We assign a fundamental rating of 7 out of 10 to RMD. RMD was compared to 186 industry peers in the Health Care Equipment & Supplies industry. RMD scores excellent points on both the profitability and health parts. This is a solid base for a good stock. RMD has a correct valuation and a medium growth rate. Finally RMD also has an excellent dividend rating. This makes RMD very considerable for dividend and quality investing!

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

RMD had positive earnings in the past year.
In the past year RMD had a positive cash flow from operations.
Each year in the past 5 years RMD has been profitable.
In the past 5 years RMD always reported a positive cash flow from operatings.

1.2 Ratios

RMD's Return On Assets of 17.31% is amongst the best of the industry. RMD outperforms 97.85% of its industry peers.
The Return On Equity of RMD (23.49%) is better than 96.24% of its industry peers.
RMD has a Return On Invested Capital of 20.50%. This is amongst the best in the industry. RMD outperforms 97.85% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for RMD is significantly above the industry average of 8.81%.
The 3 year average ROIC (18.06%) for RMD is below the current ROIC(20.50%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	17.31%
ROE	23.49%
ROIC	20.5%

ROA(3y)15.1%

ROA(5y)14.12%

ROE(3y)22.06%

ROE(5y)21.17%

ROIC(3y)18.06%

ROIC(5y)18.51%

1.3 Margins

RMD has a better Profit Margin (27.35%) than 96.77% of its industry peers.
RMD's Profit Margin has improved in the last couple of years.
RMD's Operating Margin of 33.49% is amongst the best of the industry. RMD outperforms 99.46% of its industry peers.
In the last couple of years the Operating Margin of RMD has grown nicely.
The Gross Margin of RMD (60.05%) is better than 60.75% of its industry peers.
In the last couple of years the Gross Margin of RMD has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	33.49%
PM (TTM)	27.35%
GM	60.05%

OM growth 3Y5.43%

OM growth 5Y3.67%

PM growth 3Y7.71%

PM growth 5Y5.3%

GM growth 3Y1.6%

GM growth 5Y0.42%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so RMD is creating value.
The number of shares outstanding for RMD has been reduced compared to 1 year ago.
The number of shares outstanding for RMD has been increased compared to 5 years ago.
RMD has a better debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 13.09 indicates that RMD is not in any danger for bankruptcy at the moment.
RMD's Altman-Z score of 13.09 is amongst the best of the industry. RMD outperforms 92.47% of its industry peers.
RMD has a debt to FCF ratio of 0.38. This is a very positive value and a sign of high solvency as it would only need 0.38 years to pay back of all of its debts.
The Debt to FCF ratio of RMD (0.38) is better than 91.40% of its industry peers.
RMD has a Debt/Equity ratio of 0.07. This is a healthy value indicating a solid balance between debt and equity.
RMD has a better Debt to Equity ratio (0.07) than 67.20% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.07
Debt/FCF	0.38
Altman-Z	13.09

ROIC/WACC2.03

WACC10.08%

2.3 Liquidity

RMD has a Current Ratio of 2.89. This indicates that RMD is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of RMD (2.89) is comparable to the rest of the industry.
RMD has a Quick Ratio of 2.13. This indicates that RMD is financially healthy and has no problem in meeting its short term obligations.
RMD has a Quick ratio of 2.13. This is comparable to the rest of the industry: RMD outperforms 57.53% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	2.89
Quick Ratio	2.13

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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

RMD shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 16.29%, which is quite good.
Measured over the past years, RMD shows a quite strong growth in Earnings Per Share. The EPS has been growing by 14.94% on average per year.
The Revenue has grown by 9.84% in the past year. This is quite good.
RMD shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.72% yearly.

EPS 1Y (TTM)16.29%

EPS 3Y18.15%

EPS 5Y14.94%

EPS Q2Q%15.64%

Revenue 1Y (TTM)9.84%

Revenue growth 3Y12.88%

Revenue growth 5Y11.72%

Sales Q2Q%10.98%

3.2 Future

Based on estimates for the next years, RMD will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.39% on average per year.
The Revenue is expected to grow by 8.22% on average over the next years. This is quite good.

EPS Next Y15%

EPS Next 2Y12.77%

EPS Next 3Y11.27%

EPS Next 5Y10.39%

Revenue Next Year9.28%

Revenue Next 2Y8.32%

Revenue Next 3Y7.72%

Revenue Next 5Y8.22%

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.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 25.13, which means the current valuation is very expensive for RMD.
Compared to the rest of the industry, the Price/Earnings ratio of RMD indicates a somewhat cheap valuation: RMD is cheaper than 79.57% of the companies listed in the same industry.
RMD's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.32.
With a Price/Forward Earnings ratio of 21.27, RMD is valued on the expensive side.
Based on the Price/Forward Earnings ratio, RMD is valued cheaper than 80.11% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of RMD to the average of the S&P500 Index (25.57), we can say RMD is valued inline with the index average.

		Industry Rank	Sector Rank
PE	25.13
Fwd PE	21.27

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, RMD is valued a bit cheaper than the industry average as 77.42% of the companies are valued more expensively.
RMD's Price/Free Cash Flow ratio is rather cheap when compared to the industry. RMD is cheaper than 89.25% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	21.47
EV/EBITDA	18.94

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of RMD may justify a higher PE ratio.

PEG (NY)1.68

PEG (5Y)1.68

EPS Next 2Y12.77%

EPS Next 3Y11.27%

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5. Dividend

5.1 Amount

RMD has a yearly dividend return of 0.93%, which is pretty low.
Compared to an average industry Dividend Yield of 0.21, RMD pays a better dividend. On top of this RMD pays more dividend than 91.94% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 1.83, RMD's dividend is way lower than the S&P500 average.

		Industry Rank	Sector Rank
Dividend Yield	0.93%

5.2 History

On average, the dividend of RMD grows each year by 6.33%, which is quite nice.
RMD has paid a dividend for at least 10 years, which is a reliable track record.
RMD has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.

Dividend Growth(5Y)6.33%

Div Incr Years12

Div Non Decr Years12

5.3 Sustainability

22.31% of the earnings are spent on dividend by RMD. This is a low number and sustainable payout ratio.
The dividend of RMD is growing, but earnings are growing more, so the dividend growth is sustainable.

DP22.31%

EPS Next 2Y12.77%

EPS Next 3Y11.27%

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RESMED INC / RMD FAQ

What is the ChartMill fundamental rating of RESMED INC (RMD) stock?

ChartMill assigns a fundamental rating of 7 / 10 to RMD.

Can you provide the valuation status for RESMED INC?

ChartMill assigns a valuation rating of 5 / 10 to RESMED INC (RMD). This can be considered as Fairly Valued.

What is the profitability of RMD stock?

RESMED INC (RMD) has a profitability rating of 9 / 10.

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

The Price/Earnings (PE) ratio for RESMED INC (RMD) is 25.13 and the Price/Book (PB) ratio is 6.16.

What is the financial health of RESMED INC (RMD) stock?

The financial health rating of RESMED INC (RMD) is 8 / 10.