INGERSOLL-RAND INC (IR) Stock Fundamental Analysis
NYSE:IR - New York Stock Exchange, Inc. - US45687V1061 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to IR. IR was compared to 128 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.
1. Profitability
1.1 Basic Checks
In the past year IR was profitable.
IR had a positive operating cash flow in the past year.
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
Looking at the Return On Assets, with a value of 4.66%, IR is in line with its industry, outperforming 55.20% of the companies in the same industry.
IR has a Return On Equity (8.24%) which is in line with its industry peers.
With a Return On Invested Capital value of 6.90%, IR perfoms like the industry average, outperforming 53.60% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for IR is below the industry average of 11.00%.
The 3 year average ROIC (6.11%) for IR is below the current ROIC(6.90%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.66% | ||
| ROE | 8.24% | ||
| ROIC | 6.9% |
ROA(3y)4.58%
ROA(5y)3.45%
ROE(3y)7.59%
ROE(5y)5.73%
ROIC(3y)6.11%
ROIC(5y)4.65%
1.3 Margins
With a decent Profit Margin value of 11.59%, IR is doing good in the industry, outperforming 80.00% of the companies in the same industry.
In the last couple of years the Profit Margin of IR has grown nicely.
The Operating Margin of IR (20.12%) is better than 87.20% of its industry peers.
IR's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 43.81%, IR is in the better half of the industry, outperforming 79.20% of the companies in the same industry.
IR's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.12% | ||
| PM (TTM) | 11.59% | ||
| GM | 43.81% |
OM growth 3Y14.56%
OM growth 5Y7.08%
PM growth 3Y2.02%
PM growth 5Y8.01%
GM growth 3Y4.32%
GM growth 5Y2.58%
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.
The number of shares outstanding for IR remains at a similar level compared to 1 year ago.
Compared to 5 years ago, IR has more shares outstanding
Compared to 1 year ago, IR has a worse debt to assets ratio.
2.2 Solvency
IR has an Altman-Z score of 3.70. This indicates that IR is financially healthy and has little risk of bankruptcy at the moment.
IR has a better Altman-Z score (3.70) than 61.60% of its industry peers.
The Debt to FCF ratio of IR is 3.81, which is a good value as it means it would take IR, 3.81 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of IR (3.81) is comparable to the rest of the industry.
A Debt/Equity ratio of 0.47 indicates that IR is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.47, IR is in line with its industry, outperforming 46.40% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 3.81 | ||
| Altman-Z | 3.7 |
ROIC/WACC0.66
WACC10.47%
2.3 Liquidity
A Current Ratio of 2.29 indicates that IR has no problem at all paying its short term obligations.
The Current ratio of IR (2.29) is comparable to the rest of the industry.
IR has a Quick Ratio of 1.71. This is a normal value and indicates that IR is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of IR (1.71) is better than 71.20% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.29 | ||
| Quick Ratio | 1.71 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 11.15% over the past year.
IR shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.65% yearly.
The Revenue has been growing slightly by 5.22% 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)11.15%
EPS 3Y15.06%
EPS 5Y15.65%
EPS Q2Q%-2.33%
Revenue 1Y (TTM)5.22%
Revenue growth 3Y11.98%
Revenue growth 5Y29.1%
Sales Q2Q%4.24%
3.2 Future
The Earnings Per Share is expected to grow by 11.38% on average over the next years. This is quite good.
IR is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.37% yearly.
EPS Next Y7.9%
EPS Next 2Y9.03%
EPS Next 3Y8.95%
EPS Next 5Y11.38%
Revenue Next Year4.31%
Revenue Next 2Y4.97%
Revenue Next 3Y4.86%
Revenue Next 5Y7.37%
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
IR is valuated quite expensively with a Price/Earnings ratio of 25.44.
IR's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 29.63. IR is around the same levels.
With a Price/Forward Earnings ratio of 23.57, IR is valued on the expensive side.
The rest of the industry has a similar Price/Forward Earnings ratio as IR.
IR is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.44 | ||
| Fwd PE | 23.57 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as IR.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of IR is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.03 | ||
| EV/EBITDA | 19.71 |
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)3.22
PEG (5Y)1.63
EPS Next 2Y9.03%
EPS Next 3Y8.95%
5. Dividend
5.1 Amount
IR has a yearly dividend return of 0.09%, which is pretty low.
Compared to an average industry Dividend Yield of 1.67, IR has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.29, IR's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.09% |
5.2 History
IR has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of IR decreased in the last 3 years.
Dividend Growth(5Y)N/A
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
3.85% of the earnings are spent on dividend by IR. This is a low number and sustainable payout ratio.
