BORGWARNER INC (BWA) Stock Fundamental Analysis
NYSE:BWA - New York Stock Exchange, Inc. - US0997241064 - Common Stock - Currency: USD
BWA gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 80 industry peers in the Automobile Components industry. BWA scores quite bad on profitability, while its financial health is fine. Not spectacular, but in line with the averages. BWA has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year BWA was profitable.
BWA had a positive operating cash flow in the past year.
BWA had positive earnings in each of the past 5 years.
Each year in the past 5 years BWA had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 1.46%, BWA is doing worse than 70.00% of the companies in the same industry.
The Return On Equity of BWA (3.55%) is worse than 68.75% of its industry peers.
BWA has a better Return On Invested Capital (8.92%) than 90.00% 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 8.78%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.46% | ||
| ROE | 3.55% | ||
| ROIC | 8.92% |
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 1.50%, BWA is not doing good in the industry: 68.75% of the companies in the same industry are doing better.
BWA's Profit Margin has declined in the last couple of years.
BWA has a Operating Margin (9.34%) which is in line with its industry peers.
In the last couple of years the Operating Margin of BWA has declined.
BWA's Gross Margin of 18.65% is on the low side compared to the rest of the industry. BWA is outperformed by 77.50% of its industry peers.
In the last couple of years the Gross Margin of BWA has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.34% | ||
| PM (TTM) | 1.5% | ||
| GM | 18.65% |
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.
BWA has less shares outstanding than it did 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 2.86. 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.
Looking at the Altman-Z score, with a value of 2.86, BWA is in the better half of the industry, outperforming 65.00% of the companies in the same industry.
BWA has a debt to FCF ratio of 3.33. This is a good value and a sign of high solvency as BWA would need 3.33 years to pay back of all of its debts.
BWA has a Debt to FCF ratio of 3.33. This is amongst the best in the industry. BWA outperforms 90.00% of its industry peers.
A Debt/Equity ratio of 0.66 indicates that BWA is somewhat dependend on debt financing.
The Debt to Equity ratio of BWA (0.66) is worse than 76.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.66 | ||
| Debt/FCF | 3.33 | ||
| Altman-Z | 2.86 |
ROIC/WACC1.02
WACC8.73%
2.3 Liquidity
BWA has a Current Ratio of 2.02. This indicates that BWA is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 2.02, BWA is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
A Quick Ratio of 1.66 indicates that BWA should not have too much problems paying its short term obligations.
BWA has a better Quick ratio (1.66) than 86.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.02 | ||
| Quick Ratio | 1.66 |
3. Growth
3.1 Past
BWA shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.80%.
The Earnings Per Share has been growing slightly by 0.90% on average over the past years.
BWA shows a decrease in Revenue. In the last year, the revenue decreased by -2.10%.
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)7.8%
EPS 3Y1.35%
EPS 5Y0.9%
EPS Q2Q%1.68%
Revenue 1Y (TTM)-2.1%
Revenue growth 3Y-1.72%
Revenue growth 5Y6.74%
Sales Q2Q%0.97%
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.
BWA is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.02% yearly.
EPS Next Y0.73%
EPS Next 2Y4.97%
EPS Next 3Y5.79%
EPS Next 5Y5.67%
Revenue Next Year-0.11%
Revenue Next 2Y1.61%
Revenue Next 3Y2.18%
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
Based on the Price/Earnings ratio of 9.37, the valuation of BWA can be described as reasonable.
78.75% of the companies in the same industry are more expensive than BWA, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 26.87, BWA is valued rather cheaply.
A Price/Forward Earnings ratio of 8.70 indicates a reasonable valuation of BWA.
BWA's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. BWA is cheaper than 68.75% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of BWA to the average of the S&P500 Index (35.34), we can say BWA is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.37 | ||
| Fwd PE | 8.7 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, BWA is valued a bit cheaper than the industry average as 66.25% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, BWA is valued cheaper than 91.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.75 | ||
| EV/EBITDA | 5.46 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PEG (NY)12.89
PEG (5Y)10.37
EPS Next 2Y4.97%
EPS Next 3Y5.79%
5. Dividend
5.1 Amount
BWA has a Yearly Dividend Yield of 1.64%. Purely for dividend investing, there may be better candidates out there.
BWA's Dividend Yield is comparable with the industry average which is at 3.89.
Compared to the average S&P500 Dividend Yield of 2.36, BWA is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.64% |
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
45.71% of the earnings are spent on dividend by BWA. This is a bit on the high side, but may be sustainable.
