BORGWARNER INC (BWA) Stock Fundamental Analysis
NYSE:BWA - New York Stock Exchange, Inc. - US0997241064 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to BWA. BWA was compared to 81 industry peers in the Automobile Components industry. BWA has an average financial health and profitability rating. BWA has a correct valuation and a medium growth rate.
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
Looking at the Return On Assets, with a value of 2.09%, BWA is doing worse than 66.67% of the companies in the same industry.
Looking at the Return On Equity, with a value of 5.05%, BWA is doing worse than 65.43% of the companies in the same industry.
BWA has a Return On Invested Capital of 9.26%. This is amongst the best in the industry. BWA outperforms 88.89% of its industry peers.
The Average Return On Invested Capital over the past 3 years for BWA is in line with the industry average of 9.04%.
The last Return On Invested Capital (9.26%) for BWA is above the 3 year average (8.99%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.09% | ||
| ROE | 5.05% | ||
| ROIC | 9.26% |
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
BWA has a Profit Margin of 2.06%. This is in the lower half of the industry: BWA underperforms 67.90% of its industry peers.
In the last couple of years the Profit Margin of BWA has declined.
BWA has a Operating Margin (9.37%) which is in line with its industry peers.
BWA's Operating Margin has declined in the last couple of years.
With a Gross Margin value of 18.87%, BWA is not doing good in the industry: 76.54% of the companies in the same industry are doing better.
BWA's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.37% | ||
| PM (TTM) | 2.06% | ||
| GM | 18.87% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), BWA is creating some value.
The number of shares outstanding for BWA has been reduced compared to 1 year ago.
Compared to 5 years ago, BWA has more shares outstanding
BWA has a worse debt/assets ratio than last year.
2.2 Solvency
BWA has an Altman-Z score of 2.80. 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.
BWA's Altman-Z score of 2.80 is fine compared to the rest of the industry. BWA outperforms 64.20% of its industry peers.
BWA has a debt to FCF ratio of 4.01. This is a neutral value as BWA would need 4.01 years to pay back of all of its debts.
The Debt to FCF ratio of BWA (4.01) is comparable to the rest of the industry.
BWA has a Debt/Equity ratio of 0.67. This is a neutral value indicating BWA is somewhat dependend on debt financing.
BWA has a Debt to Equity ratio of 0.67. This is in the lower half of the industry: BWA underperforms 77.78% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 4.01 | ||
| Altman-Z | 2.8 |
ROIC/WACC1.13
WACC8.21%
2.3 Liquidity
A Current Ratio of 1.97 indicates that BWA should not have too much problems paying its short term obligations.
BWA has a Current ratio of 1.97. This is in the better half of the industry: BWA outperforms 74.07% of its industry peers.
A Quick Ratio of 1.60 indicates that BWA should not have too much problems paying its short term obligations.
BWA's Quick ratio of 1.60 is amongst the best of the industry. BWA outperforms 85.19% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.97 | ||
| Quick Ratio | 1.6 |
3. Growth
3.1 Past
BWA shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.29%.
BWA shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 0.90% yearly.
The Revenue has been growing slightly by 2.89% in the past year.
Measured over the past years, BWA shows a small growth in Revenue. The Revenue has been growing by 6.74% on average per year.
EPS 1Y (TTM)3.29%
EPS 3Y1.35%
EPS 5Y0.9%
EPS Q2Q%7.77%
Revenue 1Y (TTM)2.89%
Revenue growth 3Y-1.72%
Revenue growth 5Y6.74%
Sales Q2Q%-2.23%
3.2 Future
Based on estimates for the next years, BWA will show a small growth in Earnings Per Share. The EPS will grow by 4.69% on average per year.
BWA is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.72% yearly.
EPS Next Y0.67%
EPS Next 2Y4.89%
EPS Next 3Y6.44%
EPS Next 5Y4.69%
Revenue Next Year-1.41%
Revenue Next 2Y0.71%
Revenue Next 3Y2%
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.
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
Based on the Price/Earnings ratio of 7.43, the valuation of BWA can be described as very cheap.
Based on the Price/Earnings ratio, BWA is valued cheaper than 80.25% 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 25.82.
With a Price/Forward Earnings ratio of 6.88, the valuation of BWA can be described as very cheap.
BWA's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. BWA is cheaper than 72.84% of the companies in the same industry.
BWA's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.76.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.43 | ||
| Fwd PE | 6.88 |
4.2 Price Multiples
64.20% of the companies in the same industry are more expensive than BWA, based on the Enterprise Value to EBITDA ratio.
74.07% of the companies in the same industry are more expensive than BWA, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.46 | ||
| EV/EBITDA | 4.69 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates BWA does not grow enough to justify the current Price/Earnings ratio.
PEG (NY)11.08
PEG (5Y)8.22
EPS Next 2Y4.89%
EPS Next 3Y6.44%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.35%, BWA has a reasonable but not impressive dividend return.
