EATON CORP PLC (ETN) Stock Fundamental Analysis
NYSE:ETN - IE00B8KQN827 - Common Stock
347.61 USD
+2.23 (+0.65%)
347.01 USD
-0.6 (-0.17%)
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. While ETN belongs to the best of the industry regarding profitability, 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. This makes ETN very considerable for dividend investing!
1. Profitability
1.1 Basic Checks
ETN had positive earnings in the past year.
In the past year ETN had a positive cash flow from operations.
In the past 5 years ETN has always been profitable.
ETN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 9.69%, ETN belongs to the best of the industry, outperforming 93.55% of the companies in the same industry.
With an excellent Return On Equity value of 21.10%, ETN belongs to the best of the industry, outperforming 92.47% of the companies in the same industry.
ETN has a Return On Invested Capital of 12.83%. This is amongst the best in the industry. ETN outperforms 89.25% 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 10.00%.
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
With an excellent Profit Margin value of 15.11%, ETN belongs to the best 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.
With an excellent Gross Margin value of 38.16%, ETN belongs to the best of the industry, outperforming 86.02% of the companies in the same industry.
ETN's Gross Margin has improved in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), ETN is creating some value.
ETN has less shares outstanding than it did 1 year ago.
The number of shares outstanding for ETN has been reduced compared to 5 years ago.
ETN has a better debt/assets ratio than last year.
2.2 Solvency
ETN has an Altman-Z score of 5.16. This indicates that ETN is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 5.16, ETN belongs to the best of the industry, outperforming 82.80% of the companies in the same industry.
ETN has a debt to FCF ratio of 3.36. This is a good value and a sign of high solvency as ETN would need 3.36 years to pay back of all of its debts.
ETN's Debt to FCF ratio of 3.36 is fine compared to the rest of the industry. ETN outperforms 79.57% of its industry peers.
A Debt/Equity ratio of 0.53 indicates that ETN is somewhat dependend on debt financing.
ETN's Debt to Equity ratio of 0.53 is in line compared 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 | 5.16 |
ROIC/WACC1.78
WACC7.2%
2.3 Liquidity
A Current Ratio of 1.24 indicates that ETN should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.24, ETN is doing worse than 64.52% of the companies in the same industry.
A Quick Ratio of 0.76 indicates that ETN may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.76, ETN is doing worse than 64.52% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.24 | ||
| Quick Ratio | 0.76 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 11.72% over the past year.
ETN shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.71% yearly.
Looking at the last year, ETN shows a small growth in Revenue. The Revenue has grown by 7.66% in the last year.
ETN shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.07% yearly.
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
The Earnings Per Share is expected to grow by 14.10% on average over the next years. This is quite good.
Based on estimates for the next years, ETN will show a quite strong growth in Revenue. The Revenue will grow by 9.12% on average per year.
EPS Next Y12.46%
EPS Next 2Y12.75%
EPS Next 3Y12%
EPS Next 5Y14.1%
Revenue Next Year9.96%
Revenue Next 2Y9.36%
Revenue Next 3Y8.71%
Revenue Next 5Y9.12%
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 stable.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 30.65, which means the current valuation is very expensive for ETN.
Based on the Price/Earnings ratio, ETN is valued a bit cheaper than 75.27% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.24. ETN is around the same levels.
The Price/Forward Earnings ratio is 25.32, which means the current valuation is very expensive for ETN.
75.27% of the companies in the same industry are more expensive than ETN, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of ETN to the average of the S&P500 Index (22.81), we can say ETN is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.65 | ||
| Fwd PE | 25.32 |
4.2 Price Multiples
ETN's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ETN is cheaper than 72.04% of the companies in the same industry.
ETN's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. ETN is cheaper than 72.04% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.35 | ||
| EV/EBITDA | 24.6 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ETN does not grow enough to justify the current Price/Earnings ratio.
ETN has an outstanding profitability rating, which may justify a higher PE ratio.
ETN's earnings are expected to grow with 12.00% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.46
PEG (5Y)2.24
EPS Next 2Y12.75%
EPS Next 3Y12%
5. Dividend
5.1 Amount
ETN has a Yearly Dividend Yield of 1.20%. Purely for dividend investing, there may be better candidates out there.
ETN's Dividend Yield is rather good when compared to the industry average which is at 3.49. ETN pays more dividend than 89.25% of the companies in the same industry.
With a Dividend Yield of 1.20, ETN pays less dividend than the S&P500 average, which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.2% |
5.2 History
The dividend of ETN has a limited annual growth rate of 5.70%.
ETN has paid a dividend for at least 10 years, which is a reliable track record.
ETN has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)5.7%
Div Incr Years15
Div Non Decr Years34
5.3 Sustainability
39.79% of the earnings are spent on dividend by ETN. This is a low number and sustainable payout ratio.
The dividend of ETN is growing, but earnings are growing more, so the dividend growth is sustainable.
DP39.79%
EPS Next 2Y12.75%
EPS Next 3Y12%
347.61
+2.23 (+0.65%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryElectrical Equipment
Earnings (Last)
Earnings (Next)
Inst Owners86.21%
Inst Owner Change-0.77%
Ins Owners0.06%
Ins Owner Change-2.47%
Market Cap135.32B
Analysts77.58
Price Target396.13 (13.96%)
Short Float %1.5%
Short Ratio2.46
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.2% |
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)6.72%
PT rev (3m)12.63%
EPS NQ rev (1m)-0.88%
EPS NQ rev (3m)-1.64%
EPS NY rev (1m)0.43%
EPS NY rev (3m)0.53%
Revenue NQ rev (1m)0.52%
Revenue NQ rev (3m)3.52%
Revenue NY rev (1m)0.89%
Revenue NY rev (3m)0.85%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.65 | ||
| Fwd PE | 25.32 | ||
| P/S | 5.21 | ||
| P/FCF | 41.35 | ||
| P/OCF | 33.33 | ||
| P/B | 7.27 | ||
| P/tB | N/A | ||
| EV/EBITDA | 24.6 |
EPS(TTM)11.34
EY3.26%
EPS(NY)13.73
Fwd EY3.95%
FCF(TTM)8.41
FCFY2.42%
OCF(TTM)10.43
OCFY3%
SpS66.76
BVpS47.79
TBVpS-6.19
PEG (NY)2.46
PEG (5Y)2.24
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 | 5.16 |
F-Score8
WACC7.2%
ROIC/WACC1.78
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 Y12.46%
EPS Next 2Y12.75%
EPS Next 3Y12%
EPS Next 5Y14.1%
Revenue 1Y (TTM)7.66%
Revenue growth 3Y8.22%
Revenue growth 5Y3.07%
Sales Q2Q%10.68%
Revenue Next Year9.96%
Revenue Next 2Y9.36%
Revenue Next 3Y8.71%
Revenue Next 5Y9.12%
EBIT growth 1Y9.53%
EBIT growth 3Y24.68%
EBIT growth 5Y10.68%
EBIT Next Year23.82%
EBIT Next 3Y14.47%
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%