EATON CORP PLC (ETN) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ETN - IE00B8KQN827 - Common Stock
318.51 USD
-2.35 (-0.73%)
319 USD
+0.49 (+0.15%)
Overall ETN gets a fundamental rating of 7 out of 10. We evaluated ETN against 91 industry peers in the Electrical Equipment industry. ETN has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. ETN has a decent growth rate and is not valued too expensively. These ratings would make ETN suitable for quality investing!
1. Profitability
1.1 Basic Checks
In the past year ETN was profitable.
In the past year ETN had a positive cash flow from operations.
In the past 5 years ETN has always been profitable.
In the past 5 years ETN always reported a positive cash flow from operatings.
1.2 Ratios
ETN has a better Return On Assets (9.66%) than 91.21% of its industry peers.
With an excellent Return On Equity value of 20.84%, ETN belongs to the best of the industry, outperforming 92.31% of the companies in the same industry.
The Return On Invested Capital of ETN (13.15%) is better than 92.31% of its industry peers.
ETN had an Average Return On Invested Capital over the past 3 years of 10.83%. This is in line with the industry average of 9.90%.
The 3 year average ROIC (10.83%) for ETN is below the current ROIC(13.15%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.66% | ||
| ROE | 20.84% | ||
| ROIC | 13.15% |
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 14.74%, ETN belongs to the top of the industry, outperforming 89.01% of the companies in the same industry.
In the last couple of years the Profit Margin of ETN has grown nicely.
ETN's Operating Margin of 18.84% is amongst the best of the industry. ETN outperforms 93.41% of its industry peers.
ETN's Operating Margin has improved in the last couple of years.
The Gross Margin of ETN (38.10%) is better than 86.81% of its industry peers.
In the last couple of years the Gross Margin of ETN has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.84% | ||
| PM (TTM) | 14.74% | ||
| GM | 38.1% |
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
The number of shares outstanding for ETN has been reduced compared to 5 years ago.
The debt/assets ratio for ETN has been reduced compared to a year ago.
2.2 Solvency
ETN has an Altman-Z score of 4.89. This indicates that ETN is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 4.89, ETN is doing good in the industry, outperforming 78.02% of the companies in the same industry.
The Debt to FCF ratio of ETN is 3.21, which is a good value as it means it would take ETN, 3.21 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 3.21, ETN belongs to the best of the industry, outperforming 81.32% of the companies in the same industry.
ETN has a Debt/Equity ratio of 0.51. This is a neutral value indicating ETN is somewhat dependend on debt financing.
ETN has a Debt to Equity ratio (0.51) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.51 | ||
| Debt/FCF | 3.21 | ||
| Altman-Z | 4.89 |
ROIC/WACC1.69
WACC7.8%
2.3 Liquidity
ETN has a Current Ratio of 1.28. This is a normal value and indicates that ETN is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.28, ETN is doing worse than 63.74% of the companies in the same industry.
A Quick Ratio of 0.79 indicates that ETN may have some problems paying its short term obligations.
The Quick ratio of ETN (0.79) is worse than 63.74% 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 | 1.28 | ||
| Quick Ratio | 0.79 |
3. Growth
3.1 Past
ETN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.98%, which is quite good.
The Earnings Per Share has been growing by 13.71% on average over the past years. This is quite good.
The Revenue has grown by 8.24% in the past year. This is quite good.
ETN shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.07% yearly.
EPS 1Y (TTM)9.98%
EPS 3Y17.66%
EPS 5Y13.71%
EPS Q2Q%8.1%
Revenue 1Y (TTM)8.24%
Revenue growth 3Y8.22%
Revenue growth 5Y3.07%
Sales Q2Q%10.13%
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 10.78% on average per year.
The Revenue is expected to grow by 9.21% on average over the next years. This is quite good.
EPS Next Y12.42%
EPS Next 2Y13.03%
EPS Next 3Y13.17%
EPS Next 5Y10.78%
Revenue Next Year10.01%
Revenue Next 2Y9.82%
Revenue Next 3Y9.55%
Revenue Next 5Y9.21%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past 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
Based on the Price/Earnings ratio of 27.53, the valuation of ETN can be described as expensive.
Based on the Price/Earnings ratio, ETN is valued a bit cheaper than 76.92% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.51. ETN is around the same levels.
With a Price/Forward Earnings ratio of 23.08, ETN is valued on the expensive side.
Based on the Price/Forward Earnings ratio, ETN is valued a bit cheaper than 74.73% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ETN to the average of the S&P500 Index (23.13), we can say ETN is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.53 | ||
| Fwd PE | 23.08 |
4.2 Price Multiples
ETN's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ETN is cheaper than 75.82% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ETN is valued a bit cheaper than 73.63% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 37.26 | ||
| EV/EBITDA | 22.12 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
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 13.17% in the coming years.
PEG (NY)2.22
PEG (5Y)2.01
EPS Next 2Y13.03%
EPS Next 3Y13.17%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.29%, 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 0.27. ETN pays more dividend than 92.31% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.00, ETN is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.29% |
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
ETN pays out 40.54% of its income as dividend. 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.
