ITT INC (ITT) Stock Fundamental Analysis
NYSE:ITT - New York Stock Exchange, Inc. - US45073V1089 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to ITT. ITT was compared to 128 industry peers in the Machinery industry. Both the health and profitability get an excellent rating, making ITT a very profitable company, without any liquidiy or solvency issues. ITT is quite expensive at the moment. It does show a decent growth rate. This makes ITT very considerable for quality investing!
1. Profitability
1.1 Basic Checks
ITT had positive earnings in the past year.
ITT had a positive operating cash flow in the past year.
In the past 5 years ITT has always been profitable.
Of the past 5 years ITT 4 years had a positive operating cash flow.
1.2 Ratios
The Return On Assets of ITT (10.67%) is better than 82.03% of its industry peers.
ITT has a Return On Equity of 18.56%. This is in the better half of the industry: ITT outperforms 79.69% of its industry peers.
The Return On Invested Capital of ITT (13.26%) is better than 78.91% of its industry peers.
ITT had an Average Return On Invested Capital over the past 3 years of 13.31%. This is above the industry average of 10.71%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.67% | ||
| ROE | 18.56% | ||
| ROIC | 13.26% |
ROA(3y)10.38%
ROA(5y)8.34%
ROE(3y)17.11%
ROE(5y)13.79%
ROIC(3y)13.31%
ROIC(5y)12.08%
1.3 Margins
ITT has a better Profit Margin (14.20%) than 83.59% of its industry peers.
In the last couple of years the Profit Margin of ITT has grown nicely.
The Operating Margin of ITT (17.78%) is better than 82.81% of its industry peers.
ITT's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 34.76%, ITT is doing good in the industry, outperforming 60.94% of the companies in the same industry.
In the last couple of years the Gross Margin of ITT has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.78% | ||
| PM (TTM) | 14.2% | ||
| GM | 34.76% |
OM growth 3Y3.53%
OM growth 5Y5.04%
PM growth 3Y7.7%
PM growth 5Y4.57%
GM growth 3Y1.81%
GM growth 5Y1.45%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ITT is still creating some value.
The number of shares outstanding for ITT has been reduced compared to 1 year ago.
Compared to 5 years ago, ITT has less shares outstanding
The debt/assets ratio for ITT is higher compared to a year ago.
2.2 Solvency
ITT has an Altman-Z score of 5.79. This indicates that ITT is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 5.79, ITT belongs to the best of the industry, outperforming 81.25% of the companies in the same industry.
ITT has a debt to FCF ratio of 1.52. This is a very positive value and a sign of high solvency as it would only need 1.52 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.52, ITT is in the better half of the industry, outperforming 78.91% of the companies in the same industry.
ITT has a Debt/Equity ratio of 0.26. This is a healthy value indicating a solid balance between debt and equity.
ITT has a better Debt to Equity ratio (0.26) than 67.19% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.26 | ||
| Debt/FCF | 1.52 | ||
| Altman-Z | 5.79 |
ROIC/WACC1.33
WACC9.97%
2.3 Liquidity
A Current Ratio of 1.19 indicates that ITT should not have too much problems paying its short term obligations.
The Current ratio of ITT (1.19) is worse than 85.94% of its industry peers.
ITT has a Quick Ratio of 1.19. This is a bad value and indicates that ITT is not financially healthy enough and could expect problems in meeting its short term obligations.
ITT has a Quick ratio of 0.80. This is in the lower half of the industry: ITT underperforms 75.00% of its industry peers.
ITT does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.19 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 8.06% over the past year.
ITT shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.09% yearly.
Looking at the last year, ITT shows a small growth in Revenue. The Revenue has grown by 6.99% in the last year.
Measured over the past years, ITT shows a small growth in Revenue. The Revenue has been growing by 4.99% on average per year.
EPS 1Y (TTM)8.06%
EPS 3Y13.17%
EPS 5Y9.09%
EPS Q2Q%2.11%
Revenue 1Y (TTM)6.99%
Revenue growth 3Y9.5%
Revenue growth 5Y4.99%
Sales Q2Q%0.26%
3.2 Future
The Earnings Per Share is expected to grow by 8.18% on average over the next years. This is quite good.
Based on estimates for the next years, ITT will show a small growth in Revenue. The Revenue will grow by 4.57% on average per year.
EPS Next Y10.28%
EPS Next 2Y11.05%
EPS Next 3Y9.61%
EPS Next 5Y8.18%
Revenue Next Year4.09%
Revenue Next 2Y4.36%
Revenue Next 3Y4.23%
Revenue Next 5Y4.57%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same 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 stable.
4. Valuation
4.1 Price/Earnings Ratio
ITT is valuated quite expensively with a Price/Earnings ratio of 26.72.
ITT's Price/Earnings is on the same level as the industry average.
ITT is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 21.78 indicates a rather expensive valuation of ITT.
The rest of the industry has a similar Price/Forward Earnings ratio as ITT.
When comparing the Price/Forward Earnings ratio of ITT to the average of the S&P500 Index (21.76), we can say ITT is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.72 | ||
| Fwd PE | 21.78 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as ITT.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ITT is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.59 | ||
| EV/EBITDA | 15.22 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of ITT may justify a higher PE ratio.
PEG (NY)2.6
PEG (5Y)2.94
EPS Next 2Y11.05%
EPS Next 3Y9.61%
5. Dividend
5.1 Amount
With a yearly dividend of 0.87%, ITT is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.81, ITT has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.37, ITT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.87% |
5.2 History
On average, the dividend of ITT grows each year by 16.67%, which is quite nice.
