TRINITY INDUSTRIES INC (TRN) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TRN - US8965221091 - Common Stock
27.03 USD
-0.54 (-1.96%)
27.03 USD
0 (0%)
We assign a fundamental rating of 3 out of 10 to TRN. TRN was compared to 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 does not seem to be growing, but still is valued expensively.
1. Profitability
1.1 Basic Checks
- TRN had positive earnings in the past year.
- TRN had a positive operating cash flow in the past year.
- Of the past 5 years TRN 4 years were profitable.
- TRN had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
- Looking at the Return On Assets, with a value of 1.07%, TRN is doing worse than 63.64% of the companies in the same industry.
- The Return On Equity of TRN (9.53%) is better than 60.61% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 3.72%, TRN is doing worse than 64.39% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for TRN is significantly below the industry average of 10.24%.
- The 3 year average ROIC (3.30%) for TRN is below the current ROIC(3.72%), indicating increased profibility in the last year.
| 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 in line with its industry peers.
- TRN's Profit Margin has been stable in the last couple of years.
- With a decent Operating Margin value of 16.82%, TRN is doing good in the industry, outperforming 78.79% of the companies in the same industry.
- In the last couple of years the Operating Margin of TRN has grown nicely.
- TRN's Gross Margin of 26.30% is on the low side compared to the rest of the industry. TRN is outperformed by 60.61% of its industry peers.
- TRN's Gross Margin has been stable in the last couple of years.
| 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%
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.
- 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
- TRN has an Altman-Z score of 0.77. This is a bad value and indicates that TRN is not financially healthy and even has some risk of bankruptcy.
- The Altman-Z score of TRN (0.77) is worse than 80.30% of its industry peers.
- A Debt/Equity ratio of 5.94 is on the high side and indicates that TRN has dependencies on debt financing.
- The Debt to Equity ratio of TRN (5.94) is worse than 88.64% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.94 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.77 |
ROIC/WACC0.51
WACC7.3%
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.
- TRN has a Current ratio (1.88) which is in line with its industry peers.
- TRN has a Quick Ratio of 1.88. This is a bad value and indicates that TRN is not financially healthy enough and could expect problems in meeting its short term obligations.
- TRN has a worse Quick ratio (0.80) than 77.27% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.88 | ||
| Quick Ratio | 0.8 |
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%.
- 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)-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
- The Earnings Per Share is expected to grow by 3.12% on average over the next years.
- The Revenue is expected to decrease by -9.12% on average over the next years.
EPS Next Y-10.54%
EPS Next 2Y-5.42%
EPS Next 3Y3.12%
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.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 22.16, the valuation of TRN can be described as rather expensive.
- Based on the Price/Earnings ratio, TRN is valued a bit cheaper than 66.67% of the companies in the same industry.
- When comparing the Price/Earnings ratio of TRN to the average of the S&P500 Index (27.21), we can say TRN is valued inline with the index average.
- Based on the Price/Forward Earnings ratio of 17.27, the valuation of TRN can be described as rather expensive.
- TRN's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. TRN is cheaper than 76.52% of the companies in the same industry.
- When comparing the Price/Forward Earnings ratio of TRN to the average of the S&P500 Index (24.26), we can say TRN is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.16 | ||
| Fwd PE | 17.27 |
4.2 Price Multiples
- TRN's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. TRN is cheaper than 70.45% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.15 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)3.35
EPS Next 2Y-5.42%
EPS Next 3Y3.12%
5. Dividend
5.1 Amount
- TRN has a Yearly Dividend Yield of 4.51%, which is a nice return.
- TRN's Dividend Yield is rather good when compared to the industry average which is at 0.98. TRN pays more dividend than 99.24% of the companies in the same industry.
- TRN's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.51% |
5.2 History
- The dividend of TRN is nicely growing with an annual growth rate of 11.90%!
- TRN has been paying a dividend for at least 10 years, so it has a reliable track record.
- TRN has decreased its dividend in the last 3 years.
Dividend Growth(5Y)11.9%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
- 102.41% of the earnings are spent on dividend by TRN. 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-5.42%
EPS Next 3Y3.12%
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 2 / 10 to TRINITY INDUSTRIES INC (TRN). This can be considered as Overvalued.
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%.