TRINITY INDUSTRIES INC (TRN) Stock Fundamental Analysis
NYSE:TRN - New York Stock Exchange, Inc. - US8965221091 - Common Stock - Currency: USD
Taking everything into account, TRN scores 3 out of 10 in our fundamental rating. TRN was compared to 128 industry peers in the Machinery industry. There are concerns on the financial health of TRN while its profitability can be described as average. TRN has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year TRN was profitable.
TRN had a positive operating cash flow in the past year.
TRN had positive earnings in 4 of the past 5 years.
Of the past 5 years TRN 4 years had a positive operating cash flow.
1.2 Ratios
The Return On Assets of TRN (1.58%) is worse than 61.72% of its industry peers.
With a decent Return On Equity value of 12.99%, TRN is doing good in the industry, outperforming 64.06% of the companies in the same industry.
TRN has a worse Return On Invested Capital (4.34%) than 60.16% of its industry peers.
TRN had an Average Return On Invested Capital over the past 3 years of 3.30%. This is significantly below the industry average of 10.69%.
The 3 year average ROIC (3.30%) for TRN is below the current ROIC(4.34%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.58% | ||
| ROE | 12.99% | ||
| ROIC | 4.34% |
ROA(3y)1.15%
ROA(5y)0.79%
ROE(3y)9.74%
ROE(5y)7.69%
ROIC(3y)3.3%
ROIC(5y)2.93%
1.3 Margins
TRN has a Profit Margin of 4.79%. This is comparable to the rest of the industry: TRN outperforms 45.31% of its industry peers.
TRN's Profit Margin has been stable in the last couple of years.
TRN has a Operating Margin of 14.44%. This is in the better half of the industry: TRN outperforms 67.97% of its industry peers.
TRN's Operating Margin has improved in the last couple of years.
With a Gross Margin value of 22.62%, TRN is not doing good in the industry: 67.97% of the companies in the same industry are doing better.
TRN's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.44% | ||
| PM (TTM) | 4.79% | ||
| GM | 22.62% |
OM growth 3Y6.78%
OM growth 5Y2.31%
PM growth 3Y-27.93%
PM growth 5Y-0.11%
GM growth 3Y-2.46%
GM growth 5Y0.39%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so TRN is destroying value.
TRN has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for TRN has been reduced compared to 5 years ago.
Compared to 1 year ago, TRN has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.89, we must say that TRN is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 0.89, TRN is not doing good in the industry: 80.47% of the companies in the same industry are doing better.
The Debt to FCF ratio of TRN is 223.75, which is on the high side as it means it would take TRN, 223.75 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of TRN (223.75) is worse than 71.09% of its industry peers.
A Debt/Equity ratio of 5.33 is on the high side and indicates that TRN has dependencies on debt financing.
With a Debt to Equity ratio value of 5.33, TRN is not doing good in the industry: 91.41% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.33 | ||
| Debt/FCF | 223.75 | ||
| Altman-Z | 0.89 |
ROIC/WACC0.58
WACC7.47%
2.3 Liquidity
A Current Ratio of 1.70 indicates that TRN should not have too much problems paying its short term obligations.
With a Current ratio value of 1.70, TRN is not doing good in the industry: 64.06% of the companies in the same industry are doing better.
A Quick Ratio of 0.87 indicates that TRN may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.87, TRN is doing worse than 70.31% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.7 | ||
| Quick Ratio | 0.87 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 4.27% over the past year.
The Earnings Per Share has been growing slightly by 6.62% on average over the past years.
The Revenue has decreased by -9.40% in the past year.
Measured over the past years, TRN shows a small growth in Revenue. The Revenue has been growing by 0.49% on average per year.
EPS 1Y (TTM)4.27%
EPS 3Y43.68%
EPS 5Y6.62%
EPS Q2Q%-12.12%
Revenue 1Y (TTM)-9.4%
Revenue growth 3Y26.64%
Revenue growth 5Y0.49%
Sales Q2Q%-27.69%
3.2 Future
The Earnings Per Share is expected to grow by 4.90% on average over the next years.
Based on estimates for the next years, TRN will show a decrease in Revenue. The Revenue will decrease by -1.95% on average per year.
EPS Next Y-17.76%
EPS Next 2Y-0.95%
EPS Next 3Y4.9%
EPS Next 5YN/A
Revenue Next Year-21.79%
Revenue Next 2Y-8.83%
Revenue Next 3Y-1.95%
Revenue Next 5YN/A
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 decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
TRN is valuated correctly with a Price/Earnings ratio of 16.31.
Based on the Price/Earnings ratio, TRN is valued a bit cheaper than the industry average as 76.56% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.30. TRN is valued slightly cheaper when compared to this.
TRN is valuated correctly with a Price/Forward Earnings ratio of 16.24.
Based on the Price/Forward Earnings ratio, TRN is valued a bit cheaper than 67.97% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.76, TRN is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.31 | ||
| Fwd PE | 16.24 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TRN is valued a bit cheaper than the industry average as 68.75% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, TRN is valued a bit more expensive than the industry average as 70.31% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 90.68 | ||
| EV/EBITDA | 11.03 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)2.46
EPS Next 2Y-0.95%
EPS Next 3Y4.9%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.24%, TRN is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.81, TRN pays a better dividend. On top of this TRN pays more dividend than 97.66% of the companies listed in the same industry.
