EATON CORP PLC (ETN) Stock Fundamental Analysis
USA - NYSE:ETN - IE00B8KQN827 - Common Stock
373.46 USD
-3.3 (-0.88%)
375.2 USD
+1.74 (+0.47%)
Taking everything into account, ETN scores 6 out of 10 in our fundamental rating. ETN was compared to 93 industry peers in the Electrical Equipment industry. ETN scores excellent on profitability, but there are some minor concerns on its financial health. ETN has a decent growth rate and is not valued too expensively. ETN also has an excellent dividend rating. These ratings could make ETN a good candidate for dividend investing.
1. Profitability
1.1 Basic Checks
In the past year ETN was profitable.
ETN had a positive operating cash flow in the past year.
ETN had positive earnings in each of the past 5 years.
In the past 5 years ETN always reported a positive cash flow from operatings.
1.2 Ratios
ETN's Return On Assets of 9.69% is amongst the best of the industry. ETN outperforms 93.55% of its industry peers.
ETN has a Return On Equity of 21.10%. This is amongst the best in the industry. ETN outperforms 92.47% of its industry peers.
ETN's Return On Invested Capital of 12.83% is amongst the best of the industry. ETN outperforms 90.32% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ETN is in line with the industry average of 10.14%.
The last Return On Invested Capital (12.83%) for ETN is above the 3 year average (10.83%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.69% | ||
| ROE | 21.1% | ||
| ROIC | 12.83% |
ROA(3y)8.43%
ROA(5y)7.2%
ROE(3y)17.29%
ROE(5y)14.88%
ROIC(3y)10.83%
ROIC(5y)9.09%
1.3 Margins
Looking at the Profit Margin, with a value of 15.11%, ETN belongs to the top of the industry, outperforming 91.40% of the companies in the same industry.
ETN's Profit Margin has improved in the last couple of years.
ETN has a better Operating Margin (18.89%) than 94.62% of its industry peers.
ETN's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 38.16%, ETN belongs to the top of the industry, outperforming 84.95% of the companies in the same industry.
In the last couple of years the Gross Margin of ETN has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.89% | ||
| PM (TTM) | 15.11% | ||
| GM | 38.16% |
OM growth 3Y15.21%
OM growth 5Y7.39%
PM growth 3Y11.77%
PM growth 5Y8.09%
GM growth 3Y5.78%
GM growth 5Y2.99%
2. Health
2.1 Basic Checks
ETN has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, ETN has less shares outstanding
Compared to 5 years ago, ETN has less shares outstanding
Compared to 1 year ago, ETN has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 5.44 indicates that ETN is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.44, ETN belongs to the top of the industry, outperforming 80.65% of the companies in the same industry.
The Debt to FCF ratio of ETN is 3.36, which is a good value as it means it would take ETN, 3.36 years of fcf income to pay off all of its debts.
ETN has a better Debt to FCF ratio (3.36) than 79.57% of its industry peers.
ETN has a Debt/Equity ratio of 0.53. This is a neutral value indicating ETN is somewhat dependend on debt financing.
ETN has a Debt to Equity ratio of 0.53. This is comparable to the rest of the industry: ETN outperforms 44.09% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 3.36 | ||
| Altman-Z | 5.44 |
ROIC/WACC1.73
WACC7.41%
2.3 Liquidity
A Current Ratio of 1.24 indicates that ETN should not have too much problems paying its short term obligations.
ETN has a worse Current ratio (1.24) than 64.52% of its industry peers.
ETN has a Quick Ratio of 1.24. This is a bad value and indicates that ETN is not financially healthy enough and could expect problems in meeting its short term obligations.
ETN has a worse Quick ratio (0.76) than 64.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.24 | ||
| Quick Ratio | 0.76 |
3. Growth
3.1 Past
ETN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.72%, which is quite good.
The Earnings Per Share has been growing by 13.71% on average over the past years. This is quite good.
