BORGWARNER INC (BWA)
US0997241064 - Common Stock
We assign a fundamental rating of 5 out of 10 to BWA. BWA was compared to 42 industry peers in the Automobile Components industry. While BWA is still in line with the averages on profitability rating, there are concerns on its financial health. BWA is cheap, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
BWA had positive earnings in the past year.
In the past year BWA had a positive cash flow from operations.
Each year in the past 5 years BWA has been profitable.
BWA had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
BWA's Return On Assets of 4.32% is fine compared to the rest of the industry. BWA outperforms 71.43% of its industry peers.
With a decent Return On Equity value of 10.72%, BWA is doing good in the industry, outperforming 71.43% of the companies in the same industry.
The Return On Invested Capital of BWA (8.73%) is better than 76.19% of its industry peers.
BWA had an Average Return On Invested Capital over the past 3 years of 8.50%. This is in line with the industry average of 9.29%.
The 3 year average ROIC (8.50%) for BWA is below the current ROIC(8.73%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.32% | ||
| ROE | 10.72% | ||
| ROIC | 8.73% |
ROA(3y)4.37%
ROA(5y)4.79%
ROE(3y)10.51%
ROE(5y)11.03%
ROIC(3y)8.5%
ROIC(5y)8.66%
1.3 Margins
With a decent Profit Margin value of 4.40%, BWA is doing good in the industry, outperforming 73.81% of the companies in the same industry.
BWA's Profit Margin has declined in the last couple of years.
The Operating Margin of BWA (8.90%) is better than 76.19% of its industry peers.
BWA's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 18.09%, BWA is in line with its industry, outperforming 50.00% of the companies in the same industry.
BWA's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.9% | ||
| PM (TTM) | 4.4% | ||
| GM | 18.09% |
OM growth 3Y-0.75%
OM growth 5Y-6.17%
PM growth 3Y-3.63%
PM growth 5Y-13.02%
GM growth 3Y-1.26%
GM growth 5Y-3.1%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), BWA is destroying 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.
Compared to 1 year ago, BWA has a worse debt to assets ratio.
2.2 Solvency
BWA has an Altman-Z score of 2.61. This is not the best score and indicates that BWA is in the grey zone with still only limited risk for bankruptcy at the moment.
With a decent Altman-Z score value of 2.61, BWA is doing good in the industry, outperforming 61.90% of the companies in the same industry.
The Debt to FCF ratio of BWA is 7.88, which is on the high side as it means it would take BWA, 7.88 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 7.88, BWA perfoms like the industry average, outperforming 52.38% of the companies in the same industry.
A Debt/Equity ratio of 0.65 indicates that BWA is somewhat dependend on debt financing.
The Debt to Equity ratio of BWA (0.65) is worse than 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.65 | ||
| Debt/FCF | 7.88 | ||
| Altman-Z | 2.61 |
ROIC/WACC0.86
WACC10.11%
2.3 Liquidity
BWA has a Current Ratio of 1.65. This is a normal value and indicates that BWA is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.65, BWA is doing worse than 64.29% of the companies in the same industry.
BWA has a Quick Ratio of 1.30. This is a normal value and indicates that BWA is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.30, BWA is in the better half of the industry, outperforming 64.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.65 | ||
| Quick Ratio | 1.3 |
3. Growth
3.1 Past
BWA shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -6.09%.
BWA shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -0.77% yearly.
Looking at the last year, BWA shows a small growth in Revenue. The Revenue has grown by 5.75% in the last year.
BWA shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.16% yearly.
EPS 1Y (TTM)-6.09%
EPS 3Y17.11%
EPS 5Y-0.77%
EPS growth Q2Q-28.57%
Revenue 1Y (TTM)5.75%
Revenue growth 3Y11.78%
Revenue growth 5Y6.16%
Revenue growth Q2Q-14.26%
3.2 Future
The Earnings Per Share is expected to grow by 7.11% 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 7.03% on average per year.
EPS Next Y-8.52%
EPS Next 2Y1.19%
EPS Next 3Y4.22%
EPS Next 5Y7.11%
Revenue Next Year1.33%
Revenue Next 2Y4.04%
Revenue Next 3Y4.8%
Revenue Next 5Y7.03%
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 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 stable.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 7.60, which indicates a rather cheap valuation of BWA.
Based on the Price/Earnings ratio, BWA is valued cheaper than 95.24% of the companies in the same industry.
BWA's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.20.
BWA is valuated reasonably with a Price/Forward Earnings ratio of 8.31.
Based on the Price/Forward Earnings ratio, BWA is valued cheaply inside the industry as 88.10% of the companies are valued more expensively.
BWA is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.63, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.6 | ||
| Fwd PE | 8.31 |
4.2 Price Multiples
76.19% of the companies in the same industry are more expensive than BWA, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, BWA is valued a bit cheaper than 69.05% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.79 | ||
| EV/EBITDA | 5.39 |
4.3 Compensation for Growth
BWA has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y1.19%
EPS Next 3Y4.22%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.37%, BWA has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.80, BWA pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.44, BWA's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.37% |
5.2 History
The dividend of BWA decreases each year by -3.66%.
BWA has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-3.66%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
BWA pays out 20.80% of its income as dividend. This is a sustainable payout ratio.
DP20.8%
EPS Next 2Y1.19%
EPS Next 3Y4.22%
BORGWARNER INC
NYSE:BWA (4/25/2024, 7:04:01 PM)
After market: 32.82 0 (0%)32.82
-0.83 (-2.47%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupAutomobiles & Components
GICS IndustryAutomobile Components
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap7.58B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.37% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.6 | ||
| Fwd PE | 8.31 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.32% | ||
| ROE | 10.72% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 8.9% | ||
| PM (TTM) | 4.4% | ||
| GM | 18.09% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.98
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.65 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.65 | ||
| Quick Ratio | 1.3 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-6.09%
EPS 3Y17.11%
EPS 5Y
EPS growth Q2Q
EPS Next Y-8.52%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)5.75%
Revenue growth 3Y11.78%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y