DP3.85%
EPS Next 2Y9.03%
EPS Next 3Y8.95%
83.69
-3.08 (-3.55%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners100.1%
Inst Owner Change-2.45%
Ins Owners0.18%
Ins Owner Change6.05%
Market Cap33.73B
Analysts77.6
Price Target105 (25.46%)
Short Float %2.11%
Short Ratio3.82
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.09% |
Yearly Dividend0.08
Dividend Growth(5Y)N/A
DP3.85%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.48%
Min EPS beat(2)-3.21%
Max EPS beat(2)0.25%
EPS beat(4)3
Avg EPS beat(4)2.44%
Min EPS beat(4)-3.21%
Max EPS beat(4)9.69%
EPS beat(8)7
Avg EPS beat(8)7.24%
EPS beat(12)11
Avg EPS beat(12)6.52%
EPS beat(16)15
Avg EPS beat(16)8.66%
Revenue beat(2)0
Avg Revenue beat(2)-3.45%
Min Revenue beat(2)-3.58%
Max Revenue beat(2)-3.33%
Revenue beat(4)0
Avg Revenue beat(4)-3.55%
Min Revenue beat(4)-4.62%
Max Revenue beat(4)-2.68%
Revenue beat(8)3
Avg Revenue beat(8)-0.55%
Revenue beat(12)7
Avg Revenue beat(12)0.07%
Revenue beat(16)9
Avg Revenue beat(16)-0.95%
PT rev (1m)-4.44%
PT rev (3m)-0.24%
EPS NQ rev (1m)-1.12%
EPS NQ rev (3m)-0.87%
EPS NY rev (1m)-0.29%
EPS NY rev (3m)-0.27%
Revenue NQ rev (1m)-1.21%
Revenue NQ rev (3m)-1.11%
Revenue NY rev (1m)-0.2%
Revenue NY rev (3m)-0.2%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.44 | ||
| Fwd PE | 23.57 | ||
| P/S | 4.66 | ||
| P/FCF | 27.03 | ||
| P/OCF | 24.15 | ||
| P/B | 3.31 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.71 |
EPS(TTM)3.29
EY3.93%
EPS(NY)3.55
Fwd EY4.24%
FCF(TTM)3.1
FCFY3.7%
OCF(TTM)3.47
OCFY4.14%
SpS17.95
BVpS25.26
TBVpS-5.81
PEG (NY)3.22
PEG (5Y)1.63
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.66% | ||
| ROE | 8.24% | ||
| ROCE | 8.99% | ||
| ROIC | 6.9% | ||
| ROICexc | 7.63% | ||
| ROICexgc | 52.5% | ||
| OM | 20.12% | ||
| PM (TTM) | 11.59% | ||
| GM | 43.81% | ||
| FCFM | 17.24% |
ROA(3y)4.58%
ROA(5y)3.45%
ROE(3y)7.59%
ROE(5y)5.73%
ROIC(3y)6.11%
ROIC(5y)4.65%
ROICexc(3y)6.87%
ROICexc(5y)5.28%
ROICexgc(3y)44.6%
ROICexgc(5y)34.82%
ROCE(3y)7.96%
ROCE(5y)6.06%
ROICexcg growth 3Y18.6%
ROICexcg growth 5Y18.94%
ROICexc growth 3Y18.6%
ROICexc growth 5Y4.1%
OM growth 3Y14.56%
OM growth 5Y7.08%
PM growth 3Y2.02%
PM growth 5Y8.01%
GM growth 3Y4.32%
GM growth 5Y2.58%
F-Score6
Asset Turnover0.4
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 3.81 | ||
| Debt/EBITDA | 2.45 | ||
| Cap/Depr | 30.93% | ||
| Cap/Sales | 2.06% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 72.08% | ||
| Profit Quality | 148.77% | ||
| Current Ratio | 2.29 | ||
| Quick Ratio | 1.71 | ||
| Altman-Z | 3.7 |
F-Score6
WACC10.47%
ROIC/WACC0.66
Cap/Depr(3y)25.25%
Cap/Depr(5y)20.22%
Cap/Sales(3y)1.73%
Cap/Sales(5y)1.5%
Profit Quality(3y)146.25%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)11.15%
EPS 3Y15.06%
EPS 5Y15.65%
EPS Q2Q%-2.33%
EPS Next Y7.9%
EPS Next 2Y9.03%
EPS Next 3Y8.95%
EPS Next 5Y11.38%
Revenue 1Y (TTM)5.22%
Revenue growth 3Y11.98%
Revenue growth 5Y29.1%
Sales Q2Q%4.24%
Revenue Next Year4.31%
Revenue Next 2Y4.97%
Revenue Next 3Y4.86%
Revenue Next 5Y7.37%
EBIT growth 1Y17.25%
EBIT growth 3Y28.28%
EBIT growth 5Y38.24%
EBIT Next Year21.77%
EBIT Next 3Y13.33%
EBIT Next 5Y12.29%
FCF growth 1Y-1.92%
FCF growth 3Y31.28%
FCF growth 5Y32.51%
OCF growth 1Y1.4%
OCF growth 3Y31.41%
OCF growth 5Y32.4%