BORGWARNER INC (BWA) Stock Fundamental Analysis
NYSE:BWA - New York Stock Exchange, Inc. - US0997241064 - Common Stock - Currency: USD
Taking everything into account, BWA scores 4 out of 10 in our fundamental rating. BWA was compared to 81 industry peers in the Automobile Components industry. Both the profitability and the financial health of BWA get a neutral evaluation. Nothing too spectacular is happening here. BWA has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year BWA was profitable.
In the past year BWA had a positive cash flow from operations.
In the past 5 years BWA has always been profitable.
In the past 5 years BWA always reported a positive cash flow from operatings.
1.2 Ratios
With a Return On Assets value of 2.42%, BWA is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
BWA has a Return On Equity of 6.11%. This is in the lower half of the industry: BWA underperforms 65.43% of its industry peers.
The Return On Invested Capital of BWA (9.40%) is better than 88.89% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for BWA is in line with the industry average of 8.98%.
The last Return On Invested Capital (9.40%) for BWA is above the 3 year average (8.99%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.42% | ||
| ROE | 6.11% | ||
| ROIC | 9.4% |
ROA(3y)4.1%
ROA(5y)3.73%
ROE(3y)9.97%
ROE(5y)9.08%
ROIC(3y)8.99%
ROIC(5y)8.17%
1.3 Margins
With a Profit Margin value of 2.40%, BWA is not doing good in the industry: 64.20% of the companies in the same industry are doing better.
BWA's Profit Margin has declined in the last couple of years.
The Operating Margin of BWA (9.25%) is worse than 60.49% of its industry peers.
In the last couple of years the Operating Margin of BWA has declined.
BWA has a Gross Margin of 18.80%. This is in the lower half of the industry: BWA underperforms 76.54% of its industry peers.
In the last couple of years the Gross Margin of BWA has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.25% | ||
| PM (TTM) | 2.4% | ||
| GM | 18.8% |
OM growth 3Y-0.75%
OM growth 5Y-5.01%
PM growth 3Y-12.8%
PM growth 5Y-20.03%
GM growth 3Y-0.77%
GM growth 5Y-1.87%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so BWA is still creating some value.
The number of shares outstanding for BWA has been reduced compared to 1 year ago.
BWA has more shares outstanding than it did 5 years ago.
BWA has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.65 indicates that BWA is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of BWA (2.65) is better than 60.49% of its industry peers.
BWA has a debt to FCF ratio of 6.11. This is a slightly negative value and a sign of low solvency as BWA would need 6.11 years to pay back of all of its debts.
The Debt to FCF ratio of BWA (6.11) is worse than 66.67% of its industry peers.
BWA has a Debt/Equity ratio of 0.69. This is a neutral value indicating BWA is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.69, BWA is not doing good in the industry: 80.25% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.69 | ||
| Debt/FCF | 6.11 | ||
| Altman-Z | 2.65 |
ROIC/WACC1.19
WACC7.88%
2.3 Liquidity
BWA has a Current Ratio of 1.79. This is a normal value and indicates that BWA is financially healthy and should not expect problems in meeting its short term obligations.
BWA has a Current ratio of 1.79. This is in the better half of the industry: BWA outperforms 69.14% of its industry peers.
A Quick Ratio of 1.45 indicates that BWA should not have too much problems paying its short term obligations.
BWA's Quick ratio of 1.45 is amongst the best of the industry. BWA outperforms 80.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.79 | ||
| Quick Ratio | 1.45 |
3. Growth
3.1 Past
BWA shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by 0.00%.
BWA shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 0.90% yearly.
BWA shows a decrease in Revenue. In the last year, the revenue decreased by -0.79%.
BWA shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.74% yearly.
EPS 1Y (TTM)0%
EPS 3Y1.35%
EPS 5Y0.9%
EPS Q2Q%12.22%
Revenue 1Y (TTM)-0.79%
Revenue growth 3Y-1.72%
Revenue growth 5Y6.74%
Sales Q2Q%-2.36%
3.2 Future
The Earnings Per Share is expected to grow by 4.69% on average over the next years.
Based on estimates for the next years, BWA will show a small growth in Revenue. The Revenue will grow by 2.72% on average per year.
EPS Next Y-2.09%
EPS Next 2Y3.91%
EPS Next 3Y4.61%
EPS Next 5Y4.69%
Revenue Next Year-2.29%
Revenue Next 2Y0.57%
Revenue Next 3Y1.83%
Revenue Next 5Y2.72%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 6.78, the valuation of BWA can be described as very cheap.
85.19% of the companies in the same industry are more expensive than BWA, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of BWA to the average of the S&P500 Index (28.22), we can say BWA is valued rather cheaply.
A Price/Forward Earnings ratio of 6.92 indicates a rather cheap valuation of BWA.
75.31% of the companies in the same industry are more expensive than BWA, based on the Price/Forward Earnings ratio.
BWA's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 20.86.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.78 | ||
| Fwd PE | 6.92 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of BWA indicates a somewhat cheap valuation: BWA is cheaper than 65.43% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, BWA is valued a bit cheaper than the industry average as 60.49% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.45 | ||
| EV/EBITDA | 4.19 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)7.5
EPS Next 2Y3.91%
EPS Next 3Y4.61%
5. Dividend
5.1 Amount
BWA has a Yearly Dividend Yield of 1.55%.
BWA's Dividend Yield is slightly below the industry average, which is at 4.40.
Compared to the average S&P500 Dividend Yield of 2.44, BWA is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.55% |
5.2 History
The dividend of BWA decreases each year by -8.36%.
BWA has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-8.36%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
28.99% of the earnings are spent on dividend by BWA. This is a low number and sustainable payout ratio.
