TE CONNECTIVITY PLC (TEL) Stock Fundamental Analysis
NYSE:TEL - New York Stock Exchange, Inc. - IE000IVNQZ81 - Common Stock
We assign a fundamental rating of 7 out of 10 to TEL. 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.
TEL had a positive operating cash flow in the past year.
Of the past 5 years TEL 4 years were profitable.
In the past 5 years TEL always reported a positive cash flow from operatings.
1.2 Ratios
TEL's Return On Assets of 13.97% is amongst the best of the industry. TEL outperforms 94.17% of its industry peers.
With an excellent Return On Equity value of 25.84%, TEL belongs to the best of the industry, outperforming 94.17% of the companies in the same industry.
With an excellent Return On Invested Capital value of 13.83%, TEL belongs to the best of the industry, outperforming 90.83% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for TEL is significantly above the industry average of 9.03%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.97% | ||
| ROE | 25.84% | ||
| ROIC | 13.83% |
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
TEL's Profit Margin of 20.15% is amongst the best of the industry. TEL outperforms 95.83% of its industry peers.
In the last couple of years the Profit Margin of TEL has grown nicely.
Looking at the Operating Margin, with a value of 18.83%, TEL belongs to the top of the industry, outperforming 97.50% of the companies in the same industry.
TEL's Operating Margin has improved in the last couple of years.
TEL's Gross Margin of 34.43% is in line compared to the rest of the industry. TEL outperforms 57.50% of its industry peers.
TEL's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.83% | ||
| PM (TTM) | 20.15% | ||
| GM | 34.43% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so TEL is creating value.
The number of shares outstanding for TEL has been reduced compared to 1 year ago.
Compared to 5 years ago, TEL has less shares outstanding
The debt/assets ratio for TEL has been reduced compared to a year ago.
2.2 Solvency
TEL has an Altman-Z score of 4.70. This indicates that TEL is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of TEL (4.70) is better than 70.83% of its industry peers.
The Debt to FCF ratio of TEL is 1.50, which is an excellent value as it means it would take TEL, only 1.50 years of fcf income to pay off all of its debts.
TEL has a better Debt to FCF ratio (1.50) than 78.33% of its industry peers.
TEL has a Debt/Equity ratio of 0.27. This is a healthy value indicating a solid balance between debt and equity.
TEL has a Debt to Equity ratio (0.27) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.27 | ||
| Debt/FCF | 1.5 | ||
| Altman-Z | 4.7 |
ROIC/WACC2.09
WACC6.62%
2.3 Liquidity
A Current Ratio of 1.61 indicates that TEL should not have too much problems paying its short term obligations.
With a Current ratio value of 1.61, TEL is not doing good in the industry: 73.33% of the companies in the same industry are doing better.
TEL has a Quick Ratio of 1.08. This is a normal value and indicates that TEL is financially healthy and should not expect problems in meeting its short term obligations.
TEL's Quick ratio of 1.08 is on the low side compared to the rest of the industry. TEL is outperformed by 75.00% of its industry peers.
TEL 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 | 1.61 | ||
| Quick Ratio | 1.08 |
3. Growth
3.1 Past
TEL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.33%, which is quite good.
Measured over the past 5 years, TEL shows a small growth in Earnings Per Share. The EPS has been growing by 6.41% on average per year.
The Revenue has decreased by -1.18% in the past year.
The Revenue has been growing slightly by 3.33% on average over the past years.
EPS 1Y (TTM)12.33%
EPS 3Y5.06%
EPS 5Y6.41%
EPS Q2Q%9.55%
Revenue 1Y (TTM)-1.18%
Revenue growth 3Y2.02%
Revenue growth 5Y3.33%
Sales Q2Q%0.82%
3.2 Future
The Earnings Per Share is expected to grow by 9.79% on average over the next years. This is quite good.
The Revenue is expected to grow by 5.58% on average over the next years.
EPS Next Y8.25%
EPS Next 2Y9.89%
EPS Next 3Y9.6%
EPS Next 5Y9.79%
Revenue Next Year4.54%
Revenue Next 2Y5.62%
Revenue Next 3Y5.34%
Revenue Next 5Y5.58%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
TEL is valuated rather expensively with a Price/Earnings ratio of 19.62.
80.83% of the companies in the same industry are more expensive than TEL, based on the Price/Earnings ratio.
TEL is valuated rather cheaply when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 18.12, the valuation of TEL can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TEL indicates a somewhat cheap valuation: TEL is cheaper than 79.17% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 24.44. TEL is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.62 | ||
| Fwd PE | 18.12 |
4.2 Price Multiples
TEL's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. TEL is cheaper than 75.00% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, TEL is valued cheaper than 84.17% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.86 | ||
| EV/EBITDA | 12.4 |
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.
TEL has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.38
PEG (5Y)3.06
EPS Next 2Y9.89%
EPS Next 3Y9.6%
5. Dividend
5.1 Amount
TEL has a Yearly Dividend Yield of 1.81%.
