We assign a fundamental rating of 5 out of 10 to IR. IR was compared to 132 industry peers in the Machinery industry. IR has an excellent profitability rating, but there are some minor concerns on its financial health. While showing a medium growth rate, IR is valued expensive at the moment.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

IR had positive earnings in the past year.
IR had a positive operating cash flow in the past year.
Of the past 5 years IR 4 years were profitable.
Each year in the past 5 years IR had a positive operating cash flow.

1.2 Ratios

IR has a Return On Assets of 2.97%. This is comparable to the rest of the industry: IR outperforms 46.21% of its industry peers.
IR's Return On Equity of 5.34% is in line compared to the rest of the industry. IR outperforms 44.70% of its industry peers.
IR has a Return On Invested Capital of 6.95%. This is comparable to the rest of the industry: IR outperforms 53.03% of its industry peers.
The Average Return On Invested Capital over the past 3 years for IR is below the industry average of 10.24%.
The 3 year average ROIC (6.33%) for IR is below the current ROIC(6.95%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	2.97%
ROE	5.34%
ROIC	6.95%

ROA(3y)4.58%

ROA(5y)3.45%

ROE(3y)7.59%

ROE(5y)5.73%

ROIC(3y)6.33%

ROIC(5y)4.79%

1.3 Margins

IR has a Profit Margin of 7.25%. This is in the better half of the industry: IR outperforms 63.64% of its industry peers.
IR's Profit Margin has improved in the last couple of years.
The Operating Margin of IR (19.75%) is better than 88.64% of its industry peers.
IR's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 43.72%, IR belongs to the best of the industry, outperforming 81.82% of the companies in the same industry.
IR's Gross Margin has improved in the last couple of years.

		Industry Rank	Sector Rank
OM	19.75%
PM (TTM)	7.25%
GM	43.72%

OM growth 3Y18.5%

OM growth 5Y9.27%

PM growth 3Y2.02%

PM growth 5Y8.01%

GM growth 3Y4.32%

GM growth 5Y2.58%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

IR has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
IR has about the same amout of shares outstanding than it did 1 year ago.
Compared to 5 years ago, IR has more shares outstanding
The debt/assets ratio for IR is higher compared to a year ago.

2.2 Solvency

IR has an Altman-Z score of 3.61. This indicates that IR is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of IR (3.61) is comparable to the rest of the industry.
IR has a debt to FCF ratio of 3.83. This is a good value and a sign of high solvency as IR would need 3.83 years to pay back of all of its debts.
IR's Debt to FCF ratio of 3.83 is fine compared to the rest of the industry. IR outperforms 61.36% of its industry peers.
IR has a Debt/Equity ratio of 0.47. This is a healthy value indicating a solid balance between debt and equity.
IR's Debt to Equity ratio of 0.47 is in line compared to the rest of the industry. IR outperforms 48.48% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.47
Debt/FCF	3.83
Altman-Z	3.61

ROIC/WACC0.72

WACC9.65%

2.3 Liquidity

A Current Ratio of 2.16 indicates that IR has no problem at all paying its short term obligations.
IR has a Current ratio of 2.16. This is comparable to the rest of the industry: IR outperforms 57.58% of its industry peers.
A Quick Ratio of 1.51 indicates that IR should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.51, IR is in the better half of the industry, outperforming 65.15% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	2.16
Quick Ratio	1.51

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

The earnings per share for IR have decreased by -2.72% in the last year.
The Earnings Per Share has been growing by 15.65% on average over the past years. This is quite good.
The Revenue has been growing slightly by 4.20% in the past year.
Measured over the past years, IR shows a very strong growth in Revenue. The Revenue has been growing by 29.10% on average per year.

EPS 1Y (TTM)-2.72%

EPS 3Y15.06%

EPS 5Y15.65%

EPS Q2Q%2.38%

Revenue 1Y (TTM)4.2%

Revenue growth 3Y11.98%

Revenue growth 5Y29.1%

Sales Q2Q%5.05%

3.2 Future

The Earnings Per Share is expected to grow by 10.57% on average over the next years. This is quite good.
Based on estimates for the next years, IR will show a small growth in Revenue. The Revenue will grow by 6.58% on average per year.

EPS Next Y2.85%

EPS Next 2Y5.6%

EPS Next 3Y7.1%

EPS Next 5Y10.57%

Revenue Next Year4.78%

Revenue Next 2Y4.65%

Revenue Next 3Y4.88%

Revenue Next 5Y6.58%

3.3 Evolution

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 27.08, IR can be considered very expensive at the moment.
The rest of the industry has a similar Price/Earnings ratio as IR.
The average S&P500 Price/Earnings ratio is at 27.21. IR is around the same levels.
A Price/Forward Earnings ratio of 23.77 indicates a rather expensive valuation of IR.
Compared to the rest of the industry, the Price/Forward Earnings ratio of IR is on the same level as its industry peers.
IR's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.26.

		Industry Rank	Sector Rank
PE	27.08
Fwd PE	23.77

4.2 Price Multiples

IR's Enterprise Value to EBITDA is on the same level as the industry average.
IR's Price/Free Cash Flow ratio is in line with the industry average.

		Industry Rank	Sector Rank
P/FCF	27.58
EV/EBITDA	19.47

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates IR does not grow enough to justify the current Price/Earnings ratio.
IR has a very decent profitability rating, which may justify a higher PE ratio.

PEG (NY)9.51

PEG (5Y)1.73

EPS Next 2Y5.6%

EPS Next 3Y7.1%

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5. Dividend

5.1 Amount

IR has a yearly dividend return of 0.09%, which is pretty low.
IR's Dividend Yield is comparable with the industry average which is at 0.98.
Compared to an average S&P500 Dividend Yield of 1.81, IR's dividend is way lower than the S&P500 average.

		Industry Rank	Sector Rank
Dividend Yield	0.09%

5.2 History

IR has paid a dividend for at least 10 years, which is a reliable track record.

Dividend Growth(5Y)N/A

Div Incr Years0

Div Non Decr Years0

5.3 Sustainability

IR pays out 5.93% of its income as dividend. This is a sustainable payout ratio.

DP5.93%

EPS Next 2Y5.6%

EPS Next 3Y7.1%

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INGERSOLL-RAND INC / IR FAQ

What is the fundamental rating for IR stock?

ChartMill assigns a fundamental rating of 5 / 10 to IR.

Can you provide the valuation status for INGERSOLL-RAND INC?

ChartMill assigns a valuation rating of 2 / 10 to INGERSOLL-RAND INC (IR). This can be considered as Overvalued.

How profitable is INGERSOLL-RAND INC (IR) stock?

INGERSOLL-RAND INC (IR) has a profitability rating of 7 / 10.

Can you provide the PE and PB ratios for IR stock?

The Price/Earnings (PE) ratio for INGERSOLL-RAND INC (IR) is 27.08 and the Price/Book (PB) ratio is 3.4.

What is the earnings growth outlook for INGERSOLL-RAND INC?

The Earnings per Share (EPS) of INGERSOLL-RAND INC (IR) is expected to grow by 2.85% in the next year.