Overall TRN gets a fundamental rating of 3 out of 10. We evaluated TRN against 132 industry peers in the Machinery industry. There are concerns on the financial health of TRN while its profitability can be described as average. TRN is valued correctly, but it does not seem to be growing.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

TRN had positive earnings in the past year.
In the past year TRN had a positive cash flow from operations.
TRN had positive earnings in 4 of the past 5 years.
TRN had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

TRN's Return On Assets of 1.07% is on the low side compared to the rest of the industry. TRN is outperformed by 63.64% of its industry peers.
With a decent Return On Equity value of 9.53%, TRN is doing good in the industry, outperforming 60.61% of the companies in the same industry.
TRN has a Return On Invested Capital of 3.72%. This is in the lower half of the industry: TRN underperforms 64.39% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TRN is significantly below the industry average of 10.18%.
The last Return On Invested Capital (3.72%) for TRN is above the 3 year average (3.30%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	1.07%
ROE	9.53%
ROIC	3.72%

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 (4.39%) which is comparable to the rest of the industry.
TRN's Profit Margin has been stable in the last couple of years.
TRN has a better Operating Margin (16.82%) than 78.79% of its industry peers.
In the last couple of years the Operating Margin of TRN has grown nicely.
TRN has a worse Gross Margin (26.30%) than 60.61% of its industry peers.
In the last couple of years the Gross Margin of TRN has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	16.82%
PM (TTM)	4.39%
GM	26.3%

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%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), TRN is destroying value.
Compared to 1 year ago, TRN has about the same amount of shares outstanding.
Compared to 5 years ago, TRN has less shares outstanding
The debt/assets ratio for TRN has been reduced compared to a year ago.

2.2 Solvency

Based on the Altman-Z score of 0.77, we must say that TRN is in the distress zone and has some risk of bankruptcy.
TRN has a Altman-Z score of 0.77. This is in the lower half of the industry: TRN underperforms 79.55% of its industry peers.
TRN has a Debt/Equity ratio of 5.94. This is a high value indicating a heavy dependency on external financing.
TRN's Debt to Equity ratio of 5.94 is on the low side compared to the rest of the industry. TRN is outperformed by 88.64% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	5.94
Debt/FCF	N/A
Altman-Z	0.77

ROIC/WACC0.5

WACC7.45%

2.3 Liquidity

TRN has a Current Ratio of 1.88. This is a normal value and indicates that TRN is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.88, TRN perfoms like the industry average, outperforming 42.42% of the companies in the same industry.
A Quick Ratio of 0.80 indicates that TRN may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.80, TRN is doing worse than 76.52% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	1.88
Quick Ratio	0.8

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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

TRN shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -44.04%.
The Earnings Per Share has been growing slightly by 6.62% on average over the past years.
TRN shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -33.03%.
The Revenue has been growing slightly by 0.49% on average over the past years.

EPS 1Y (TTM)-44.04%

EPS 3Y43.68%

EPS 5Y6.62%

EPS Q2Q%0%

Revenue 1Y (TTM)-33.03%

Revenue growth 3Y26.64%

Revenue growth 5Y0.49%

Sales Q2Q%-43.15%

3.2 Future

TRN is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.90% yearly.
TRN is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -9.12% yearly.

EPS Next Y35.63%

EPS Next 2Y-3.9%

EPS Next 3Y4.9%

EPS Next 5YN/A

Revenue Next Year-31.4%

Revenue Next 2Y-15.67%

Revenue Next 3Y-9.12%

Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 23.93, TRN is valued on the expensive side.
63.64% of the companies in the same industry are more expensive than TRN, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 28.32, TRN is valued at the same level.
TRN is valuated rather expensively with a Price/Forward Earnings ratio of 18.07.
TRN's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. TRN is cheaper than 74.24% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 25.57. TRN is valued slightly cheaper when compared to this.

		Industry Rank	Sector Rank
PE	23.93
Fwd PE	18.07

4.2 Price Multiples

70.45% of the companies in the same industry are more expensive than TRN, based on the Enterprise Value to EBITDA ratio.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	12.29

4.3 Compensation for Growth

TRN's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.

PEG (NY)0.67

PEG (5Y)3.61

EPS Next 2Y-3.9%

EPS Next 3Y4.9%

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5. Dividend

5.1 Amount

TRN has a Yearly Dividend Yield of 4.32%, which is a nice return.
Compared to an average industry Dividend Yield of 1.01, TRN pays a better dividend. On top of this TRN pays more dividend than 98.48% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 1.83, TRN pays a better dividend.

		Industry Rank	Sector Rank
Dividend Yield	4.32%

5.2 History

The dividend of TRN is nicely growing with an annual growth rate of 11.90%!
TRN has paid a dividend for at least 10 years, which is 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 102.41% 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.

DP102.41%

EPS Next 2Y-3.9%

EPS Next 3Y4.9%

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TRINITY INDUSTRIES INC / TRN FAQ

What is the ChartMill fundamental rating of TRINITY INDUSTRIES INC (TRN) stock?

ChartMill assigns a fundamental rating of 3 / 10 to TRN.

Can you provide the valuation status for TRINITY INDUSTRIES INC?

ChartMill assigns a valuation rating of 4 / 10 to TRINITY INDUSTRIES INC (TRN). This can be considered as Fairly Valued.

Can you provide the profitability details for TRINITY INDUSTRIES INC?

TRINITY INDUSTRIES INC (TRN) has a profitability rating of 4 / 10.

Can you provide the financial health for TRN stock?

The financial health rating of TRINITY INDUSTRIES INC (TRN) is 2 / 10.

How sustainable is the dividend of TRINITY INDUSTRIES INC (TRN) stock?

The dividend rating of TRINITY INDUSTRIES INC (TRN) is 6 / 10 and the dividend payout ratio is 102.41%.