DP40.54%
EPS Next 2Y13.03%
EPS Next 3Y13.17%
318.51
-2.35 (-0.73%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryElectrical Equipment
Earnings (Last)
Earnings (Next)
Inst Owners85.7%
Inst Owner Change-4.23%
Ins Owners0.04%
Ins Owner Change-0.1%
Market Cap123.71B
Revenue(TTM)26.63B
Net Income(TTM)3.93B
Analysts78.24
Price Target405.2 (27.22%)
Short Float %1.79%
Short Ratio2.4
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.29% |
Yearly Dividend3.79
Dividend Growth(5Y)5.7%
DP40.54%
Div Incr Years15
Div Non Decr Years34
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.2%
Min EPS beat(2)-0.42%
Max EPS beat(2)0.03%
EPS beat(4)1
Avg EPS beat(4)-0.29%
Min EPS beat(4)-0.48%
Max EPS beat(4)0.03%
EPS beat(8)5
Avg EPS beat(8)1.09%
EPS beat(12)8
Avg EPS beat(12)1.75%
EPS beat(16)10
Avg EPS beat(16)1.39%
Revenue beat(2)1
Avg Revenue beat(2)-0.78%
Min Revenue beat(2)-2.25%
Max Revenue beat(2)0.69%
Revenue beat(4)2
Avg Revenue beat(4)-0.78%
Min Revenue beat(4)-2.45%
Max Revenue beat(4)0.92%
Revenue beat(8)2
Avg Revenue beat(8)-0.73%
Revenue beat(12)5
Avg Revenue beat(12)-0.18%
Revenue beat(16)6
Avg Revenue beat(16)-0.42%
PT rev (1m)-0.62%
PT rev (3m)1.97%
EPS NQ rev (1m)-0.24%
EPS NQ rev (3m)-0.65%
EPS NY rev (1m)-0.14%
EPS NY rev (3m)-0.16%
Revenue NQ rev (1m)-0.14%
Revenue NQ rev (3m)-0.06%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)0.05%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.53 | ||
| Fwd PE | 23.08 | ||
| P/S | 4.64 | ||
| P/FCF | 37.26 | ||
| P/OCF | 30.16 | ||
| P/B | 6.57 | ||
| P/tB | N/A | ||
| EV/EBITDA | 22.12 |
EPS(TTM)11.57
EY3.63%
EPS(NY)13.8
Fwd EY4.33%
FCF(TTM)8.55
FCFY2.68%
OCF(TTM)10.56
OCFY3.32%
SpS68.57
BVpS48.51
TBVpS-5.4
PEG (NY)2.22
PEG (5Y)2.01
Graham Number112.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.66% | ||
| ROE | 20.84% | ||
| ROCE | 16.1% | ||
| ROIC | 13.15% | ||
| ROICexc | 13.39% | ||
| ROICexgc | 40.27% | ||
| OM | 18.84% | ||
| PM (TTM) | 14.74% | ||
| GM | 38.1% | ||
| FCFM | 12.47% |
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%
ROICexgc growth 3Y6.49%
ROICexgc 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 Turnover0.66
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.51 | ||
| Debt/FCF | 3.21 | ||
| Debt/EBITDA | 1.59 | ||
| Cap/Depr | 79.39% | ||
| Cap/Sales | 2.94% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 68.33% | ||
| Profit Quality | 84.54% | ||
| Current Ratio | 1.28 | ||
| Quick Ratio | 0.79 | ||
| Altman-Z | 4.89 |
F-Score8
WACC7.8%
ROIC/WACC1.69
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)9.98%
EPS 3Y17.66%
EPS 5Y13.71%
EPS Q2Q%8.1%
EPS Next Y12.42%
EPS Next 2Y13.03%
EPS Next 3Y13.17%
EPS Next 5Y10.78%
Revenue 1Y (TTM)8.24%
Revenue growth 3Y8.22%
Revenue growth 5Y3.07%
Sales Q2Q%10.13%
Revenue Next Year10.01%
Revenue Next 2Y9.82%
Revenue Next 3Y9.55%
Revenue Next 5Y9.21%
EBIT growth 1Y9.02%
EBIT growth 3Y24.68%
EBIT growth 5Y10.68%
EBIT Next Year25.01%
EBIT Next 3Y16.66%
EBIT Next 5Y12.95%
FCF growth 1Y19.04%
FCF growth 3Y30.36%
FCF growth 5Y4.2%
OCF growth 1Y16.8%
OCF growth 3Y25.99%
OCF growth 5Y4.62%
EATON CORP PLC / ETN FAQ
Can you provide the ChartMill fundamental rating for EATON CORP PLC?
ChartMill assigns a fundamental rating of 7 / 10 to ETN.
What is the valuation status of EATON CORP PLC (ETN) stock?
ChartMill assigns a valuation rating of 4 / 10 to EATON CORP PLC (ETN). This can be considered as Fairly Valued.
How profitable is EATON CORP PLC (ETN) stock?
EATON CORP PLC (ETN) has a profitability rating of 9 / 10.
Can you provide the PE and PB ratios for ETN stock?
The Price/Earnings (PE) ratio for EATON CORP PLC (ETN) is 27.53 and the Price/Book (PB) ratio is 6.57.
What is the earnings growth outlook for EATON CORP PLC?
The Earnings per Share (EPS) of EATON CORP PLC (ETN) is expected to grow by 12.42% in the next year.