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 66 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.
In the past year GE had a positive cash flow from operations.
Of the past 5 years GE 4 years were profitable.
Each year in the past 5 years GE had a positive operating cash flow.
1.2 Ratios
GE has a better Return On Assets (5.64%) than 71.21% of its industry peers.
GE has a better Return On Equity (36.34%) than 98.48% of its industry peers.
GE has a Return On Invested Capital of 6.47%. This is in the better half of the industry: GE outperforms 60.61% 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 3 year average ROIC (3.20%) for GE is below the current ROIC(6.47%), indicating increased profibility in the last year.
| 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
GE's Profit Margin of 17.63% is amongst the best of the industry. GE outperforms 98.48% of its industry peers.
Looking at the Operating Margin, with a value of 16.35%, GE belongs to the top of the industry, outperforming 87.88% of the companies in the same industry.
GE's Operating Margin has improved in the last couple of years.
GE's Gross Margin of 35.83% is fine compared to the rest of the industry. GE outperforms 74.24% of its industry peers.
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.
The number of shares outstanding for GE has been reduced compared to 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.
GE has a Altman-Z score (2.95) which is in line with its industry peers.
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.
The Debt to FCF ratio of GE (4.44) is better than 74.24% of its industry peers.
GE has a Debt/Equity ratio of 0.91. This is a neutral value indicating GE is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.91, GE is not doing good in the industry: 69.70% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.91 | ||
| Debt/FCF | 4.44 | ||
| Altman-Z | 2.95 |
ROIC/WACC0.65
WACC10.01%
2.3 Liquidity
A Current Ratio of 1.08 indicates that GE should not have too much problems paying its short term obligations.
With a Current ratio value of 1.08, GE is not doing good in the industry: 81.82% of the companies in the same industry are doing better.
A Quick Ratio of 0.77 indicates that GE may have some problems paying its short term obligations.
GE's Quick ratio of 0.77 is on the low side compared to the rest of the industry. GE is outperformed by 78.79% 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.
Measured over the past years, GE shows a decrease in Earnings Per Share. The EPS has been decreasing by -1.65% on average per year.
The Revenue has grown by 8.81% in the past year. This is quite good.
Measured over the past years, GE shows a very negative growth in Revenue. The Revenue has been decreasing by -15.57% on average per year.
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
GE is valuated quite expensively with a Price/Earnings ratio of 47.84.
Compared to the rest of the industry, the Price/Earnings ratio of GE is on the same level as its industry peers.
When comparing the Price/Earnings ratio of GE to the average of the S&P500 Index (27.45), we can say GE is valued expensively.
The Price/Forward Earnings ratio is 36.94, which means the current valuation is very expensive for GE.
The rest of the industry has a similar Price/Forward Earnings ratio as GE.
GE's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 21.90.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 47.84 | ||
| Fwd PE | 36.94 |
4.2 Price Multiples
GE's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, GE is valued a bit cheaper than the industry average as 62.12% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 59.71 | ||
| EV/EBITDA | 36.04 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct 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 20.12% in the coming years.
PEG (NY)1.73
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 2.38, GE's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.58% |
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
GE pays out 17.50% of its income as dividend. This is a sustainable payout ratio.
The dividend of GE is growing, but earnings are growing more, so the dividend growth is sustainable.
DP17.5%
EPS Next 2Y22%
EPS Next 3Y20.12%
246.88
+2.13 (+0.87%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners79.98%
Inst Owner Change-58.93%
Ins Owners0.15%
Ins Owner Change0.53%
Market Cap263.27B
Analysts82.86
Price Target250.86 (1.61%)
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 | 47.84 | ||
| Fwd PE | 36.94 | ||
| P/S | 6.63 | ||
| P/FCF | 59.71 | ||
| P/OCF | 50.36 | ||
| P/B | 13.68 | ||
| P/tB | 41.94 | ||
| EV/EBITDA | 36.04 |
EPS(TTM)5.16
EY2.09%
EPS(NY)6.68
Fwd EY2.71%
FCF(TTM)4.13
FCFY1.67%
OCF(TTM)4.9
OCFY1.99%
SpS37.21
BVpS18.05
TBVpS5.89
PEG (NY)1.73
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
WACC10.01%
ROIC/WACC0.65
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%