TORO CO (TTC) Stock Fundamental Analysis
NYSE:TTC - New York Stock Exchange, Inc. - US8910921084 - Common Stock - Currency: USD
Taking everything into account, TTC scores 5 out of 10 in our fundamental rating. TTC was compared to 128 industry peers in the Machinery industry. TTC scores excellent on profitability, but there are some minor concerns on its financial health. TTC has a valuation in line with the averages, but on the other hand it scores bad on growth. TTC also has an excellent dividend rating. This makes TTC very considerable for dividend investing!
1. Profitability
1.1 Basic Checks
In the past year TTC was profitable.
In the past year TTC had a positive cash flow from operations.
TTC had positive earnings in each of the past 5 years.
TTC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
TTC's Return On Assets of 11.69% is amongst the best of the industry. TTC outperforms 84.80% of its industry peers.
TTC has a better Return On Equity (26.99%) than 90.40% of its industry peers.
Looking at the Return On Invested Capital, with a value of 16.78%, TTC belongs to the top of the industry, outperforming 90.40% of the companies in the same industry.
TTC had an Average Return On Invested Capital over the past 3 years of 17.81%. This is significantly above the industry average of 11.00%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.69% | ||
| ROE | 26.99% | ||
| ROIC | 16.78% |
ROA(3y)11.07%
ROA(5y)11.74%
ROE(3y)27.2%
ROE(5y)29.36%
ROIC(3y)17.81%
ROIC(5y)18.34%
1.3 Margins
The Profit Margin of TTC (9.14%) is better than 66.40% of its industry peers.
TTC's Profit Margin has been stable in the last couple of years.
With a Operating Margin value of 11.63%, TTC perfoms like the industry average, outperforming 60.00% of the companies in the same industry.
TTC's Operating Margin has improved in the last couple of years.
TTC has a Gross Margin (33.80%) which is comparable to the rest of the industry.
TTC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.63% | ||
| PM (TTM) | 9.14% | ||
| GM | 33.8% |
OM growth 3Y-3.14%
OM growth 5Y2.35%
PM growth 3Y-4.07%
PM growth 5Y0.92%
GM growth 3Y0%
GM growth 5Y0.24%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), TTC is creating some value.
The number of shares outstanding for TTC has been reduced compared to 1 year ago.
Compared to 5 years ago, TTC has less shares outstanding
Compared to 1 year ago, TTC has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 5.04 indicates that TTC is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 5.04, TTC is doing good in the industry, outperforming 76.80% of the companies in the same industry.
TTC has a debt to FCF ratio of 1.98. This is a very positive value and a sign of high solvency as it would only need 1.98 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 1.98, TTC is doing good in the industry, outperforming 80.00% of the companies in the same industry.
TTC has a Debt/Equity ratio of 0.59. This is a neutral value indicating TTC is somewhat dependend on debt financing.
The Debt to Equity ratio of TTC (0.59) is worse than 64.00% of its industry peers.
Although TTC does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | 1.98 | ||
| Altman-Z | 5.04 |
ROIC/WACC1.59
WACC10.58%
2.3 Liquidity
A Current Ratio of 1.81 indicates that TTC should not have too much problems paying its short term obligations.
The Current ratio of TTC (1.81) is worse than 64.80% of its industry peers.
A Quick Ratio of 0.74 indicates that TTC may have some problems paying its short term obligations.
The Quick ratio of TTC (0.74) is worse than 83.20% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.81 | ||
| Quick Ratio | 0.74 |
3. Growth
3.1 Past
TTC shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -1.18%.
Measured over the past 5 years, TTC shows a small growth in Earnings Per Share. The EPS has been growing by 6.88% on average per year.
TTC shows a small growth in Revenue. In the last year, the Revenue has grown by 0.67%.
TTC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.87% yearly.