ETN shows a small growth in Revenue. In the last year, the Revenue has grown by 7.66%.
Measured over the past years, ETN shows a small growth in Revenue. The Revenue has been growing by 3.07% on average per year.
EPS 1Y (TTM)11.72%
EPS 3Y17.66%
EPS 5Y13.71%
EPS Q2Q%8.06%
Revenue 1Y (TTM)7.66%
Revenue growth 3Y8.22%
Revenue growth 5Y3.07%
Sales Q2Q%10.68%
3.2 Future
Based on estimates for the next years, ETN will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.69% on average per year.
Based on estimates for the next years, ETN will show a quite strong growth in Revenue. The Revenue will grow by 9.27% on average per year.
EPS Next Y12.6%
EPS Next 2Y13.31%
EPS Next 3Y12.73%
EPS Next 5Y14.69%
Revenue Next Year9.98%
Revenue Next 2Y9.55%
Revenue Next 3Y8.81%
Revenue Next 5Y9.27%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same 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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 32.93, which means the current valuation is very expensive for ETN.
ETN's Price/Earnings ratio is a bit cheaper when compared to the industry. ETN is cheaper than 74.19% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.86, ETN is valued at the same level.
A Price/Forward Earnings ratio of 26.93 indicates a quite expensive valuation of ETN.
ETN's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. ETN is cheaper than 73.12% of the companies in the same industry.
ETN is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 23.32, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.93 | ||
| Fwd PE | 26.93 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ETN is valued a bit cheaper than the industry average as 73.12% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, ETN is valued a bit cheaper than the industry average as 73.12% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 44.42 | ||
| EV/EBITDA | 26.32 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
ETN has an outstanding profitability rating, which may justify a higher PE ratio.
ETN's earnings are expected to grow with 12.73% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.61
PEG (5Y)2.4
EPS Next 2Y13.31%
EPS Next 3Y12.73%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.10%, ETN has a reasonable but not impressive dividend return.
ETN's Dividend Yield is rather good when compared to the industry average which is at 3.13. ETN pays more dividend than 89.25% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.44, ETN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.1% |
5.2 History
The dividend of ETN has a limited annual growth rate of 5.70%.
ETN has been paying a dividend for at least 10 years, so it has a reliable track record.
ETN has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)5.7%
Div Incr Years15
Div Non Decr Years34
5.3 Sustainability
ETN pays out 39.79% of its income as dividend. This is a sustainable payout ratio.
ETN's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP39.79%
EPS Next 2Y13.31%
EPS Next 3Y12.73%
373.46
-3.3 (-0.88%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryElectrical Equipment
Earnings (Last)
Earnings (Next)
Inst Owners86.86%
