TRANSDIGM GROUP INC (TDG) Stock Fundamental Analysis
NYSE:TDG - New York Stock Exchange, Inc. - US8936411003 - Common Stock - Currency: USD
TDG gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 65 industry peers in the Aerospace & Defense industry. While TDG belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. While showing a medium growth rate, TDG is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year TDG was profitable.
TDG had a positive operating cash flow in the past year.
Each year in the past 5 years TDG has been profitable.
In the past 5 years TDG always reported a positive cash flow from operatings.
1.2 Ratios
TDG has a Return On Assets of 7.85%. This is amongst the best in the industry. TDG outperforms 86.15% of its industry peers.
TDG's Return On Invested Capital of 14.79% is amongst the best of the industry. TDG outperforms 95.38% of its industry peers.
TDG had an Average Return On Invested Capital over the past 3 years of 12.09%. This is above the industry average of 8.44%.
The last Return On Invested Capital (14.79%) for TDG is above the 3 year average (12.09%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.85% | ||
| ROE | N/A | ||
| ROIC | 14.79% |
ROA(3y)5.47%
ROA(5y)4.47%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)12.09%
ROIC(5y)10.39%
1.3 Margins
With an excellent Profit Margin value of 20.51%, TDG belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
TDG's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 47.16%, TDG belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
TDG's Operating Margin has improved in the last couple of years.
The Gross Margin of TDG (60.37%) is better than 92.31% of its industry peers.
In the last couple of years the Gross Margin of TDG has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 47.16% | ||
| PM (TTM) | 20.51% | ||
| GM | 60.37% |
OM growth 3Y7.74%
OM growth 5Y2.75%
PM growth 3Y13.82%
PM growth 5Y4.58%
GM growth 3Y3.98%
GM growth 5Y1.47%
2. Health
2.1 Basic Checks
TDG has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, TDG has more shares outstanding
Compared to 5 years ago, TDG has more shares outstanding
TDG has a better debt/assets ratio than last year.
2.2 Solvency
TDG has an Altman-Z score of 2.67. This is not the best score and indicates that TDG is in the grey zone with still only limited risk for bankruptcy at the moment.
TDG has a Altman-Z score (2.67) which is in line with its industry peers.
TDG has a debt to FCF ratio of 13.18. This is a negative value and a sign of low solvency as TDG would need 13.18 years to pay back of all of its debts.
TDG has a Debt to FCF ratio of 13.18. This is comparable to the rest of the industry: TDG outperforms 55.38% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 13.18 | ||
| Altman-Z | 2.67 |
ROIC/WACC1.52
WACC9.76%
2.3 Liquidity
TDG has a Current Ratio of 3.09. This indicates that TDG is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of TDG (3.09) is better than 66.15% of its industry peers.
A Quick Ratio of 2.12 indicates that TDG has no problem at all paying its short term obligations.
TDG has a Quick ratio of 2.12. This is in the better half of the industry: TDG outperforms 69.23% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.09 | ||
| Quick Ratio | 2.12 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 17.55% over the past year.
The Earnings Per Share has been growing by 12.77% on average over the past years. This is quite good.
The Revenue has grown by 14.84% in the past year. This is quite good.
Measured over the past years, TDG shows a quite strong growth in Revenue. The Revenue has been growing by 8.74% on average per year.
EPS 1Y (TTM)17.55%
EPS 3Y40.97%
EPS 5Y12.77%
EPS Q2Q%14.02%
Revenue 1Y (TTM)14.84%
Revenue growth 3Y18.28%
Revenue growth 5Y8.74%
Sales Q2Q%12.04%
3.2 Future
Based on estimates for the next years, TDG will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.01% on average per year.
The Revenue is expected to grow by 9.49% on average over the next years. This is quite good.
EPS Next Y11.19%
EPS Next 2Y13.72%
EPS Next 3Y14.16%
EPS Next 5Y9.01%
Revenue Next Year11.94%
Revenue Next 2Y10.1%
Revenue Next 3Y9.17%
Revenue Next 5Y9.49%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
TDG is valuated quite expensively with a Price/Earnings ratio of 42.29.
The rest of the industry has a similar Price/Earnings ratio as TDG.
When comparing the Price/Earnings ratio of TDG to the average of the S&P500 Index (27.21), we can say TDG is valued expensively.
A Price/Forward Earnings ratio of 34.43 indicates a quite expensive valuation of TDG.
TDG's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 21.70. TDG is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.29 | ||
| Fwd PE | 34.43 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TDG is on the same level as its industry peers.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TDG indicates a somewhat cheap valuation: TDG is cheaper than 70.77% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 44.7 | ||
| EV/EBITDA | 24.95 |
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 TDG may justify a higher PE ratio.
TDG's earnings are expected to grow with 14.16% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.78
PEG (5Y)3.31
EPS Next 2Y13.72%
EPS Next 3Y14.16%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.00%, TDG is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.27, TDG pays a better dividend. On top of this TDG pays more dividend than 100.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, TDG pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5% |
5.2 History
The dividend of TDG has a limited annual growth rate of 2.56%.
TDG has been paying a dividend for less than 5 years, so it still needs to build a track record.
