INGERSOLL-RAND INC (IR) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:IR - US45687V1061 - Common Stock
85.25 USD
-1.02 (-1.18%)
85.25 USD
0 (0%)
IR gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 132 industry peers in the Machinery industry. While IR has a great profitability rating, there are some minor concerns on its financial health. IR is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- In the past year IR was profitable.
- In the past year IR had a positive cash flow from operations.
- IR had positive earnings in 4 of the past 5 years.
- In the past 5 years IR always reported a positive cash flow from operatings.
1.2 Ratios
- IR has a Return On Assets (2.97%) which is comparable to the rest of the industry.
- The Return On Equity of IR (5.34%) is comparable to the rest of the industry.
- Looking at the Return On Invested Capital, with a value of 6.95%, IR is in line with its industry, outperforming 53.03% of the companies in the same industry.
- IR had an Average Return On Invested Capital over the past 3 years of 6.33%. This is below the industry average of 10.24%.
- The last Return On Invested Capital (6.95%) for IR is above the 3 year average (6.33%), which is a sign of increasing profitability.
| 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
- Looking at the Profit Margin, with a value of 7.25%, IR is in the better half of the industry, outperforming 63.64% of the companies in the same industry.
- In the last couple of years the Profit Margin of IR has grown nicely.
- IR's Operating Margin of 19.75% is amongst the best of the industry. IR outperforms 88.64% of its industry peers.
- In the last couple of years the Operating Margin of IR has grown nicely.
- The Gross Margin of IR (43.72%) is better than 81.82% of its industry peers.
- 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%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so IR is destroying value.
- Compared to 1 year ago, IR has about the same amount of shares outstanding.
- The number of shares outstanding for IR has been increased compared to 5 years ago.
- Compared to 1 year ago, IR has a worse debt to assets ratio.
2.2 Solvency
- IR has an Altman-Z score of 3.55. This indicates that IR is financially healthy and has little risk of bankruptcy at the moment.
- IR's Altman-Z score of 3.55 is in line compared to the rest of the industry. IR outperforms 59.85% of its industry peers.
- 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 has a better Debt to FCF ratio (3.83) than 60.61% 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 has a Debt to Equity ratio of 0.47. This is comparable to the rest of the industry: IR outperforms 47.73% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 3.83 | ||
| Altman-Z | 3.55 |
ROIC/WACC0.73
WACC9.51%
2.3 Liquidity
- IR has a Current Ratio of 2.16. This indicates that IR is financially healthy and has no problem in meeting its short term obligations.
- Looking at the Current ratio, with a value of 2.16, IR is in line with its industry, outperforming 57.58% of the companies in the same industry.
- IR has a Quick Ratio of 1.51. This is a normal value and indicates that IR is financially healthy and should not expect problems in meeting its short term obligations.
- IR has a better Quick ratio (1.51) than 65.15% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.16 | ||
| Quick Ratio | 1.51 |
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.
- IR shows a small growth in Revenue. In the last year, the Revenue has grown by 4.20%.
- IR shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 29.10% yearly.
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
- Based on estimates for the next years, IR will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.57% on average per year.
- IR is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.58% yearly.
EPS Next Y2.85%
EPS Next 2Y5.6%
EPS Next 3Y7.1%
EPS Next 5Y10.57%
Revenue Next Year4.78%
Revenue Next 2Y4.67%
Revenue Next 3Y4.86%
Revenue Next 5Y6.58%
3.3 Evolution
- Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past 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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 26.48, which means the current valuation is very expensive for IR.
- The rest of the industry has a similar Price/Earnings ratio as IR.
- When comparing the Price/Earnings ratio of IR to the average of the S&P500 Index (28.60), we can say IR is valued inline with the index average.
- IR is valuated rather expensively with a Price/Forward Earnings ratio of 23.24.
- IR's Price/Forward Earnings ratio is in line with the industry average.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.83, IR is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.48 | ||
| Fwd PE | 23.24 |
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 | 26.96 | ||
| EV/EBITDA | 19.01 |
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)9.3
PEG (5Y)1.69
EPS Next 2Y5.6%
EPS Next 3Y7.1%
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 1.01.
- Compared to an average S&P500 Dividend Yield of 1.82, 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
- 5.93% of the earnings are spent on dividend by IR. This is a low number and sustainable payout ratio.
DP5.93%
EPS Next 2Y5.6%
EPS Next 3Y7.1%
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 26.48 and the Price/Book (PB) ratio is 3.33.
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.