.18%
Revenue Next 3Y11.17%
Revenue Next 5Y9.14%
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 40.49 indicates a quite expensive valuation of GE.
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 (28.29), we can say GE is valued slightly more expensively.
GE is valuated quite expensively with a Price/Forward Earnings ratio of 32.44.
GE's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.08, GE is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 40.49 | ||
| Fwd PE | 32.44 |
4.2 Price Multiples
GE's Enterprise Value to EBITDA is on the same level as the industry average.
GE's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 52.72 | ||
| EV/EBITDA | 28.28 |
4.3 Compensation for Growth
The 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.
GE's earnings are expected to grow with 19.74% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.63
PEG (5Y)N/A
EPS Next 2Y21.77%
EPS Next 3Y19.74%
5. Dividend
5.1 Amount
GE has a yearly dividend return of 0.79%, which is pretty low.
Compared to an average industry Dividend Yield of 1.42, GE pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.79, GE pays less dividend than the S&P500 average, which is at 2.57.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.79% |
5.2 History
On average, the dividend of GE grows each year by 9.39%, which is quite nice.
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
15.38% of the earnings are spent on dividend by GE. This is a low number and sustainable payout ratio.
The dividend of GE is growing, but earnings are growing more, so the dividend growth is sustainable.
DP15.38%
EPS Next 2Y21.77%
EPS Next 3Y19.74%
181.79
-0.66 (-0.36%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners80.08%
Inst Owner Change0.02%
Ins Owners0.17%
Ins Owner Change0.12%
Market Cap193.89B
Analysts83.45
Price Target234.88 (29.2%)
Short Float %1.46%
Short Ratio2.98
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.79% |
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)0.49%
PT rev (3m)8.41%
EPS NQ rev (1m)1.08%
EPS NQ rev (3m)9.13%
EPS NY rev (1m)0%
EPS NY rev (3m)3.58%
Revenue NQ rev (1m)-0.91%
Revenue NQ rev (3m)-0.47%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)0.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 40.49 | ||
| Fwd PE | 32.44 | ||
| P/S | 5.01 | ||
| P/FCF | 52.72 | ||
| P/OCF | 41.17 | ||
| P/B | 10.03 | ||
| P/tB | 29.62 | ||
| EV/EBITDA | 28.28 |
EPS(TTM)4.49
EY2.47%
EPS(NY)5.6
Fwd EY3.08%
FCF(TTM)3.45
FCFY1.9%
OCF(TTM)4.42
OCFY2.43%
SpS36.29
BVpS18.13
TBVpS6.14
PEG (NY)1.63
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 | 2.54 |
F-Score5
WACC9.67%
ROIC/WACC0.6
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 5Y15.13%
Revenue 1Y (TTM)-43.05%
Revenue growth 3Y-19.5%
Revenue growth 5Y-15.57%
Sales Q2Q%-49.14%
Revenue Next Year13.64%
Revenue Next 2Y12.18%
Revenue Next 3Y11.17%
Revenue Next 5Y9.14%
EBIT growth 1Y80.92%
EBIT growth 3Y28.15%
EBIT growth 5Y10.46%
EBIT Next Year34.71%
EBIT Next 3Y19.28%
EBIT Next 5Y13.87%
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%