EATON CORP PLC (ETN)
IE00B8KQN827 - Common Stock
Overall ETN gets a fundamental rating of 7 out of 10. We evaluated ETN against 86 industry peers in the Electrical Equipment industry. Both the health and profitability get an excellent rating, making ETN a very profitable company, without any liquidiy or solvency issues. ETN is not valued too expensively and it also shows a decent growth rate. These ratings would make ETN suitable for quality 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.
ETN had positive earnings in each of the past 5 years.
ETN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ETN's Return On Assets of 8.37% is amongst the best of the industry. ETN outperforms 83.33% of its industry peers.
With an excellent Return On Equity value of 16.90%, ETN belongs to the best of the industry, outperforming 88.10% of the companies in the same industry.
ETN has a better Return On Invested Capital (10.95%) than 83.33% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ETN is in line with the industry average of 10.39%.
The last Return On Invested Capital (10.95%) for ETN is above the 3 year average (9.14%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.37% | ||
| ROE | 16.9% | ||
| ROIC | 10.95% |
ROA(3y)7.24%
ROA(5y)6.58%
ROE(3y)14.81%
ROE(5y)13.52%
ROIC(3y)9.14%
ROIC(5y)8.28%
1.3 Margins
The Profit Margin of ETN (13.87%) is better than 90.48% of its industry peers.
In the last couple of years the Profit Margin of ETN has grown nicely.
With an excellent Operating Margin value of 17.15%, ETN belongs to the best of the industry, outperforming 90.48% of the companies in the same industry.
ETN's Operating Margin has improved in the last couple of years.
ETN has a Gross Margin of 36.36%. This is amongst the best in the industry. ETN outperforms 83.33% of its industry peers.
In the last couple of years the Gross Margin of ETN has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.15% | ||
| PM (TTM) | 13.87% | ||
| GM | 36.36% |
OM growth 3Y22.3%
OM growth 5Y4.53%
PM growth 3Y20.67%
PM growth 5Y6.92%
GM growth 3Y6.01%
GM growth 5Y2.06%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ETN is still creating some value.
Compared to 1 year ago, ETN has more shares outstanding
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
An Altman-Z score of 5.45 indicates that ETN is not in any danger for bankruptcy at the moment.
ETN has a Altman-Z score of 5.45. This is amongst the best in the industry. ETN outperforms 88.10% of its industry peers.
The Debt to FCF ratio of ETN is 3.23, which is a good value as it means it would take ETN, 3.23 years of fcf income to pay off all of its debts.
ETN has a Debt to FCF ratio of 3.23. This is in the better half of the industry: ETN outperforms 79.76% of its industry peers.
A Debt/Equity ratio of 0.43 indicates that ETN is not too dependend on debt financing.
The Debt to Equity ratio of ETN (0.43) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | 3.23 | ||
| Altman-Z | 5.45 |
ROIC/WACC1.35
WACC8.13%
2.3 Liquidity
A Current Ratio of 1.51 indicates that ETN should not have too much problems paying its short term obligations.
ETN has a worse Current ratio (1.51) than 66.67% of its industry peers.
A Quick Ratio of 1.02 indicates that ETN should not have too much problems paying its short term obligations.
ETN has a worse Quick ratio (1.02) than 63.10% of its industry peers.
The current and quick ratio evaluation for ETN is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.51 | ||
| Quick Ratio | 1.02 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 20.34% over the past year.
The Earnings Per Share has been growing by 11.11% on average over the past years. This is quite good.
Looking at the last year, ETN shows a quite strong growth in Revenue. The Revenue has grown by 11.78% in the last year.
Measured over the past years, ETN shows a small growth in Revenue. The Revenue has been growing by 1.43% on average per year.
EPS 1Y (TTM)20.34%
EPS 3Y28.94%
EPS 5Y11.11%
EPS growth Q2Q23.79%
Revenue 1Y (TTM)11.78%
Revenue growth 3Y9.11%
Revenue growth 5Y1.43%
Revenue growth Q2Q10.83%
3.2 Future
ETN is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.11% yearly.
Based on estimates for the next years, ETN will show a small growth in Revenue. The Revenue will grow by 5.19% on average per year.
EPS Next Y13.61%
EPS Next 2Y12.43%
EPS Next 3Y12.4%
EPS Next 5Y12.11%
Revenue Next Year7.94%
Revenue Next 2Y7.64%
Revenue Next 3Y7.57%
Revenue Next 5Y5.19%
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 35.60, which means the current valuation is very expensive for ETN.
66.67% of the companies in the same industry are more expensive than ETN, based on the Price/Earnings ratio.
ETN's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 24.84.
A Price/Forward Earnings ratio of 31.33 indicates a quite expensive valuation of ETN.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ETN indicates a somewhat cheap valuation: ETN is cheaper than 70.24% of the companies listed in the same industry.
ETN's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 21.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.6 | ||
| Fwd PE | 31.33 |
4.2 Price Multiples
ETN's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ETN is cheaper than 65.48% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ETN is valued a bit cheaper than the industry average as 71.43% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 45.23 | ||
| EV/EBITDA | 27.37 |
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.
The excellent profitability rating of ETN may justify a higher PE ratio.
A more expensive valuation may be justified as ETN's earnings are expected to grow with 12.40% in the coming years.
PEG (NY)2.62
PEG (5Y)3.2
EPS Next 2Y12.43%
EPS Next 3Y12.4%
5. Dividend
5.1 Amount
ETN has a Yearly Dividend Yield of 1.19%. 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 2.46. ETN pays more dividend than 88.10% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.41, ETN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.19% |
5.2 History
The dividend of ETN has a limited annual growth rate of 5.40%.
ETN has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of ETN decreased in the last 3 years.
Dividend Growth(5Y)5.4%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
42.85% of the earnings are spent on dividend by ETN. This is a bit on the high side, but may be sustainable.
The dividend of ETN is growing, but earnings are growing more, so the dividend growth is sustainable.
DP42.85%
EPS Next 2Y12.43%
EPS Next 3Y12.4%
EATON CORP PLC
NYSE:ETN (4/26/2024, 7:04:00 PM)
After market: 324.3 0 (0%)324.3
+7.2 (+2.27%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryElectrical Equipment
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap129.68B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.19% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.6 | ||
| Fwd PE | 31.33 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.62
PEG (5Y)3.2
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.37% | ||
| ROE | 16.9% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 17.15% | ||
| PM (TTM) | 13.87% | ||
| GM | 36.36% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.6
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.51 | ||
| Quick Ratio | 1.02 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)20.34%
EPS 3Y28.94%
EPS 5Y
EPS growth Q2Q
EPS Next Y13.61%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)11.78%
Revenue growth 3Y9.11%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y