TORO CO (TTC) Stock Fundamental Analysis
NYSE:TTC - New York Stock Exchange, Inc. - US8910921084 - Common Stock - Currency: USD
Overall TTC gets a fundamental rating of 5 out of 10. We evaluated TTC against 127 industry peers in the Machinery industry. TTC has an excellent profitability rating, but there are some minor concerns on its financial health. TTC has a valuation in line with the averages, but it does not seem to be growing. Finally TTC also has an excellent dividend rating. These ratings would make TTC suitable for dividend investing!
1. Profitability
1.1 Basic Checks
In the past year TTC was profitable.
TTC had a positive operating cash flow in the past year.
Each year in the past 5 years TTC has been profitable.
Each year in the past 5 years TTC had a positive operating cash flow.
1.2 Ratios
TTC's Return On Assets of 10.53% is amongst the best of the industry. TTC outperforms 80.31% of its industry peers.
TTC has a Return On Equity of 27.01%. This is amongst the best in the industry. TTC outperforms 92.13% of its industry peers.
Looking at the Return On Invested Capital, with a value of 15.50%, TTC belongs to the top of the industry, outperforming 87.40% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for TTC is significantly above the industry average of 10.78%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.53% | ||
| ROE | 27.01% | ||
| ROIC | 15.5% |
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
TTC has a better Profit Margin (8.77%) than 66.14% of its industry peers.
TTC's Profit Margin has been stable in the last couple of years.
TTC has a Operating Margin (11.21%) which is in line with its industry peers.
In the last couple of years the Operating Margin of TTC has grown nicely.
Looking at the Gross Margin, with a value of 33.53%, TTC is in line with its industry, outperforming 56.69% of the companies in the same industry.
TTC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.21% | ||
| PM (TTM) | 8.77% | ||
| GM | 33.53% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so TTC is still creating some value.
Compared to 1 year ago, TTC has less shares outstanding
TTC has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, TTC has an improved debt to assets ratio.
2.2 Solvency
TTC has an Altman-Z score of 4.37. This indicates that TTC is financially healthy and has little risk of bankruptcy at the moment.
TTC has a Altman-Z score of 4.37. This is in the better half of the industry: TTC outperforms 70.08% of its industry peers.
TTC has a debt to FCF ratio of 2.41. This is a good value and a sign of high solvency as TTC would need 2.41 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 2.41, TTC is doing good in the industry, outperforming 71.65% of the companies in the same industry.
TTC has a Debt/Equity ratio of 0.73. This is a neutral value indicating TTC is somewhat dependend on debt financing.
TTC has a Debt to Equity ratio of 0.73. This is in the lower half of the industry: TTC underperforms 70.08% 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 | 0.73 | ||
| Debt/FCF | 2.41 | ||
| Altman-Z | 4.37 |
ROIC/WACC1.57
WACC9.9%
2.3 Liquidity
TTC has a Current Ratio of 1.81. This is a normal value and indicates that TTC is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.81, TTC is not doing good in the industry: 60.63% of the companies in the same industry are doing better.
A Quick Ratio of 0.79 indicates that TTC may have some problems paying its short term obligations.
TTC has a worse Quick ratio (0.79) than 76.38% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.81 | ||
| Quick Ratio | 0.79 |
3. Growth
3.1 Past
TTC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13.51%, which is quite good.
TTC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.88% yearly.
TTC shows a small growth in Revenue. In the last year, the Revenue has grown by 2.94%.
The Revenue has been growing slightly by 7.87% on average over the past years.
EPS 1Y (TTM)13.51%
EPS 3Y4.83%
EPS 5Y6.88%
EPS Q2Q%1.43%
Revenue 1Y (TTM)2.94%
Revenue growth 3Y5%
Revenue growth 5Y7.87%
Sales Q2Q%-2.31%
3.2 Future
Based on estimates for the next years, TTC will show a small growth in Earnings Per Share. The EPS will grow by 4.32% on average per year.
Based on estimates for the next years, TTC will show a small growth in Revenue. The Revenue will grow by 1.08% on average per year.
EPS Next Y2.4%
EPS Next 2Y5.99%
EPS Next 3Y7.1%
EPS Next 5Y4.32%
Revenue Next Year-1.53%
Revenue Next 2Y0.78%
Revenue Next 3Y1.31%
Revenue Next 5Y1.08%
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
The Price/Earnings ratio is 17.55, 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 72.44% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.52. TTC is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 15.74, TTC is valued correctly.
69.29% of the companies in the same industry are more expensive than TTC, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 35.58, TTC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.55 | ||
| Fwd PE | 15.74 |
4.2 Price Multiples
TTC's Enterprise Value to EBITDA is on the same level as the industry average.