EPS 1Y (TTM)-1.18%
EPS 3Y4.83%
EPS 5Y6.88%
EPS Q2Q%33.8%
Revenue 1Y (TTM)0.67%
Revenue growth 3Y5%
Revenue growth 5Y7.87%
Sales Q2Q%9.44%
3.2 Future
The Earnings Per Share is expected to grow by 4.60% on average over the next years.
TTC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.73% yearly.
EPS Next Y4.46%
EPS Next 2Y6.77%
EPS Next 3Y7.44%
EPS Next 5Y4.6%
Revenue Next Year0.26%
Revenue Next 2Y1.72%
Revenue Next 3Y2.03%
Revenue Next 5Y1.73%
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
The Price/Earnings ratio is 19.18, which indicates a rather expensive current valuation of TTC.
TTC's Price/Earnings ratio is a bit cheaper when compared to the industry. TTC is cheaper than 68.80% of the companies in the same industry.
When comparing the Price/Earnings ratio of TTC to the average of the S&P500 Index (29.63), we can say TTC is valued slightly cheaper.
TTC is valuated rather expensively with a Price/Forward Earnings ratio of 18.36.
66.40% of the companies in the same industry are more expensive than TTC, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 22.68. TTC is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.18 | ||
| Fwd PE | 18.36 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TTC indicates a somewhat cheap valuation: TTC is cheaper than 61.60% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TTC indicates a somewhat cheap valuation: TTC is cheaper than 79.20% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.29 | ||
| EV/EBITDA | 13.47 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates TTC does not grow enough to justify the current Price/Earnings ratio.
TTC has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)4.3
PEG (5Y)2.79
EPS Next 2Y6.77%
EPS Next 3Y7.44%
5. Dividend
5.1 Amount
TTC has a Yearly Dividend Yield of 1.87%. Purely for dividend investing, there may be better candidates out there.
TTC's Dividend Yield is rather good when compared to the industry average which is at 1.67. TTC pays more dividend than 84.80% of the companies in the same industry.
TTC's Dividend Yield is comparable with the S&P500 average which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.87% |
5.2 History
On average, the dividend of TTC grows each year by 9.97%, which is quite nice.
TTC has been paying a dividend for at least 10 years, so it has a reliable track record.
TTC has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)9.97%
Div Incr Years20
Div Non Decr Years33
5.3 Sustainability
TTC pays out 35.69% of its income as dividend. This is a sustainable payout ratio.
TTC's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP35.69%
EPS Next 2Y6.77%
EPS Next 3Y7.44%
79.99
-1.41 (-1.73%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners94.49%
Inst Owner Change1.24%
Ins Owners0.35%
Ins Owner Change1.07%
Market Cap8.05B
Analysts70.91
Price Target95.2 (19.01%)
Short Float %4.3%
Short Ratio5.21
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.87% |
Yearly Dividend1.46