Compared to an average industry Dividend Yield of 1.87, TEL pays a better dividend. On top of this TEL pays more dividend than 94.17% of the companies listed in the same industry.
Compared to the average S&P500 Dividend Yield of 2.28, TEL is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.81% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)6.79%
Div Incr Years14
Div Non Decr Years17
5.3 Sustainability
23.80% of the earnings are spent on dividend by TEL. This is a low number and sustainable payout ratio.
TEL's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP23.8%
EPS Next 2Y9.89%
EPS Next 3Y9.6%
TE CONNECTIVITY PLC
NYSE:TEL (1/21/2025, 8:04:00 PM)
After market: 148.3 0 (0%)148.3
+2.58 (+1.77%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)
Earnings (Next)
Inst Owners94.49%
Inst Owner Change0.26%
Ins Owners0.12%
Ins Owner Change4.42%
Market Cap44.37B
Analysts74.62
Price Target172.97 (16.64%)
Short Float %1.29%
Short Ratio2.56
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.81% |
Yearly Dividend2.48
Dividend Growth(5Y)6.79%
DP23.8%
Div Incr Years14
Div Non Decr Years17
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.47%
Min EPS beat(2)-0.77%
Max EPS beat(2)1.7%
EPS beat(4)3
Avg EPS beat(4)2.03%
Min EPS beat(4)-0.77%
Max EPS beat(4)6.47%
EPS beat(8)7
Avg EPS beat(8)2.22%
EPS beat(12)10
Avg EPS beat(12)3.04%
EPS beat(16)14
Avg EPS beat(16)4.32%
Revenue beat(2)1
Avg Revenue beat(2)-0.85%
Min Revenue beat(2)-1.95%
Max Revenue beat(2)0.25%
Revenue beat(4)1
Avg Revenue beat(4)-1.06%
Min Revenue beat(4)-1.95%
Max Revenue beat(4)0.25%
Revenue beat(8)3
Avg Revenue beat(8)-0.09%
Revenue beat(12)7
Avg Revenue beat(12)0.96%
Revenue beat(16)11
Avg Revenue beat(16)1.6%
PT rev (1m)0.2%
PT rev (3m)-1.39%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.87%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.65%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.71%
Revenue NY rev (1m)-0.16%
Revenue NY rev (3m)-1.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.62 | ||
| Fwd PE | 18.12 | ||
| P/S | 2.8 | ||
| P/FCF | 15.86 | ||
| P/OCF | 12.76 | ||
| P/B | 3.59 | ||
| P/tB | 8.25 | ||
| EV/EBITDA | 12.4 |
EPS(TTM)7.56
EY5.1%
EPS(NY)8.18
Fwd EY5.52%
FCF(TTM)9.35
FCFY6.3%
OCF(TTM)11.62
OCFY7.84%
SpS52.96
BVpS41.3
TBVpS17.98
PEG (NY)2.38
PEG (5Y)3.06
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.97% | ||
| ROE | 25.84% | ||
| ROCE | 16.47% | ||
| ROIC | 13.83% | ||
| ROICexc | 14.92% | ||
| ROICexgc | 25.52% | ||
| OM | 18.83% | ||
| PM (TTM) | 20.15% | ||
| GM | 34.43% | ||
| FCFM | 17.65% |
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 Turnover0.69
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.27 | ||
| Debt/FCF | 1.5 | ||
| Debt/EBITDA | 0.87 | ||
| Cap/Depr | 82.32% | ||
| Cap/Sales | 4.29% | ||
| Interest Coverage | 46.61 | ||
| Cash Conversion | 91.28% | ||
| Profit Quality | 87.6% | ||
| Current Ratio | 1.61 | ||
| Quick Ratio | 1.08 | ||
| Altman-Z | 4.7 |
F-Score7
WACC6.62%
ROIC/WACC2.09
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)12.33%
EPS 3Y5.06%
EPS 5Y6.41%
EPS Q2Q%9.55%
EPS Next Y8.25%
EPS Next 2Y9.89%
EPS Next 3Y9.6%
EPS Next 5Y9.79%
Revenue 1Y (TTM)-1.18%
Revenue growth 3Y2.02%
Revenue growth 5Y3.33%
Sales Q2Q%0.82%
Revenue Next Year4.54%
Revenue Next 2Y5.62%
Revenue Next 3Y5.34%
Revenue Next 5Y5.58%
EBIT growth 1Y11.51%
EBIT growth 3Y3.4%
EBIT growth 5Y5.71%
EBIT Next Year34.66%
EBIT Next 3Y13.87%
EBIT Next 5Y12.39%
FCF growth 1Y16.54%
FCF growth 3Y12.09%
FCF growth 5Y10.83%
OCF growth 1Y11.02%
OCF growth 3Y9.12%
OCF growth 5Y7.5%