EATON CORP PLC (ETN) Stock Fundamental Analysis
USA - NYSE:ETN - IE00B8KQN827 - Common Stock
352.39 USD
-1.68 (-0.47%)
353.04 USD
+0.65 (+0.18%)
ETN gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 91 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 has a correct valuation and a medium growth rate. This makes ETN very considerable 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.
ETN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ETN has a Return On Assets of 9.66%. This is amongst the best in the industry. ETN outperforms 91.21% of its industry peers.
The Return On Equity of ETN (20.84%) is better than 92.31% of its industry peers.
ETN has a better Return On Invested Capital (13.15%) than 90.11% 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 10.45%.
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
ETN's Profit Margin of 14.74% is amongst the best of the industry. ETN outperforms 87.91% of its industry peers.
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 94.51% of its industry peers.
In the last couple of years the Operating Margin of ETN has grown nicely.
ETN has a Gross Margin of 38.10%. This is amongst the best in the industry. ETN outperforms 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ETN is creating value.
ETN has less shares outstanding than it did 1 year ago.
ETN has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, ETN has an improved debt to assets ratio.
2.2 Solvency
ETN has an Altman-Z score of 5.27. This indicates that ETN is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of ETN (5.27) is better than 81.32% of its industry peers.
ETN has a debt to FCF ratio of 3.21. This is a good value and a sign of high solvency as ETN would need 3.21 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.21, ETN belongs to the top of the industry, outperforming 80.22% of the companies in the same industry.
A Debt/Equity ratio of 0.51 indicates that ETN is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.51, ETN perfoms like the industry average, outperforming 46.15% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.51 | ||
| Debt/FCF | 3.21 | ||
| Altman-Z | 5.27 |
ROIC/WACC1.8
WACC7.3%
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.
ETN has a worse Current ratio (1.28) than 61.54% of its industry peers.
ETN has a Quick Ratio of 1.28. This is a bad value and indicates that ETN is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.79, ETN is not doing good in the industry: 64.84% of the companies in the same industry are doing better.
ETN does not score too well on the current and quick ratio evaluation. However, as it has 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.
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)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
The Earnings Per Share is expected to grow by 14.69% 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 9.27% on average per year.
EPS Next Y12.58%
EPS Next 2Y13.27%
EPS Next 3Y12.78%
EPS Next 5Y14.69%
Revenue Next Year9.97%
Revenue Next 2Y9.58%
Revenue Next 3Y8.9%
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
With a Price/Earnings ratio of 30.46, ETN can be considered very expensive at the moment.
Based on the Price/Earnings ratio, ETN is valued a bit cheaper than 73.63% of the companies in the same industry.
ETN is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 25.89, which is the current average of the S&P500 Index.
ETN is valuated quite expensively with a Price/Forward Earnings ratio of 25.43.
72.53% 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 (34.59), we can say ETN is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.46 | ||
| Fwd PE | 25.43 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ETN indicates a somewhat cheap valuation: ETN is cheaper than 71.43% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, ETN is valued a bit cheaper than the industry average as 74.73% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.32 | ||
| EV/EBITDA | 24.37 |
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.
ETN has an outstanding profitability rating, which may justify a higher PE ratio.
ETN's earnings are expected to grow with 12.78% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.42
PEG (5Y)2.22
EPS Next 2Y13.27%
EPS Next 3Y12.78%
5. Dividend
5.1 Amount
ETN has a Yearly Dividend Yield of 1.17%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.17, ETN pays a better dividend. On top of this ETN pays more dividend than 89.01% of the companies listed in the same industry.
With a Dividend Yield of 1.17, ETN pays less dividend than the S&P500 average, which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.17% |
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 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
40.54% of the earnings are spent on dividend by ETN. This is a bit on the high side, but may be sustainable.
ETN's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP40.54%
EPS Next 2Y13.27%
EPS Next 3Y12.78%
352.39
-1.68 (-0.47%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryElectrical Equipment
Earnings (Last)
Earnings (Next)
Inst Owners86.86%
Inst Owner Change-3.54%
Ins Owners0.06%
Ins Owner Change-0.56%
Market Cap137.19B
Revenue(TTM)26.63B
Net Income(TTM)3.93B
Analysts78.38
Price Target403.33 (14.46%)
Short Float %1.61%
Short Ratio3.04
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.17% |
Yearly Dividend3.79
Dividend Growth(5Y)5.7%
DP40.54%
Div Incr Years15
Div Non Decr Years34
Ex-Date
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)1.3%
PT rev (3m)7.26%
EPS NQ rev (1m)-0.38%
EPS NQ rev (3m)0.26%
EPS NY rev (1m)-0.02%
EPS NY rev (3m)0.53%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)0.35%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)0.77%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.46 | ||
| Fwd PE | 25.43 | ||
| P/S | 5.15 | ||
| P/FCF | 41.32 | ||
| P/OCF | 33.44 | ||
| P/B | 7.28 | ||
| P/tB | N/A | ||
| EV/EBITDA | 24.37 |
EPS(TTM)11.57
EY3.28%
EPS(NY)13.86
Fwd EY3.93%
FCF(TTM)8.53
FCFY2.42%
OCF(TTM)10.54
OCFY2.99%
SpS68.41
BVpS48.4
TBVpS-5.39
PEG (NY)2.42
PEG (5Y)2.22
Graham Number112.25
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 | 5.27 |
F-Score8
WACC7.3%
ROIC/WACC1.8
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 Y12.58%
EPS Next 2Y13.27%
EPS Next 3Y12.78%
EPS Next 5Y14.69%
Revenue 1Y (TTM)8.24%
Revenue growth 3Y8.22%
Revenue growth 5Y3.07%
Sales Q2Q%10.13%
Revenue Next Year9.97%
Revenue Next 2Y9.58%
Revenue Next 3Y8.9%
Revenue Next 5Y9.27%
EBIT growth 1Y9.02%
EBIT growth 3Y24.68%
EBIT growth 5Y10.68%
EBIT Next Year24.92%
EBIT Next 3Y15.55%
EBIT Next 5Y12.5%
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.
Can you provide the valuation status for EATON CORP PLC?
ChartMill assigns a valuation rating of 5 / 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.
What is the financial health of EATON CORP PLC (ETN) stock?
The financial health rating of EATON CORP PLC (ETN) is 6 / 10.
How sustainable is the dividend of EATON CORP PLC (ETN) stock?
The dividend rating of EATON CORP PLC (ETN) is 6 / 10 and the dividend payout ratio is 40.54%.