GENERAL ELECTRIC (GE) Stock Fundamental Analysis
NYSE:GE - New York Stock Exchange, Inc. - US3696041033 - Common Stock - Currency: USD
GE gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 65 industry peers in the Aerospace & Defense industry. GE has an excellent profitability rating, but there are concerns on its financial health. GE is valied quite expensively at the moment, while 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.
In the past 5 years GE always reported a positive cash flow from operatings.
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 63.08% of its industry peers.
The Average Return On Invested Capital over the past 3 years for GE is below the industry average of 7.86%.
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
The Profit Margin of GE (17.63%) is better than 95.38% of its industry peers.
GE's Operating Margin of 16.35% is amongst the best of the industry. GE outperforms 87.69% of its industry peers.
In the last couple of years the Operating Margin of GE has grown nicely.
The Gross Margin of GE (35.83%) is better than 73.85% of its industry peers.
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
GE has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
GE has less shares outstanding than it did 1 year ago.
GE has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, GE has a worse debt to assets ratio.
2.2 Solvency
GE has an Altman-Z score of 2.65. 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.
The Altman-Z score of GE (2.65) is comparable to the rest of the industry.
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 has a Debt to FCF ratio of 4.44. This is in the better half of the industry: GE outperforms 80.00% of its industry peers.
A Debt/Equity ratio of 0.91 indicates that 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 | 2.65 |
ROIC/WACC0.67
WACC9.71%
2.3 Liquidity
GE has a Current Ratio of 1.08. This is a normal value and indicates that GE is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of GE (1.08) is worse than 84.62% of its industry peers.
A Quick Ratio of 0.77 indicates that GE may have some problems paying its short term obligations.
GE has a Quick ratio of 0.77. This is amonst the worse of the industry: GE underperforms 81.54% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.08 | ||
| Quick Ratio | 0.77 |
3. Growth
3.1 Past
GE shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 54.03%, which is quite impressive.
GE shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -1.65% yearly.
The Revenue has grown by 8.81% in the past year. This is quite good.
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
Based on estimates for the next years, GE will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.13% on average per year.
GE is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.14% yearly.
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 38.46, the valuation of GE can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of GE is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 28.79, GE is valued a bit more expensive.
With a Price/Forward Earnings ratio of 29.94, GE can be considered very expensive at the moment.
66.15% of the companies in the same industry are more expensive than GE, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of GE to the average of the S&P500 Index (21.38), we can say GE is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.46 | ||
| Fwd PE | 29.94 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of GE is on the same level as its industry peers.
Based on the Price/Free Cash Flow ratio, GE is valued a bit cheaper than 67.69% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 48 | ||
| EV/EBITDA | 28.96 |
4.3 Compensation for Growth
GE's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of GE 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)1.57
PEG (5Y)N/A
EPS Next 2Y21.49%
EPS Next 3Y19.63%
5. Dividend
5.1 Amount
With a yearly dividend of 0.74%, GE is not a good candidate for dividend investing.
GE's Dividend Yield is a higher than the industry average which is at 1.37.
With a Dividend Yield of 0.74, GE pays less dividend than the S&P500 average, which is at 2.47.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.74% |
5.2 History
On average, the dividend of GE grows each year by 9.39%, which is quite nice.
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.
GE's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP17.5%
EPS Next 2Y21.49%
EPS Next 3Y19.63%
198.43
+1.02 (+0.52%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners80.08%
Inst Owner Change0.62%
Ins Owners0.17%
Ins Owner Change0.12%
Market Cap211.64B
Analysts83.45
Price Target228.38 (15.09%)
Short Float %1.21%
Short Ratio2.09
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.74% |
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)0.49%
PT rev (3m)8.41%
EPS NQ rev (1m)1.13%
EPS NQ rev (3m)9.18%
EPS NY rev (1m)-0.25%
EPS NY rev (3m)3.32%
Revenue NQ rev (1m)-1.05%
Revenue NQ rev (3m)-0.61%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)0.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.46 | ||
| Fwd PE | 29.94 | ||
| P/S | 5.33 | ||
| P/FCF | 48 | ||
| P/OCF | 40.48 | ||
| P/B | 10.99 | ||
| P/tB | 33.71 | ||
| EV/EBITDA | 28.96 |
EPS(TTM)5.16
EY2.6%
EPS(NY)6.63
Fwd EY3.34%
FCF(TTM)4.13
FCFY2.08%
OCF(TTM)4.9
OCFY2.47%
SpS37.2
BVpS18.05
TBVpS5.89
PEG (NY)1.57
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 | 2.65 |
F-Score6
WACC9.71%
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%