BORGWARNER INC (BWA) Stock Fundamental Analysis
NYSE:BWA - New York Stock Exchange, Inc. - US0997241064 - Common Stock - Currency: USD
BWA gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 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 correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year BWA was profitable.
BWA had a positive operating cash flow in the past year.
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.
With a Return On Equity value of 5.05%, BWA is not doing good in the industry: 65.43% of the companies in the same industry are doing better.
BWA's Return On Invested Capital of 9.30% is amongst the best of the industry. BWA outperforms 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 9.05%.
The 3 year average ROIC (8.99%) for BWA is below the current ROIC(9.30%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.09% | ||
| ROE | 5.05% | ||
| ROIC | 9.3% |
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
Looking at the Profit Margin, with a value of 2.06%, BWA is doing worse than 67.90% of the companies in the same industry.
BWA's Profit Margin has declined in the last couple of years.
BWA has a Operating Margin (9.42%) which is comparable to the rest of the industry.
BWA's Operating Margin has declined in the last couple of years.
BWA's Gross Margin of 18.91% is on the low side compared to the rest of the industry. BWA is outperformed by 76.54% of its industry peers.
BWA's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.42% | ||
| PM (TTM) | 2.06% | ||
| GM | 18.91% |
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
An Altman-Z score of 2.84 indicates that BWA is not a great score, but indicates only limited risk for bankruptcy at the moment.
BWA's Altman-Z score of 2.84 is fine compared to the rest of the industry. BWA outperforms 62.96% of its industry peers.
The Debt to FCF ratio of BWA is 4.01, which is a neutral value as it means it would take BWA, 4.01 years of fcf income to pay off all of its debts.
BWA has a Debt to FCF ratio (4.01) which is in line with its industry peers.
BWA has a Debt/Equity ratio of 0.67. This is a neutral value indicating BWA is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.67, BWA is doing worse than 74.07% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 4.01 | ||
| Altman-Z | 2.84 |
ROIC/WACC1.11
WACC8.41%
2.3 Liquidity
BWA has a Current Ratio of 1.97. This is a normal value and indicates that BWA is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Current ratio value of 1.97, BWA is doing good in the industry, outperforming 74.07% of the companies in the same industry.
BWA has a Quick Ratio of 1.60. This is a normal value and indicates that BWA is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of BWA (1.60) is better than 85.19% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.97 | ||
| Quick Ratio | 1.6 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 3.29% over the past year.
The Earnings Per Share has been growing slightly by 0.90% on average over the past years.
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 5.67% on average per year.
The Revenue is expected to grow by 3.02% on average over the next years.
EPS Next Y-0.31%
EPS Next 2Y4.14%
EPS Next 3Y5.75%
EPS Next 5Y5.67%
Revenue Next Year-1.56%
Revenue Next 2Y0.68%
Revenue Next 3Y2%
Revenue Next 5Y3.02%
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.
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
BWA is valuated reasonably with a Price/Earnings ratio of 8.03.
Based on the Price/Earnings ratio, BWA is valued cheaply inside the industry as 81.48% of the companies are valued more expensively.
BWA's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.45.
Based on the Price/Forward Earnings ratio of 7.54, the valuation of BWA can be described as very cheap.
Based on the Price/Forward Earnings ratio, BWA is valued a bit cheaper than the industry average as 72.84% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.90, BWA is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.03 | ||
| Fwd PE | 7.54 |
4.2 Price Multiples
BWA's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. BWA is cheaper than 65.43% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, BWA is valued a bit cheaper than 70.37% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.07 | ||
| EV/EBITDA | 4.94 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)8.88
EPS Next 2Y4.14%
EPS Next 3Y5.75%
5. Dividend
5.1 Amount
BWA has a Yearly Dividend Yield of 1.31%. Purely for dividend investing, there may be better candidates out there.
BWA's Dividend Yield is slightly below the industry average, which is at 4.42.
With a Dividend Yield of 1.31, BWA pays less dividend than the S&P500 average, which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.31% |
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
33.56% of the earnings are spent on dividend by BWA. This is a low number and sustainable payout ratio.
DP33.56%
EPS Next 2Y4.14%
EPS Next 3Y5.75%
35.32
-0.22 (-0.62%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupAutomobiles & Components
GICS IndustryAutomobile Components
Earnings (Last)
Earnings (Next)
Inst Owners104.28%
Inst Owner Change1.31%
Ins Owners1.06%
Ins Owner Change15.35%
Market Cap7.76B
Analysts75.45
Price Target38.17 (8.07%)
Short Float %3.92%
Short Ratio3.39
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.31% |
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)7.1%
PT rev (3m)0.22%
EPS NQ rev (1m)0.07%
EPS NQ rev (3m)-5.63%
EPS NY rev (1m)-0.98%
EPS NY rev (3m)-1.09%
Revenue NQ rev (1m)-0.03%
Revenue NQ rev (3m)0.81%
Revenue NY rev (1m)-0.16%
Revenue NY rev (3m)0.62%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.03 | ||
| Fwd PE | 7.54 | ||
| P/S | 0.55 | ||
| P/FCF | 8.07 | ||
| P/OCF | 4.97 | ||
| P/B | 1.36 | ||
| P/tB | 2.68 | ||
| EV/EBITDA | 4.94 |
EPS(TTM)4.4
EY12.46%
EPS(NY)4.69
Fwd EY13.27%
FCF(TTM)4.38
FCFY12.4%
OCF(TTM)7.11
OCFY20.13%
SpS63.74
BVpS26.03
TBVpS13.19
PEG (NY)N/A
PEG (5Y)8.88
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.09% | ||
| ROE | 5.05% | ||
| ROCE | 12.44% | ||
| ROIC | 9.3% | ||
| ROICexc | 11.07% | ||
| ROICexgc | 16.17% | ||
| OM | 9.42% | ||
| PM (TTM) | 2.06% | ||
| GM | 18.91% | ||
| 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 | 1.93 | ||
| Cap/Depr | 88.5% | ||
| Cap/Sales | 4.28% | ||
| Interest Coverage | 9.49 | ||
| Cash Conversion | 78.22% | ||
| Profit Quality | 332.87% | ||
| Current Ratio | 1.97 | ||
| Quick Ratio | 1.6 | ||
| Altman-Z | 2.84 |
F-Score7
WACC8.41%
ROIC/WACC1.11
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 Y-0.31%
EPS Next 2Y4.14%
EPS Next 3Y5.75%
EPS Next 5Y5.67%
Revenue 1Y (TTM)2.89%
Revenue growth 3Y-1.72%
Revenue growth 5Y6.74%
Sales Q2Q%-2.23%
Revenue Next Year-1.56%
Revenue Next 2Y0.68%
Revenue Next 3Y2%
Revenue Next 5Y3.02%
EBIT growth 1Y9.01%
EBIT growth 3Y-2.46%
EBIT growth 5Y1.39%
EBIT Next Year41.91%
EBIT Next 3Y15.58%
EBIT Next 5Y9.26%
FCF growth 1Y55.92%
FCF growth 3Y2.2%
FCF growth 5Y5.26%
OCF growth 1Y8.4%
OCF growth 3Y1.16%
OCF growth 5Y6.05%