TE CONNECTIVITY PLC (TEL) Stock Fundamental Analysis
NYSE:TEL - New York Stock Exchange, Inc. - IE000IVNQZ81 - Common Stock - Currency: USD
Taking everything into account, TEL scores 7 out of 10 in our fundamental rating. TEL was compared to 124 industry peers in the Electronic Equipment, Instruments & Components industry. TEL scores excellent points on both the profitability and health parts. This is a solid base for a good stock. TEL is not valued too expensively and it also shows a decent growth rate. Finally TEL also has an excellent dividend rating. These ratings would make TEL suitable for dividend and quality investing!
1. Profitability
1.1 Basic Checks
In the past year TEL was profitable.
In the past year TEL had a positive cash flow from operations.
Of the past 5 years TEL 4 years were profitable.
TEL had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 8.55%, TEL belongs to the top of the industry, outperforming 86.67% of the companies in the same industry.
With an excellent Return On Equity value of 15.46%, TEL belongs to the best of the industry, outperforming 85.00% of the companies in the same industry.
TEL's Return On Invested Capital of 14.02% is amongst the best of the industry. TEL outperforms 90.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TEL is significantly above the industry average of 8.95%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.55% | ||
| ROE | 15.46% | ||
| ROIC | 14.02% |
ROA(3y)11.48%
ROA(5y)8.75%
ROE(3y)21.62%
ROE(5y)16.71%
ROIC(3y)14.05%
ROIC(5y)12.99%
1.3 Margins
Looking at the Profit Margin, with a value of 12.10%, TEL belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
TEL's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 18.93%, TEL belongs to the top of the industry, outperforming 97.50% of the companies in the same industry.
In the last couple of years the Operating Margin of TEL has grown nicely.
Looking at the Gross Margin, with a value of 34.65%, TEL is in line with its industry, outperforming 59.17% of the companies in the same industry.
TEL's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.93% | ||
| PM (TTM) | 12.1% | ||
| GM | 34.65% |
OM growth 3Y1.36%
OM growth 5Y2.3%
PM growth 3Y9.97%
PM growth 5Y8%
GM growth 3Y1.69%
GM growth 5Y1.05%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), TEL is creating value.
Compared to 1 year ago, TEL has less shares outstanding
The number of shares outstanding for TEL has been reduced compared to 5 years ago.
The debt/assets ratio for TEL has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 4.90 indicates that TEL is not in any danger for bankruptcy at the moment.
TEL has a better Altman-Z score (4.90) than 75.83% of its industry peers.
The Debt to FCF ratio of TEL is 1.45, which is an excellent value as it means it would take TEL, only 1.45 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.45, TEL is in the better half of the industry, outperforming 78.33% of the companies in the same industry.
TEL has a Debt/Equity ratio of 0.26. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of TEL (0.26) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.26 | ||
| Debt/FCF | 1.45 | ||
| Altman-Z | 4.9 |
ROIC/WACC2.11
WACC6.64%
2.3 Liquidity
A Current Ratio of 1.68 indicates that TEL should not have too much problems paying its short term obligations.
TEL's Current ratio of 1.68 is on the low side compared to the rest of the industry. TEL is outperformed by 69.17% of its industry peers.
A Quick Ratio of 1.10 indicates that TEL should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.10, TEL is doing worse than 74.17% of the companies in the same industry.
The current and quick ratio evaluation for TEL is rather negative, while it does have 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 | 1.68 | ||
| Quick Ratio | 1.1 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 8.95% over the past year.
TEL shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.41% yearly.
The Revenue has decreased by -1.09% in the past year.
The Revenue has been growing slightly by 3.33% on average over the past years.
EPS 1Y (TTM)8.95%
EPS 3Y5.06%
EPS 5Y6.41%
EPS Q2Q%5.98%
Revenue 1Y (TTM)-1.09%
Revenue growth 3Y2.02%
Revenue growth 5Y3.33%
Sales Q2Q%0.13%
3.2 Future
The Earnings Per Share is expected to grow by 8.08% on average over the next years. This is quite good.
TEL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.70% yearly.
EPS Next Y8.07%
EPS Next 2Y9.43%
EPS Next 3Y9.51%
EPS Next 5Y8.08%
Revenue Next Year2.28%
Revenue Next 2Y4.46%
Revenue Next 3Y5%
Revenue Next 5Y5.7%
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 accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 20.14, the valuation of TEL can be described as rather expensive.
TEL's Price/Earnings ratio is a bit cheaper when compared to the industry. TEL is cheaper than 76.67% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 29.63. TEL is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 17.07, the valuation of TEL can be described as rather expensive.
Based on the Price/Forward Earnings ratio, TEL is valued a bit cheaper than the industry average as 79.17% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.68, TEL is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.14 | ||
| Fwd PE | 17.07 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TEL indicates a somewhat cheap valuation: TEL is cheaper than 75.00% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TEL indicates a rather cheap valuation: TEL is cheaper than 82.50% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.88 | ||
| EV/EBITDA | 12.94 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates TEL does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of TEL may justify a higher PE ratio.
PEG (NY)2.5
PEG (5Y)3.14
EPS Next 2Y9.43%
EPS Next 3Y9.51%
5. Dividend
5.1 Amount
TEL has a Yearly Dividend Yield of 1.67%.
Compared to an average industry Dividend Yield of 1.92, TEL pays a better dividend. On top of this TEL pays more dividend than 92.50% of the companies listed in the same industry.
TEL's Dividend Yield is slightly below the S&P500 average, which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.67% |
5.2 History
The dividend of TEL is nicely growing with an annual growth rate of 6.79%!