TTC's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. TTC is cheaper than 75.59% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16 | ||
| EV/EBITDA | 12.99 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
TTC has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)7.3
PEG (5Y)2.55
EPS Next 2Y5.99%
EPS Next 3Y7.1%
5. Dividend
5.1 Amount
TTC has a Yearly Dividend Yield of 2.00%.
Compared to an average industry Dividend Yield of 1.82, TTC pays a better dividend. On top of this TTC pays more dividend than 85.83% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.35, TTC has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2% |
5.2 History
The dividend of TTC is nicely growing with an annual growth rate of 9.97%!
TTC has paid a dividend for at least 10 years, which is a reliable track record.
TTC has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)9.97%
Div Incr Years21
Div Non Decr Years34
5.3 Sustainability
37.79% of the earnings are spent on dividend by TTC. This is a low number and sustainable payout ratio.
TTC's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP37.79%
EPS Next 2Y5.99%
EPS Next 3Y7.1%
73.72
-1.27 (-1.69%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners93.57%
Inst Owner Change0.28%
Ins Owners0.37%
Ins Owner Change0.83%
Market Cap7.28B
Analysts70
Price Target83.64 (13.46%)
Short Float %2.95%
Short Ratio3.04
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2% |
Yearly Dividend1.46
Dividend Growth(5Y)9.97%
DP37.79%
Div Incr Years21
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.36%
Min EPS beat(2)0.57%
Max EPS beat(2)2.15%
EPS beat(4)2
Avg EPS beat(4)-0.85%
Min EPS beat(4)-4.45%
Max EPS beat(4)2.15%
EPS beat(8)4
Avg EPS beat(8)0.32%
EPS beat(12)8
Avg EPS beat(12)1.22%
EPS beat(16)11
Avg EPS beat(16)2.72%
Revenue beat(2)0
Avg Revenue beat(2)-2.75%
Min Revenue beat(2)-3.52%
Max Revenue beat(2)-1.97%
Revenue beat(4)0
Avg Revenue beat(4)-4.2%
Min Revenue beat(4)-9.05%
Max Revenue beat(4)-1.97%
Revenue beat(8)0
Avg Revenue beat(8)-3.89%
Revenue beat(12)0
Avg Revenue beat(12)-3.72%
Revenue beat(16)1
Avg Revenue beat(16)-3.18%
PT rev (1m)-8.64%
PT rev (3m)-10.38%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.7%
EPS NY rev (1m)-1.75%
EPS NY rev (3m)-1.67%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.43%
Revenue NY rev (1m)-1.85%
Revenue NY rev (3m)-1.8%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.55 | ||
| Fwd PE | 15.74 | ||
| P/S | 1.6 | ||
| P/FCF | 16 | ||
| P/OCF | 13.04 | ||
| P/B | 4.93 | ||
| P/tB | 13.51 | ||
| EV/EBITDA | 12.99 |
EPS(TTM)4.2
EY5.7%
EPS(NY)4.68
Fwd EY6.35%
FCF(TTM)4.61
FCFY6.25%
OCF(TTM)5.65
OCFY7.67%
SpS46.06
BVpS14.96
TBVpS5.46
PEG (NY)7.3
PEG (5Y)2.55
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.53% | ||
| ROE | 27.01% | ||
| ROCE | 18.9% | ||
| ROIC | 15.5% | ||
| ROICexc | 16.58% | ||
| ROICexgc | 26.42% | ||
| OM | 11.21% | ||
| PM (TTM) | 8.77% | ||
| GM | 33.53% | ||
| FCFM | 10% |
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-Score6
Asset Turnover1.2
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.73 | ||
| Debt/FCF | 2.41 | ||
| Debt/EBITDA | 1.68 | ||
| Cap/Depr | 78.84% | ||
| Cap/Sales | 2.27% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 87.09% | ||
| Profit Quality | 114.02% | ||
| Current Ratio | 1.81 | ||
| Quick Ratio | 0.79 | ||
| Altman-Z | 4.37 |
F-Score6
WACC9.9%
ROIC/WACC1.57
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)13.51%
EPS 3Y4.83%
EPS 5Y6.88%
EPS Q2Q%1.43%
EPS Next Y2.4%
EPS Next 2Y5.99%
EPS Next 3Y7.1%
EPS Next 5Y4.32%
Revenue 1Y (TTM)2.94%
Revenue growth 3Y5%
Revenue growth 5Y7.87%
Sales Q2Q%-2.31%
Revenue Next Year-1.53%
Revenue Next 2Y0.78%
Revenue Next 3Y1.31%
Revenue Next 5Y1.08%
EBIT growth 1Y1.34%
EBIT growth 3Y1.7%
EBIT growth 5Y10.41%
EBIT Next Year27.91%
EBIT Next 3Y13.9%
EBIT Next 5YN/A
FCF growth 1Y246.74%
FCF growth 3Y3.15%
FCF growth 5Y13.75%
OCF growth 1Y76.58%
OCF growth 3Y0.86%
OCF growth 5Y11.05%