DP45.71%
EPS Next 2Y4.97%
EPS Next 3Y5.79%
41.42
-0.03 (-0.07%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupAutomobiles & Components
GICS IndustryAutomobile Components
Earnings (Last)
Earnings (Next)
Inst Owners103.55%
Inst Owner Change-0.26%
Ins Owners1.06%
Ins Owner Change-5.3%
Market Cap9.10B
Analysts75.45
Price Target41.64 (0.53%)
Short Float %3.86%
Short Ratio3.56
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.64% |
Yearly Dividend0.44
Dividend Growth(5Y)-8.36%
DP45.71%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)11.58%
Min EPS beat(2)10.59%
Max EPS beat(2)12.56%
EPS beat(4)4
Avg EPS beat(4)11.14%
Min EPS beat(4)4.66%
Max EPS beat(4)16.74%
EPS beat(8)7
Avg EPS beat(8)9.53%
EPS beat(12)10
Avg EPS beat(12)10.93%
EPS beat(16)14
Avg EPS beat(16)13.96%
Revenue beat(2)1
Avg Revenue beat(2)1.04%
Min Revenue beat(2)-0.22%
Max Revenue beat(2)2.3%
Revenue beat(4)1
Avg Revenue beat(4)-0.47%
Min Revenue beat(4)-2.65%
Max Revenue beat(4)2.3%
Revenue beat(8)2
Avg Revenue beat(8)-1.36%
Revenue beat(12)4
Avg Revenue beat(12)-1.39%
Revenue beat(16)6
Avg Revenue beat(16)-3.17%
PT rev (1m)9.09%
PT rev (3m)16.83%
EPS NQ rev (1m)5.4%
EPS NQ rev (3m)0.58%
EPS NY rev (1m)0%
EPS NY rev (3m)2.88%
Revenue NQ rev (1m)2.14%
Revenue NQ rev (3m)2.79%
Revenue NY rev (1m)0.61%
Revenue NY rev (3m)1.9%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.37 | ||
| Fwd PE | 8.7 | ||
| P/S | 0.65 | ||
| P/FCF | 7.75 | ||
| P/OCF | 5.39 | ||
| P/B | 1.54 | ||
| P/tB | 3.01 | ||
| EV/EBITDA | 5.46 |
EPS(TTM)4.42
EY10.67%
EPS(NY)4.76
Fwd EY11.49%
FCF(TTM)5.35
FCFY12.91%
OCF(TTM)7.68
OCFY18.54%
SpS63.9
BVpS26.96
TBVpS13.77
PEG (NY)12.89
PEG (5Y)10.37
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.46% | ||
| ROE | 3.55% | ||
| ROCE | 11.88% | ||
| ROIC | 8.92% | ||
| ROICexc | 10.94% | ||
| ROICexgc | 16.13% | ||
| OM | 9.34% | ||
| PM (TTM) | 1.5% | ||
| GM | 18.65% | ||
| FCFM | 8.37% |
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-Score6
Asset Turnover0.98
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.66 | ||
| Debt/FCF | 3.33 | ||
| Debt/EBITDA | 1.94 | ||
| Cap/Depr | 73.46% | ||
| Cap/Sales | 3.65% | ||
| Interest Coverage | 11.71 | ||
| Cash Conversion | 83.97% | ||
| Profit Quality | 559.52% | ||
| Current Ratio | 2.02 | ||
| Quick Ratio | 1.66 | ||
| Altman-Z | 2.86 |
F-Score6
WACC8.73%
ROIC/WACC1.02
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)7.8%
EPS 3Y1.35%
EPS 5Y0.9%
EPS Q2Q%1.68%
EPS Next Y0.73%
EPS Next 2Y4.97%
EPS Next 3Y5.79%
EPS Next 5Y5.67%
Revenue 1Y (TTM)-2.1%
Revenue growth 3Y-1.72%
Revenue growth 5Y6.74%
Sales Q2Q%0.97%
Revenue Next Year-0.11%
Revenue Next 2Y1.61%
Revenue Next 3Y2.18%
Revenue Next 5Y3.02%
EBIT growth 1Y1.39%
EBIT growth 3Y-2.46%
EBIT growth 5Y1.39%
EBIT Next Year44.55%
EBIT Next 3Y16.7%
EBIT Next 5Y9.26%
FCF growth 1Y98.15%
FCF growth 3Y2.2%
FCF growth 5Y5.26%
OCF growth 1Y12.09%
OCF growth 3Y1.16%
OCF growth 5Y6.05%