TEL has paid a dividend for at least 10 years, which is a reliable track record.
TEL has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)6.79%
Div Incr Years14
Div Non Decr Years17
5.3 Sustainability
39.94% of the earnings are spent on dividend by TEL. This is a low number and sustainable payout ratio.
TEL's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP39.94%
EPS Next 2Y9.43%
EPS Next 3Y9.51%
154.51
-1.27 (-0.82%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)
Earnings (Next)
Inst Owners92.28%
Inst Owner Change6.11%
Ins Owners0.12%
Ins Owner Change4.74%
Market Cap46.10B
Analysts75.2
Price Target176.02 (13.92%)
Short Float %0.96%
Short Ratio1.78
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.67% |
Yearly Dividend2.48
Dividend Growth(5Y)6.79%
DP39.94%
Div Incr Years14
Div Non Decr Years17
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.71%
Min EPS beat(2)-0.77%
Max EPS beat(2)2.19%
EPS beat(4)3
Avg EPS beat(4)0.96%
Min EPS beat(4)-0.77%
Max EPS beat(4)2.19%
EPS beat(8)7
Avg EPS beat(8)2.45%
EPS beat(12)10
Avg EPS beat(12)2.56%
EPS beat(16)14
Avg EPS beat(16)3.61%
Revenue beat(2)1
Avg Revenue beat(2)-1.25%
Min Revenue beat(2)-2.74%
Max Revenue beat(2)0.25%
Revenue beat(4)1
Avg Revenue beat(4)-1.29%
Min Revenue beat(4)-2.74%
Max Revenue beat(4)0.25%
Revenue beat(8)2
Avg Revenue beat(8)-0.55%
Revenue beat(12)6
Avg Revenue beat(12)0.61%
Revenue beat(16)10
Avg Revenue beat(16)0.99%
PT rev (1m)1.36%
PT rev (3m)0.72%
EPS NQ rev (1m)-1.71%
EPS NQ rev (3m)-3.51%
EPS NY rev (1m)-0.16%
EPS NY rev (3m)-0.08%
Revenue NQ rev (1m)-3.26%
Revenue NQ rev (3m)-5.97%
Revenue NY rev (1m)-2.15%
Revenue NY rev (3m)-2.3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.14 | ||
| Fwd PE | 17.07 | ||
| P/S | 2.91 | ||
| P/FCF | 15.88 | ||
| P/OCF | 12.68 | ||
| P/B | 3.71 | ||
| P/tB | 8.54 | ||
| EV/EBITDA | 12.94 |
EPS(TTM)7.67
EY4.96%
EPS(NY)9.05
Fwd EY5.86%
FCF(TTM)9.73
FCFY6.3%
OCF(TTM)12.19
OCFY7.89%
SpS53.13
BVpS41.59
TBVpS18.09
PEG (NY)2.5
PEG (5Y)3.14
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.55% | ||
| ROE | 15.46% | ||
| ROCE | 16.7% | ||
| ROIC | 14.02% | ||
| ROICexc | 15.07% | ||
| ROICexgc | 25.97% | ||
| OM | 18.93% | ||
| PM (TTM) | 12.1% | ||
| GM | 34.65% | ||
| FCFM | 18.31% |
ROA(3y)11.48%
ROA(5y)8.75%
ROE(3y)21.62%
ROE(5y)16.71%
ROIC(3y)14.05%
ROIC(5y)12.99%
ROICexc(3y)15.24%
ROICexc(5y)14.04%
ROICexgc(3y)26.54%
ROICexgc(5y)25.01%
ROCE(3y)16.74%
ROCE(5y)15.48%
ROICexcg growth 3Y-1.57%
ROICexcg growth 5Y1.2%
ROICexc growth 3Y0.91%
ROICexc growth 5Y3.66%
OM growth 3Y1.36%
OM growth 5Y2.3%
PM growth 3Y9.97%
PM growth 5Y8%
GM growth 3Y1.69%
GM growth 5Y1.05%
F-Score7
Asset Turnover0.71
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.26 | ||
| Debt/FCF | 1.45 | ||
| Debt/EBITDA | 0.86 | ||
| Cap/Depr | 89.73% | ||
| Cap/Sales | 4.63% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 95.21% | ||
| Profit Quality | 151.3% | ||
| Current Ratio | 1.68 | ||
| Quick Ratio | 1.1 | ||
| Altman-Z | 4.9 |
F-Score7
WACC6.64%
ROIC/WACC2.11
Cap/Depr(3y)90.78%
Cap/Depr(5y)88.17%
Cap/Sales(3y)4.52%
Cap/Sales(5y)4.56%
Profit Quality(3y)94.42%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)8.95%
EPS 3Y5.06%
EPS 5Y6.41%
EPS Q2Q%5.98%
EPS Next Y8.07%
EPS Next 2Y9.43%
EPS Next 3Y9.51%
EPS Next 5Y8.08%
Revenue 1Y (TTM)-1.09%
Revenue growth 3Y2.02%
Revenue growth 5Y3.33%
Sales Q2Q%0.13%
Revenue Next Year2.28%
Revenue Next 2Y4.46%
Revenue Next 3Y5%
Revenue Next 5Y5.7%
EBIT growth 1Y7.91%
EBIT growth 3Y3.4%
EBIT growth 5Y5.71%
EBIT Next Year29.75%
EBIT Next 3Y14.18%
EBIT Next 5Y10.8%
FCF growth 1Y66.97%
FCF growth 3Y12.09%
FCF growth 5Y10.83%
OCF growth 1Y44.46%
OCF growth 3Y9.12%
OCF growth 5Y7.5%