Dividend Growth(5Y)9.97%
DP35.69%
Div Incr Years20
Div Non Decr Years33
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-3.05%
Min EPS beat(2)-4.45%
Max EPS beat(2)-1.66%
EPS beat(4)1
Avg EPS beat(4)-0.57%
Min EPS beat(4)-4.45%
Max EPS beat(4)7.59%
EPS beat(8)4
Avg EPS beat(8)0.77%
EPS beat(12)7
Avg EPS beat(12)1.37%
EPS beat(16)11
Avg EPS beat(16)3.64%
Revenue beat(2)0
Avg Revenue beat(2)-5.66%
Min Revenue beat(2)-9.05%
Max Revenue beat(2)-2.27%
Revenue beat(4)0
Avg Revenue beat(4)-3.28%
Min Revenue beat(4)-9.05%
Max Revenue beat(4)-0.59%
Revenue beat(8)0
Avg Revenue beat(8)-4.4%
Revenue beat(12)0
Avg Revenue beat(12)-3.85%
Revenue beat(16)3
Avg Revenue beat(16)-2.69%
PT rev (1m)-0.36%
PT rev (3m)-4.76%
EPS NQ rev (1m)-24%
EPS NQ rev (3m)-19.42%
EPS NY rev (1m)-5.86%
EPS NY rev (3m)-6.01%
Revenue NQ rev (1m)-6.88%
Revenue NQ rev (3m)-6.45%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-3.62%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.18 | ||
| Fwd PE | 18.36 | ||
| P/S | 1.76 | ||
| P/FCF | 17.29 | ||
| P/OCF | 14.12 | ||
| P/B | 5.19 | ||
| P/tB | 13.35 | ||
| EV/EBITDA | 13.47 |
EPS(TTM)4.17
EY5.21%
EPS(NY)4.36
Fwd EY5.45%
FCF(TTM)4.63
FCFY5.78%
OCF(TTM)5.66
OCFY7.08%
SpS45.55
BVpS15.42
TBVpS5.99
PEG (NY)4.3
PEG (5Y)2.79
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.69% | ||
| ROE | 26.99% | ||
| ROCE | 20.46% | ||
| ROIC | 16.78% | ||
| ROICexc | 18.17% | ||
| ROICexgc | 29.99% | ||
| OM | 11.63% | ||
| PM (TTM) | 9.14% | ||
| GM | 33.8% | ||
| FCFM | 10.16% |
ROA(3y)11.07%
ROA(5y)11.74%
ROE(3y)27.2%
ROE(5y)29.36%
ROIC(3y)17.81%
ROIC(5y)18.34%
ROICexc(3y)19.24%
ROICexc(5y)21.37%
ROICexgc(3y)34.38%
ROICexgc(5y)41.9%
ROCE(3y)21.71%
ROCE(5y)22.37%
ROICexcg growth 3Y-18.45%
ROICexcg growth 5Y-4.48%
ROICexc growth 3Y-11.36%
ROICexc growth 5Y-0.63%
OM growth 3Y-3.14%
OM growth 5Y2.35%
PM growth 3Y-4.07%
PM growth 5Y0.92%
GM growth 3Y0%
GM growth 5Y0.24%
F-Score7
Asset Turnover1.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | 1.98 | ||
| Debt/EBITDA | 1.38 | ||
| Cap/Depr | 81.36% | ||
| Cap/Sales | 2.28% | ||
| Interest Coverage | 8.47 | ||
| Cash Conversion | 86.15% | ||
| Profit Quality | 111.15% | ||
| Current Ratio | 1.81 | ||
| Quick Ratio | 0.74 | ||
| Altman-Z | 5.04 |
F-Score7
WACC10.58%
ROIC/WACC1.59
Cap/Depr(3y)115.09%
Cap/Depr(5y)111.81%
Cap/Sales(3y)2.97%
Cap/Sales(5y)2.9%
Profit Quality(3y)63.97%
Profit Quality(5y)87.06%
High Growth Momentum
Growth
EPS 1Y (TTM)-1.18%
EPS 3Y4.83%
EPS 5Y6.88%
EPS Q2Q%33.8%
EPS Next Y4.46%
EPS Next 2Y6.77%
EPS Next 3Y7.44%
EPS Next 5Y4.6%
Revenue 1Y (TTM)0.67%
Revenue growth 3Y5%
Revenue growth 5Y7.87%
Sales Q2Q%9.44%
Revenue Next Year0.26%
Revenue Next 2Y1.72%
Revenue Next 3Y2.03%
Revenue Next 5Y1.73%
EBIT growth 1Y-8.37%
EBIT growth 3Y1.7%
EBIT growth 5Y10.41%
EBIT Next Year68.94%
EBIT Next 3Y13.65%
EBIT Next 5YN/A
FCF growth 1Y196%
FCF growth 3Y3.15%
FCF growth 5Y13.75%
OCF growth 1Y85.76%
OCF growth 3Y0.86%
OCF growth 5Y11.05%