ITT has been paying a dividend for at least 10 years, so it has a reliable track record.
ITT has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)16.67%
Div Incr Years20
Div Non Decr Years20
5.3 Sustainability
20.72% of the earnings are spent on dividend by ITT. This is a low number and sustainable payout ratio.
The dividend of ITT is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP20.72%
EPS Next 2Y11.05%
EPS Next 3Y9.61%
157.66
-1.17 (-0.74%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners97.33%
Inst Owner Change0%
Ins Owners0.69%
Ins Owner Change7.32%
Market Cap12.41B
Analysts80
Price Target174.99 (10.99%)
Short Float %2.24%
Short Ratio3.23
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.87% |
Yearly Dividend1.28
Dividend Growth(5Y)16.67%
DP20.72%
Div Incr Years20
Div Non Decr Years20
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.35%
Min EPS beat(2)-0.09%
Max EPS beat(2)0.8%
EPS beat(4)3
Avg EPS beat(4)0.67%
Min EPS beat(4)-0.09%
Max EPS beat(4)1.26%
EPS beat(8)6
Avg EPS beat(8)2.98%
EPS beat(12)10
Avg EPS beat(12)2.76%
EPS beat(16)12
Avg EPS beat(16)2.58%
Revenue beat(2)0
Avg Revenue beat(2)-0.7%
Min Revenue beat(2)-0.93%
Max Revenue beat(2)-0.46%
Revenue beat(4)0
Avg Revenue beat(4)-1.11%
Min Revenue beat(4)-2.14%
Max Revenue beat(4)-0.46%
Revenue beat(8)4
Avg Revenue beat(8)0.32%
Revenue beat(12)7
Avg Revenue beat(12)0.46%
Revenue beat(16)10
Avg Revenue beat(16)0.64%
PT rev (1m)5.75%
PT rev (3m)-0.9%
EPS NQ rev (1m)-0.06%
EPS NQ rev (3m)1.89%
EPS NY rev (1m)0.31%
EPS NY rev (3m)0.05%
Revenue NQ rev (1m)-0.03%
Revenue NQ rev (3m)0.66%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.72 | ||
| Fwd PE | 21.78 | ||
| P/S | 3.42 | ||
| P/FCF | 25.59 | ||
| P/OCF | 20.08 | ||
| P/B | 4.46 | ||
| P/tB | 14.21 | ||
| EV/EBITDA | 15.22 |
EPS(TTM)5.9
EY3.74%
EPS(NY)7.24
Fwd EY4.59%
FCF(TTM)6.16
FCFY3.91%
OCF(TTM)7.85
OCFY4.98%
SpS46.16
BVpS35.32
TBVpS11.1
PEG (NY)2.6
PEG (5Y)2.94
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.67% | ||
| ROE | 18.56% | ||
| ROCE | 20.33% | ||
| ROIC | 13.26% | ||
| ROICexc | 14.94% | ||
| ROICexgc | 33.17% | ||
| OM | 17.78% | ||
| PM (TTM) | 14.2% | ||
| GM | 34.76% | ||
| FCFM | 13.34% |
ROA(3y)10.38%
ROA(5y)8.34%
ROE(3y)17.11%
ROE(5y)13.79%
ROIC(3y)13.31%
ROIC(5y)12.08%
ROICexc(3y)15.72%
ROICexc(5y)14.78%
ROICexgc(3y)30.58%
ROICexgc(5y)28%
ROCE(3y)18.55%
ROCE(5y)16.52%
ROICexcg growth 3Y4.62%
ROICexcg growth 5Y12.61%
ROICexc growth 3Y-1.83%
ROICexc growth 5Y5.78%
OM growth 3Y3.53%
OM growth 5Y5.04%
PM growth 3Y7.7%
PM growth 5Y4.57%
GM growth 3Y1.81%
GM growth 5Y1.45%
F-Score7
Asset Turnover0.75
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.26 | ||
| Debt/FCF | 1.52 | ||
| Debt/EBITDA | 0.93 | ||
| Cap/Depr | 94.39% | ||
| Cap/Sales | 3.66% | ||
| Interest Coverage | 16.65 | ||
| Cash Conversion | 78.52% | ||
| Profit Quality | 93.97% | ||
| Current Ratio | 1.19 | ||
| Quick Ratio | 0.8 | ||
| Altman-Z | 5.79 |
F-Score7
WACC9.97%
ROIC/WACC1.33
Cap/Depr(3y)95.17%
Cap/Depr(5y)84.09%
Cap/Sales(3y)3.39%
Cap/Sales(5y)3.19%
Profit Quality(3y)78.9%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)8.06%
EPS 3Y13.17%
EPS 5Y9.09%
EPS Q2Q%2.11%
EPS Next Y10.28%
EPS Next 2Y11.05%
EPS Next 3Y9.61%
EPS Next 5Y8.18%
Revenue 1Y (TTM)6.99%
Revenue growth 3Y9.5%
Revenue growth 5Y4.99%
Sales Q2Q%0.26%
Revenue Next Year4.09%
Revenue Next 2Y4.36%
Revenue Next 3Y4.23%
Revenue Next 5Y4.57%
EBIT growth 1Y10.54%
EBIT growth 3Y13.37%
EBIT growth 5Y10.29%
EBIT Next Year28.05%
EBIT Next 3Y13.29%
EBIT Next 5Y10.37%
FCF growth 1Y105.42%
FCF growth 3YN/A
FCF growth 5Y10.4%
OCF growth 1Y82.46%
OCF growth 3YN/A
OCF growth 5Y9.41%