TRN's Dividend Yield is rather good when compared to the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.24% |
5.2 History
On average, the dividend of TRN grows each year by 11.90%, which is quite nice.
TRN has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of TRN decreased in the last 3 years.
Dividend Growth(5Y)11.9%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
TRN pays out 69.30% of its income as dividend. This is not a sustainable payout ratio.
The dividend of TRN is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP69.3%
EPS Next 2Y-0.95%
EPS Next 3Y4.9%
27.89
-0.43 (-1.52%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners86.78%
Inst Owner Change0%
Ins Owners1.23%
Ins Owner Change0%
Market Cap2.28B
Analysts46.67
Price Target28.05 (0.57%)
Short Float %3.23%
Short Ratio4.74
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.24% |
Yearly Dividend1.14
Dividend Growth(5Y)11.9%
DP69.3%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-4.31%
Min EPS beat(2)-12.99%
Max EPS beat(2)4.36%
EPS beat(4)2
Avg EPS beat(4)20.71%
Min EPS beat(4)-12.99%
Max EPS beat(4)95.06%
EPS beat(8)4
Avg EPS beat(8)16.25%
EPS beat(12)5
Avg EPS beat(12)3.72%
EPS beat(16)7
Avg EPS beat(16)3.5%
Revenue beat(2)0
Avg Revenue beat(2)-4.43%
Min Revenue beat(2)-6.49%
Max Revenue beat(2)-2.37%
Revenue beat(4)2
Avg Revenue beat(4)3.26%
Min Revenue beat(4)-6.49%
Max Revenue beat(4)13.63%
Revenue beat(8)6
Avg Revenue beat(8)6.33%
Revenue beat(12)7
Avg Revenue beat(12)-1.97%
Revenue beat(16)7
Avg Revenue beat(16)-7.69%
PT rev (1m)0%
PT rev (3m)-22.54%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-27.91%
EPS NY rev (1m)0%
EPS NY rev (3m)-13.64%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-4.92%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-6.61%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.31 | ||
| Fwd PE | 16.24 | ||
| P/S | 0.8 | ||
| P/FCF | 90.68 | ||
| P/OCF | 3.81 | ||
| P/B | 2.16 | ||
| P/tB | 2.74 | ||
| EV/EBITDA | 11.03 |
EPS(TTM)1.71
EY6.13%
EPS(NY)1.72
Fwd EY6.16%
FCF(TTM)0.31
FCFY1.1%
OCF(TTM)7.33
OCFY26.28%
SpS34.98
BVpS12.91
TBVpS10.19
PEG (NY)N/A
PEG (5Y)2.46
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.58% | ||
| ROE | 12.99% | ||
| ROCE | 5.07% | ||
| ROIC | 4.34% | ||
| ROICexc | 4.39% | ||
| ROICexgc | 4.75% | ||
| OM | 14.44% | ||
| PM (TTM) | 4.79% | ||
| GM | 22.62% | ||
| FCFM | 0.88% |
ROA(3y)1.15%
ROA(5y)0.79%
ROE(3y)9.74%
ROE(5y)7.69%
ROIC(3y)3.3%
ROIC(5y)2.93%
ROICexc(3y)3.37%
ROICexc(5y)2.98%
ROICexgc(3y)3.6%
ROICexgc(5y)3.17%
ROCE(3y)3.86%
ROCE(5y)3.42%
ROICexcg growth 3Y33.62%
ROICexcg growth 5Y2.84%
ROICexc growth 3Y32.68%
ROICexc growth 5Y2.96%
OM growth 3Y6.78%
OM growth 5Y2.31%
PM growth 3Y-27.93%
PM growth 5Y-0.11%
GM growth 3Y-2.46%
GM growth 5Y0.39%
F-Score6
Asset Turnover0.33
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.33 | ||
| Debt/FCF | 223.75 | ||
| Debt/EBITDA | 7.94 | ||
| Cap/Depr | 194.44% | ||
| Cap/Sales | 20.07% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 84.6% | ||
| Profit Quality | 18.35% | ||
| Current Ratio | 1.7 | ||
| Quick Ratio | 0.87 | ||
| Altman-Z | 0.89 |
F-Score6
WACC7.47%
ROIC/WACC0.58
Cap/Depr(3y)264.91%
Cap/Depr(5y)254.88%
Cap/Sales(3y)30.68%
Cap/Sales(5y)32.99%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)4.27%
EPS 3Y43.68%
EPS 5Y6.62%
EPS Q2Q%-12.12%
EPS Next Y-17.76%
EPS Next 2Y-0.95%
EPS Next 3Y4.9%
EPS Next 5YN/A
Revenue 1Y (TTM)-9.4%
Revenue growth 3Y26.64%
Revenue growth 5Y0.49%
Sales Q2Q%-27.69%
Revenue Next Year-21.79%
Revenue Next 2Y-8.83%
Revenue Next 3Y-1.95%
Revenue Next 5YN/A
EBIT growth 1Y7.29%
EBIT growth 3Y35.23%
EBIT growth 5Y2.81%
EBIT Next Year50.15%
EBIT Next 3Y21.08%
EBIT Next 5YN/A
FCF growth 1Y102.48%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y804.84%
OCF growth 3Y-2.11%
OCF growth 5Y7.83%