GENERAL ELECTRIC (GE) Stock Fundamental Analysis
NYSE:GE - New York Stock Exchange, Inc. - US3696041033 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to GE. GE was compared to 65 industry peers in the Aerospace & Defense industry. While GE has a great profitability rating, there are quite some concerns on its financial health. GE is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year GE was profitable.
In the past year GE had a positive cash flow from operations.
Of the past 5 years GE 4 years were profitable.
GE had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
GE's Return On Assets of 5.64% is fine compared to the rest of the industry. GE outperforms 70.77% of its industry peers.
GE has a Return On Equity of 36.34%. This is amongst the best in the industry. GE outperforms 98.46% of its industry peers.
GE's Return On Invested Capital of 6.47% is fine compared to the rest of the industry. GE outperforms 61.54% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for GE is below the industry average of 7.89%.
The 3 year average ROIC (3.20%) for GE is below the current ROIC(6.47%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.64% | ||
| ROE | 36.34% | ||
| ROIC | 6.47% |
ROA(3y)3.55%
ROA(5y)1.86%
ROE(3y)22.52%
ROE(5y)13.1%
ROIC(3y)3.2%
ROIC(5y)N/A
1.3 Margins
With an excellent Profit Margin value of 17.63%, GE belongs to the best of the industry, outperforming 95.38% of the companies in the same industry.
Looking at the Operating Margin, with a value of 16.35%, GE belongs to the top of the industry, outperforming 87.69% of the companies in the same industry.
In the last couple of years the Operating Margin of GE has grown nicely.
With a decent Gross Margin value of 35.83%, GE is doing good in the industry, outperforming 72.31% of the companies in the same industry.
GE's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.35% | ||
| PM (TTM) | 17.63% | ||
| GM | 35.83% |
OM growth 3Y396.9%
OM growth 5Y30.84%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y18.73%
GM growth 5Y6.44%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so GE is destroying value.
The number of shares outstanding for GE has been reduced compared to 1 year ago.
The number of shares outstanding for GE has been reduced compared to 5 years ago.
The debt/assets ratio for GE is higher compared to a year ago.
2.2 Solvency
GE has an Altman-Z score of 2.67. This is not the best score and indicates that GE is in the grey zone with still only limited risk for bankruptcy at the moment.
GE's Altman-Z score of 2.67 is in line compared to the rest of the industry. GE outperforms 43.08% of its industry peers.
GE has a debt to FCF ratio of 4.44. This is a neutral value as GE would need 4.44 years to pay back of all of its debts.
GE's Debt to FCF ratio of 4.44 is fine compared to the rest of the industry. GE outperforms 78.46% of its industry peers.
GE has a Debt/Equity ratio of 0.91. This is a neutral value indicating GE is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.91, GE is not doing good in the industry: 70.77% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.91 | ||
| Debt/FCF | 4.44 | ||
| Altman-Z | 2.67 |
ROIC/WACC0.67
WACC9.69%
2.3 Liquidity
A Current Ratio of 1.08 indicates that GE should not have too much problems paying its short term obligations.
GE has a Current ratio of 1.08. This is amonst the worse of the industry: GE underperforms 83.08% of its industry peers.
A Quick Ratio of 0.77 indicates that GE may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.77, GE is doing worse than 83.08% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.08 | ||
| Quick Ratio | 0.77 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 54.03% over the past year.
Measured over the past years, GE shows a decrease in Earnings Per Share. The EPS has been decreasing by -1.65% on average per year.
Looking at the last year, GE shows a quite strong growth in Revenue. The Revenue has grown by 8.81% in the last year.
GE shows a very negative growth in Revenue. Measured over the last years, the Revenue has been decreasing by -15.57% yearly.
EPS 1Y (TTM)54.03%
EPS 3Y28.22%
EPS 5Y-1.65%
EPS Q2Q%81.71%
Revenue 1Y (TTM)8.81%
Revenue growth 3Y-11.83%
Revenue growth 5Y-15.57%
Sales Q2Q%-40.68%
3.2 Future
The Earnings Per Share is expected to grow by 15.13% on average over the next years. This is quite good.
Based on estimates for the next years, GE will show a quite strong growth in Revenue. The Revenue will grow by 9.14% on average per year.
EPS Next Y24.51%
EPS Next 2Y21.49%
EPS Next 3Y19.63%
EPS Next 5Y15.13%
Revenue Next Year13.74%
Revenue Next 2Y12.11%
Revenue Next 3Y11.28%
Revenue Next 5Y9.14%
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 accelerating.
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
Based on the Price/Earnings ratio of 39.06, the valuation of GE can be described as expensive.
GE's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 28.88. GE is valued slightly more expensive when compared to this.
Based on the Price/Forward Earnings ratio of 30.41, the valuation of GE can be described as expensive.
Based on the Price/Forward Earnings ratio, GE is valued a bit cheaper than the industry average as 63.08% of the companies are valued more expensively.
GE's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 21.20.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.06 | ||
| Fwd PE | 30.41 |
4.2 Price Multiples
GE's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, GE is valued a bit cheaper than the industry average as 67.69% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 48.75 | ||
| EV/EBITDA | 29.4 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
GE has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as GE's earnings are expected to grow with 19.63% in the coming years.
PEG (NY)1.59
PEG (5Y)N/A
EPS Next 2Y21.49%
EPS Next 3Y19.63%
5. Dividend
5.1 Amount
GE has a yearly dividend return of 0.72%, which is pretty low.
GE's Dividend Yield is a higher than the industry average which is at 1.35.