BWA's Dividend Yield is slightly below the industry average, which is at 4.08.
Compared to an average S&P500 Dividend Yield of 2.36, BWA's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.35% |
5.2 History
The dividend of BWA decreases each year by -8.36%.
BWA has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)-8.36%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
BWA pays out 33.56% of its income as dividend. This is a sustainable payout ratio.
DP33.56%
EPS Next 2Y4.89%
EPS Next 3Y6.44%
32.68
-0.28 (-0.85%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupAutomobiles & Components
GICS IndustryAutomobile Components
Earnings (Last)
Earnings (Next)
Inst Owners104.47%
Inst Owner Change1.54%
Ins Owners0.98%
Ins Owner Change14.89%
Market Cap7.18B
Analysts75.45
Price Target35.64 (9.06%)
Short Float %4.31%
Short Ratio2.48
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.35% |
Yearly Dividend0.44
Dividend Growth(5Y)-8.36%
DP33.56%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.61%
Min EPS beat(2)4.66%
Max EPS beat(2)12.56%
EPS beat(4)4
Avg EPS beat(4)12.62%
Min EPS beat(4)4.66%
Max EPS beat(4)16.74%
EPS beat(8)7
Avg EPS beat(8)11.16%
EPS beat(12)10
Avg EPS beat(12)11.87%
EPS beat(16)14
Avg EPS beat(16)15.26%
Revenue beat(2)1
Avg Revenue beat(2)0.5%
Min Revenue beat(2)-1.29%
Max Revenue beat(2)2.3%
Revenue beat(4)1
Avg Revenue beat(4)-1.35%
Min Revenue beat(4)-3.74%
Max Revenue beat(4)2.3%
Revenue beat(8)3
Avg Revenue beat(8)-0.09%
Revenue beat(12)4
Avg Revenue beat(12)-4.75%
Revenue beat(16)7
Avg Revenue beat(16)-2.73%
PT rev (1m)-5.24%
PT rev (3m)-10.42%
EPS NQ rev (1m)-3.21%
EPS NQ rev (3m)-4.65%
EPS NY rev (1m)2.82%
EPS NY rev (3m)-2.06%
Revenue NQ rev (1m)0.7%
Revenue NQ rev (3m)1.3%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)-3.48%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.43 | ||
| Fwd PE | 6.88 | ||
| P/S | 0.51 | ||
| P/FCF | 7.46 | ||
| P/OCF | 4.6 | ||
| P/B | 1.26 | ||
| P/tB | 2.48 | ||
| EV/EBITDA | 4.69 |
EPS(TTM)4.4
EY13.46%
EPS(NY)4.75
Fwd EY14.54%
FCF(TTM)4.38
FCFY13.4%
OCF(TTM)7.11
OCFY21.76%
SpS63.75
BVpS26.04
TBVpS13.19
PEG (NY)11.08
PEG (5Y)8.22
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.09% | ||
| ROE | 5.05% | ||
| ROCE | 12.39% | ||
| ROIC | 9.26% | ||
| ROICexc | 11.02% | ||
| ROICexgc | 16.1% | ||
| OM | 9.37% | ||
| PM (TTM) | 2.06% | ||
| GM | 18.87% | ||
| FCFM | 6.87% |
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 | 0.67 | ||
| Debt/FCF | 4.01 | ||
| Debt/EBITDA | 1.94 | ||
| Cap/Depr | 88.5% | ||
| Cap/Sales | 4.28% | ||
| Interest Coverage | 9.45 | ||
| Cash Conversion | 78.45% | ||
| Profit Quality | 332.87% | ||
| Current Ratio | 1.97 | ||
| Quick Ratio | 1.6 | ||
| Altman-Z | 2.8 |
F-Score7
WACC8.21%
ROIC/WACC1.13
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)3.29%
EPS 3Y1.35%
EPS 5Y0.9%
EPS Q2Q%7.77%
EPS Next Y0.67%
EPS Next 2Y4.89%
EPS Next 3Y6.44%
EPS Next 5Y4.69%
Revenue 1Y (TTM)2.89%
Revenue growth 3Y-1.72%
Revenue growth 5Y6.74%
Sales Q2Q%-2.23%
Revenue Next Year-1.41%
Revenue Next 2Y0.71%
Revenue Next 3Y2%
Revenue Next 5Y2.72%
EBIT growth 1Y8.51%
EBIT growth 3Y-2.46%
EBIT growth 5Y1.39%
EBIT Next Year44.9%
EBIT Next 3Y15.63%
EBIT Next 5Y9.15%
FCF growth 1Y55.92%
FCF growth 3Y2.2%
FCF growth 5Y5.26%
OCF growth 1Y8.4%
OCF growth 3Y1.16%
OCF growth 5Y6.05%