Dividend Growth(5Y)2.56%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
TDG pays out 255.58% of its income as dividend. This is not a sustainable payout ratio.
TDG's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP255.58%
EPS Next 2Y13.72%
EPS Next 3Y14.16%
1512.81
-7.83 (-0.51%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners95.65%
Inst Owner Change1.01%
Ins Owners0.3%
Ins Owner Change-0.78%
Market Cap84.97B
Analysts82.22
Price Target1575.46 (4.14%)
Short Float %2.02%
Short Ratio3.92
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5% |
Yearly Dividend36.65
Dividend Growth(5Y)2.56%
DP255.58%
Div Incr Years2
Div Non Decr Years2
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.05%
Min EPS beat(2)0.78%
Max EPS beat(2)1.31%
EPS beat(4)4
Avg EPS beat(4)2.76%
Min EPS beat(4)0.78%
Max EPS beat(4)4.79%
EPS beat(8)8
Avg EPS beat(8)5.76%
EPS beat(12)12
Avg EPS beat(12)6.3%
EPS beat(16)15
Avg EPS beat(16)6.14%
Revenue beat(2)0
Avg Revenue beat(2)-2.03%
Min Revenue beat(2)-2.19%
Max Revenue beat(2)-1.87%
Revenue beat(4)1
Avg Revenue beat(4)-0.86%
Min Revenue beat(4)-2.19%
Max Revenue beat(4)1.04%
Revenue beat(8)4
Avg Revenue beat(8)0.65%
Revenue beat(12)6
Avg Revenue beat(12)0.62%
Revenue beat(16)7
Avg Revenue beat(16)-0.11%
PT rev (1m)6.49%
PT rev (3m)3.33%
EPS NQ rev (1m)0.07%
EPS NQ rev (3m)-0.35%
EPS NY rev (1m)-0.17%
EPS NY rev (3m)-0.24%
Revenue NQ rev (1m)-0.04%
Revenue NQ rev (3m)-0.3%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)-0.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.29 | ||
| Fwd PE | 34.43 | ||
| P/S | 10.13 | ||
| P/FCF | 44.7 | ||
| P/OCF | 40.85 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 24.95 |
EPS(TTM)35.77
EY2.36%
EPS(NY)43.94
Fwd EY2.9%
FCF(TTM)33.84
FCFY2.24%
OCF(TTM)37.03
OCFY2.45%
SpS149.33
BVpS-100.96
TBVpS-346.23
PEG (NY)3.78
PEG (5Y)3.31
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.85% | ||
| ROE | N/A | ||
| ROCE | 19.95% | ||
| ROIC | 14.79% | ||
| ROICexc | 16.78% | ||
| ROICexgc | 70.82% | ||
| OM | 47.16% | ||
| PM (TTM) | 20.51% | ||
| GM | 60.37% | ||
| FCFM | 22.66% |
ROA(3y)5.47%
ROA(5y)4.47%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)12.09%
ROIC(5y)10.39%
ROICexc(3y)15.91%
ROICexc(5y)13.84%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)16.13%
ROCE(5y)13.86%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y26.62%
ROICexc growth 5Y11.93%
OM growth 3Y7.74%
OM growth 5Y2.75%
PM growth 3Y13.82%
PM growth 5Y4.58%
GM growth 3Y3.98%
GM growth 5Y1.47%
F-Score7
Asset Turnover0.38
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 13.18 | ||
| Debt/EBITDA | 5.8 | ||
| Cap/Depr | 51.44% | ||
| Cap/Sales | 2.13% | ||
| Interest Coverage | 3.27 | ||
| Cash Conversion | 48.33% | ||
| Profit Quality | 110.52% | ||
| Current Ratio | 3.09 | ||
| Quick Ratio | 2.12 | ||
| Altman-Z | 2.67 |
F-Score7
WACC9.76%
ROIC/WACC1.52
Cap/Depr(3y)50.6%
Cap/Depr(5y)46.08%
Cap/Sales(3y)2.13%
Cap/Sales(5y)2.13%
Profit Quality(3y)110.44%
Profit Quality(5y)136%
High Growth Momentum
Growth
EPS 1Y (TTM)17.55%
EPS 3Y40.97%
EPS 5Y12.77%
EPS Q2Q%14.02%
EPS Next Y11.19%
EPS Next 2Y13.72%
EPS Next 3Y14.16%
EPS Next 5Y9.01%
Revenue 1Y (TTM)14.84%
Revenue growth 3Y18.28%
Revenue growth 5Y8.74%
Sales Q2Q%12.04%
Revenue Next Year11.94%
Revenue Next 2Y10.1%
Revenue Next 3Y9.17%
Revenue Next 5Y9.49%
EBIT growth 1Y18.41%
EBIT growth 3Y27.44%
EBIT growth 5Y11.72%
EBIT Next Year30.83%
EBIT Next 3Y15.48%
EBIT Next 5Y12.99%
FCF growth 1Y97.81%
FCF growth 3Y32.51%
FCF growth 5Y15.52%
OCF growth 1Y91%
OCF growth 3Y30.84%
OCF growth 5Y15.03%