Inst Owner Change0%
Ins Owners0.06%
Ins Owner Change-3.29%
Market Cap145.39B
Analysts77.89
Price Target398.17 (6.62%)
Short Float %1.85%
Short Ratio3.03
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.1% |
Yearly Dividend3.79
Dividend Growth(5Y)5.7%
DP39.79%
Div Incr Years15
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.23%
Min EPS beat(2)-0.48%
Max EPS beat(2)0.03%
EPS beat(4)2
Avg EPS beat(4)-0.09%
Min EPS beat(4)-0.48%
Max EPS beat(4)0.37%
EPS beat(8)6
Avg EPS beat(8)1.73%
EPS beat(12)8
Avg EPS beat(12)1.76%
EPS beat(16)11
Avg EPS beat(16)1.42%
Revenue beat(2)2
Avg Revenue beat(2)0.8%
Min Revenue beat(2)0.69%
Max Revenue beat(2)0.92%
Revenue beat(4)2
Avg Revenue beat(4)-0.57%
Min Revenue beat(4)-2.45%
Max Revenue beat(4)0.92%
Revenue beat(8)2
Avg Revenue beat(8)-0.59%
Revenue beat(12)5
Avg Revenue beat(12)-0.07%
Revenue beat(16)6
Avg Revenue beat(16)-0.46%
PT rev (1m)0.51%
PT rev (3m)11.8%
EPS NQ rev (1m)-0.01%
EPS NQ rev (3m)-1.29%
EPS NY rev (1m)0.13%
EPS NY rev (3m)0.65%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)0.93%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)0.97%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.93 | ||
| Fwd PE | 26.93 | ||
| P/S | 5.59 | ||
| P/FCF | 44.42 | ||
| P/OCF | 35.81 | ||
| P/B | 7.81 | ||
| P/tB | N/A | ||
| EV/EBITDA | 26.32 |
EPS(TTM)11.34
EY3.04%
EPS(NY)13.87
Fwd EY3.71%
FCF(TTM)8.41
FCFY2.25%
OCF(TTM)10.43
OCFY2.79%
SpS66.76
BVpS47.79
TBVpS-6.19
PEG (NY)2.61
PEG (5Y)2.4
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.69% | ||
| ROE | 21.1% | ||
| ROCE | 15.88% | ||
| ROIC | 12.83% | ||
| ROICexc | 13.07% | ||
| ROICexgc | 39.42% | ||
| OM | 18.89% | ||
| PM (TTM) | 15.11% | ||
| GM | 38.16% | ||
| FCFM | 12.59% |
ROA(3y)8.43%
ROA(5y)7.2%
ROE(3y)17.29%
ROE(5y)14.88%
ROIC(3y)10.83%
ROIC(5y)9.09%
ROICexc(3y)11.53%
ROICexc(5y)9.59%
ROICexgc(3y)38.67%
ROICexgc(5y)33.99%
ROCE(3y)12.98%
ROCE(5y)10.88%
ROICexcg growth 3Y6.49%
ROICexcg growth 5Y11.09%
ROICexc growth 3Y21.4%
ROICexc growth 5Y9.81%
OM growth 3Y15.21%
OM growth 5Y7.39%
PM growth 3Y11.77%
PM growth 5Y8.09%
GM growth 3Y5.78%
GM growth 5Y2.99%
F-Score8
Asset Turnover0.64
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 3.36 | ||
| Debt/EBITDA | 1.68 | ||
| Cap/Depr | 81.81% | ||
| Cap/Sales | 3.03% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 69.15% | ||
| Profit Quality | 83.37% | ||
| Current Ratio | 1.24 | ||
| Quick Ratio | 0.76 | ||
| Altman-Z | 5.44 |
F-Score8
WACC7.41%
ROIC/WACC1.73
Cap/Depr(3y)77.39%
Cap/Depr(5y)68.5%
Cap/Sales(3y)3.13%
Cap/Sales(5y)2.9%
Profit Quality(3y)86.8%
Profit Quality(5y)103.14%
High Growth Momentum
Growth
EPS 1Y (TTM)11.72%
EPS 3Y17.66%
EPS 5Y13.71%
EPS Q2Q%8.06%
EPS Next Y12.6%
EPS Next 2Y13.31%
EPS Next 3Y12.73%
EPS Next 5Y14.69%
Revenue 1Y (TTM)7.66%
Revenue growth 3Y8.22%
Revenue growth 5Y3.07%
Sales Q2Q%10.68%
Revenue Next Year9.98%
Revenue Next 2Y9.55%
Revenue Next 3Y8.81%
Revenue Next 5Y9.27%
EBIT growth 1Y9.53%
EBIT growth 3Y24.68%
EBIT growth 5Y10.68%
EBIT Next Year24.92%
EBIT Next 3Y15.55%
EBIT Next 5Y12.5%
FCF growth 1Y20.86%
FCF growth 3Y30.36%
FCF growth 5Y4.2%
OCF growth 1Y21.63%
OCF growth 3Y25.99%
OCF growth 5Y4.62%