DP28.99%
EPS Next 2Y3.91%
EPS Next 3Y4.61%
29.28
+0.74 (+2.59%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupAutomobiles & Components
GICS IndustryAutomobile Components
Earnings (Last)
Earnings (Next)
Inst Owners104.47%
Inst Owner Change-0.31%
Ins Owners0.98%
Ins Owner Change8.89%
Market Cap6.43B
Analysts75.45
Price Target35.71 (21.96%)
Short Float %4.38%
Short Ratio2.55
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.55% |
Yearly Dividend0.44
Dividend Growth(5Y)-8.36%
DP28.99%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.7%
Min EPS beat(2)4.66%
Max EPS beat(2)16.74%
EPS beat(4)4
Avg EPS beat(4)13.75%
Min EPS beat(4)4.66%
Max EPS beat(4)17.1%
EPS beat(8)6
Avg EPS beat(8)9.23%
EPS beat(12)10
Avg EPS beat(12)12.46%
EPS beat(16)14
Avg EPS beat(16)16.34%
Revenue beat(2)0
Avg Revenue beat(2)-1.97%
Min Revenue beat(2)-2.65%
Max Revenue beat(2)-1.29%
Revenue beat(4)1
Avg Revenue beat(4)-1.56%
Min Revenue beat(4)-3.74%
Max Revenue beat(4)1.44%
Revenue beat(8)2
Avg Revenue beat(8)-0.42%
Revenue beat(12)4
Avg Revenue beat(12)-4.66%
Revenue beat(16)7
Avg Revenue beat(16)-2.17%
PT rev (1m)-8.21%
PT rev (3m)-15.02%
EPS NQ rev (1m)-0.24%
EPS NQ rev (3m)-10.34%
EPS NY rev (1m)-2.85%
EPS NY rev (3m)-9.44%
Revenue NQ rev (1m)0.15%
Revenue NQ rev (3m)-7.86%
Revenue NY rev (1m)-0.12%
Revenue NY rev (3m)-5.84%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.78 | ||
| Fwd PE | 6.92 | ||
| P/S | 0.46 | ||
| P/FCF | 9.45 | ||
| P/OCF | 4.76 | ||
| P/B | 1.16 | ||
| P/tB | 2.38 | ||
| EV/EBITDA | 4.19 |
EPS(TTM)4.32
EY14.75%
EPS(NY)4.23
Fwd EY14.45%
FCF(TTM)3.1
FCFY10.59%
OCF(TTM)6.15
OCFY21.02%
SpS64.12
BVpS25.18
TBVpS12.29
PEG (NY)N/A
PEG (5Y)7.5
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.42% | ||
| ROE | 6.11% | ||
| ROCE | 12.59% | ||
| ROIC | 9.4% | ||
| ROICexc | 11.77% | ||
| ROICexgc | 17.85% | ||
| OM | 9.25% | ||
| PM (TTM) | 2.4% | ||
| GM | 18.8% | ||
| FCFM | 4.83% |
ROA(3y)4.1%
ROA(5y)3.73%
ROE(3y)9.97%
ROE(5y)9.08%
ROIC(3y)8.99%
ROIC(5y)8.17%
ROICexc(3y)11.03%
ROICexc(5y)10.47%
ROICexgc(3y)18.11%
ROICexgc(5y)17.92%
ROCE(3y)12.03%
ROCE(5y)10.93%
ROICexcg growth 3Y-6.79%
ROICexcg growth 5Y-7.32%
ROICexc growth 3Y0.73%
ROICexc growth 5Y-5.84%
OM growth 3Y-0.75%
OM growth 5Y-5.01%
PM growth 3Y-12.8%
PM growth 5Y-20.03%
GM growth 3Y-0.77%
GM growth 5Y-1.87%
F-Score7
Asset Turnover1.01
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.69 | ||
| Debt/FCF | 6.11 | ||
| Debt/EBITDA | 1.94 | ||
| Cap/Depr | 99.7% | ||
| Cap/Sales | 4.76% | ||
| Interest Coverage | 10.77 | ||
| Cash Conversion | 68.42% | ||
| Profit Quality | 201.48% | ||
| Current Ratio | 1.79 | ||
| Quick Ratio | 1.45 | ||
| Altman-Z | 2.65 |
F-Score7
WACC7.88%
ROIC/WACC1.19
Cap/Depr(3y)114.31%
Cap/Depr(5y)102.13%
Cap/Sales(3y)5.07%
Cap/Sales(5y)4.85%
Profit Quality(3y)122.63%
Profit Quality(5y)126.26%
High Growth Momentum
Growth
EPS 1Y (TTM)0%
EPS 3Y1.35%
EPS 5Y0.9%
EPS Q2Q%12.22%
EPS Next Y-2.09%
EPS Next 2Y3.91%
EPS Next 3Y4.61%
EPS Next 5Y4.69%
Revenue 1Y (TTM)-0.79%
Revenue growth 3Y-1.72%
Revenue growth 5Y6.74%
Sales Q2Q%-2.36%
Revenue Next Year-2.29%
Revenue Next 2Y0.57%
Revenue Next 3Y1.83%
Revenue Next 5Y2.72%
EBIT growth 1Y3.17%
EBIT growth 3Y-2.46%
EBIT growth 5Y1.39%
EBIT Next Year44.9%
EBIT Next 3Y15.63%
EBIT Next 5Y9.15%
FCF growth 1Y41.88%
FCF growth 3Y2.2%
FCF growth 5Y5.26%
OCF growth 1Y3.05%
OCF growth 3Y1.16%
OCF growth 5Y6.05%