NYSE:TXT appears to be flying under the radar despite its strong fundamentals.

Our stock screener has singled out TEXTRON INC (NYSE:TXT) as a stellar value proposition. NYSE:TXT not only scores well in profitability, solvency, and liquidity but also maintains a very reasonable price point. We'll explore this further.

Evaluating Valuation: NYSE:TXT

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NYSE:TXT was assigned a score of 8 for valuation:

• Based on the Price/Earnings ratio, TXT is valued cheaply inside the industry as 93.65% of the companies are valued more expensively.
• When comparing the Price/Earnings ratio of TXT to the average of the S&P500 Index (24.73), we can say TXT is valued slightly cheaper.
• TXT's Price/Forward Earnings ratio is rather cheap when compared to the industry. TXT is cheaper than 96.83% of the companies in the same industry.
• Compared to an average S&P500 Price/Forward Earnings ratio of 19.36, TXT is valued a bit cheaper.
• Based on the Enterprise Value to EBITDA ratio, TXT is valued cheaper than 84.13% of the companies in the same industry.
• Based on the Price/Free Cash Flow ratio, TXT is valued cheaper than 93.65% of the companies in the same industry.
• The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• TXT has a very decent profitability rating, which may justify a higher PE ratio.
• TXT's earnings are expected to grow with 17.82% in the coming years. This may justify a more expensive valuation.

How do we evaluate the Profitability for NYSE:TXT?

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:TXT was assigned a score of 6 for profitability:

• The Return On Assets of TXT (5.75%) is better than 74.60% of its industry peers.
• TXT has a Return On Equity of 13.43%. This is in the better half of the industry: TXT outperforms 79.37% of its industry peers.
• The Return On Invested Capital of TXT (6.66%) is better than 73.02% of its industry peers.
• The last Return On Invested Capital (6.66%) for TXT is above the 3 year average (5.11%), which is a sign of increasing profitability.
• Looking at the Profit Margin, with a value of 7.07%, TXT is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
• In the last couple of years the Profit Margin of TXT has grown nicely.
• Looking at the Operating Margin, with a value of 7.05%, TXT is in the better half of the industry, outperforming 60.32% of the companies in the same industry.

Evaluating Health: NYSE:TXT

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:TXT has achieved a 5 out of 10:

• The Altman-Z score of TXT (2.77) is better than 60.32% of its industry peers.
• TXT has a better Debt to FCF ratio (4.12) than 84.13% of its industry peers.
• A Debt/Equity ratio of 0.45 indicates that TXT is not too dependend on debt financing.

Growth Analysis for NYSE:TXT

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NYSE:TXT has achieved a 5 out of 10:

• TXT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 30.67%, which is quite impressive.
• TXT shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.36% yearly.
• Based on estimates for the next years, TXT will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.70% on average per year.
• When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
• When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

More Decent Value stocks can be found in our Decent Value screener.

Check the latest full fundamental report of TXT for a complete fundamental analysis.

Keep in mind

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.