Compared to an average S&P500 Dividend Yield of 2.45, GE's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.72% |
5.2 History
The dividend of GE is nicely growing with an annual growth rate of 9.39%!
GE has paid a dividend for at least 10 years, which is a reliable track record.
GE has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)9.39%
Div Incr Years2
Div Non Decr Years4
5.3 Sustainability
17.50% of the earnings are spent on dividend by GE. This is a low number and sustainable payout ratio.
The dividend of GE is growing, but earnings are growing more, so the dividend growth is sustainable.
DP17.5%
EPS Next 2Y21.49%
EPS Next 3Y19.63%
201.54
+1.04 (+0.52%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners80.08%
Inst Owner Change0.59%
Ins Owners0.17%
Ins Owner Change0.12%
Market Cap214.96B
Analysts83.45
Price Target228.38 (13.32%)
Short Float %1.14%
Short Ratio1.97
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.72% |
Yearly Dividend0.93
Dividend Growth(5Y)9.39%
DP17.5%
Div Incr Years2
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)18.75%
Min EPS beat(2)14.46%
Max EPS beat(2)23.03%
EPS beat(4)3
Avg EPS beat(4)13.5%
Min EPS beat(4)-1.74%
Max EPS beat(4)23.03%
EPS beat(8)7
Avg EPS beat(8)21.29%
EPS beat(12)11
Avg EPS beat(12)35.55%
EPS beat(16)15
Avg EPS beat(16)32.8%
Revenue beat(2)1
Avg Revenue beat(2)-1.03%
Min Revenue beat(2)-2.92%
Max Revenue beat(2)0.87%
Revenue beat(4)1
Avg Revenue beat(4)-2.87%
Min Revenue beat(4)-5.66%
Max Revenue beat(4)0.87%
Revenue beat(8)4
Avg Revenue beat(8)1.16%
Revenue beat(12)4
Avg Revenue beat(12)-19.58%
Revenue beat(16)4
Avg Revenue beat(16)-22.45%
PT rev (1m)-2.29%
PT rev (3m)5.41%
EPS NQ rev (1m)0.02%
EPS NQ rev (3m)4.74%
EPS NY rev (1m)-0.25%
EPS NY rev (3m)3.32%
Revenue NQ rev (1m)0.24%
Revenue NQ rev (3m)0.05%
Revenue NY rev (1m)0.07%
Revenue NY rev (3m)0.21%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.06 | ||
| Fwd PE | 30.41 | ||
| P/S | 5.42 | ||
| P/FCF | 48.75 | ||
| P/OCF | 41.12 | ||
| P/B | 11.17 | ||
| P/tB | 34.24 | ||
| EV/EBITDA | 29.4 |
EPS(TTM)5.16
EY2.56%
EPS(NY)6.63
Fwd EY3.29%
FCF(TTM)4.13
FCFY2.05%
OCF(TTM)4.9
OCFY2.43%
SpS37.2
BVpS18.05
TBVpS5.89
PEG (NY)1.59
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.64% | ||
| ROE | 36.34% | ||
| ROCE | 7.28% | ||
| ROIC | 6.47% | ||
| ROICexc | 7.62% | ||
| ROICexgc | 9.19% | ||
| OM | 16.35% | ||
| PM (TTM) | 17.63% | ||
| GM | 35.83% | ||
| FCFM | 11.11% |
ROA(3y)3.55%
ROA(5y)1.86%
ROE(3y)22.52%
ROE(5y)13.1%
ROIC(3y)3.2%
ROIC(5y)N/A
ROICexc(3y)3.81%
ROICexc(5y)N/A
ROICexgc(3y)4.52%
ROICexgc(5y)N/A
ROCE(3y)3.6%
ROCE(5y)N/A
ROICexcg growth 3Y385.39%
ROICexcg growth 5Y24.01%
ROICexc growth 3Y412.86%
ROICexc growth 5Y26.63%
OM growth 3Y396.9%
OM growth 5Y30.84%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y18.73%
GM growth 5Y6.44%
F-Score6
Asset Turnover0.32
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.91 | ||
| Debt/FCF | 4.44 | ||
| Debt/EBITDA | 2.35 | ||
| Cap/Depr | 85.31% | ||
| Cap/Sales | 2.06% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 70.18% | ||
| Profit Quality | 63.03% | ||
| Current Ratio | 1.08 | ||
| Quick Ratio | 0.77 | ||
| Altman-Z | 2.67 |
F-Score6
WACC9.69%
ROIC/WACC0.67
Cap/Depr(3y)67.38%
Cap/Depr(5y)59.46%
Cap/Sales(3y)3.4%
Cap/Sales(5y)2.98%
Profit Quality(3y)3112.18%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)54.03%
EPS 3Y28.22%
EPS 5Y-1.65%
EPS Q2Q%81.71%
EPS Next Y24.51%
EPS Next 2Y21.49%
EPS Next 3Y19.63%
EPS Next 5Y15.13%
Revenue 1Y (TTM)8.81%
Revenue growth 3Y-11.83%
Revenue growth 5Y-15.57%
Sales Q2Q%-40.68%
Revenue Next Year13.74%
Revenue Next 2Y12.11%
Revenue Next 3Y11.28%
Revenue Next 5Y9.14%
EBIT growth 1Y61.62%
EBIT growth 3Y338.1%
EBIT growth 5Y10.46%
EBIT Next Year34.71%
EBIT Next 3Y19.28%
EBIT Next 5Y13.87%
FCF growth 1Y-8.05%
FCF growth 3Y23.11%
FCF growth 5Y-10.02%
OCF growth 1Y-15.88%
OCF growth 3Y12.23%
OCF growth 5Y-11.62%