INGERSOLL-RAND INC (IR) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:IR - US45687V1061 - Common Stock
85.87 USD
-0.4 (-0.46%)
Taking everything into account, IR scores 5 out of 10 in our fundamental rating. IR was compared to 132 industry peers in the Machinery industry. While IR belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. IR is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- IR had positive earnings in the past year.
- IR had a positive operating cash flow in the past year.
- IR had positive earnings in 4 of the past 5 years.
- In the past 5 years IR always reported a positive cash flow from operatings.
1.2 Ratios
- IR has a Return On Assets (2.97%) which is in line with its industry peers.
- IR's Return On Equity of 5.34% is in line compared to the rest of the industry. IR outperforms 44.70% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 6.95%, IR is in line with its industry, outperforming 53.03% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for IR is below the industry average of 10.24%.
- The 3 year average ROIC (6.33%) for IR is below the current ROIC(6.95%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.97% | ||
| ROE | 5.34% | ||
| ROIC | 6.95% |
ROA(3y)4.58%
ROA(5y)3.45%
ROE(3y)7.59%
ROE(5y)5.73%
ROIC(3y)6.33%
ROIC(5y)4.79%
1.3 Margins
- With a decent Profit Margin value of 7.25%, IR is doing good in the industry, outperforming 63.64% of the companies in the same industry.
- IR's Profit Margin has improved in the last couple of years.
- IR's Operating Margin of 19.75% is amongst the best of the industry. IR outperforms 88.64% of its industry peers.
- In the last couple of years the Operating Margin of IR has grown nicely.
- IR's Gross Margin of 43.72% is amongst the best of the industry. IR outperforms 81.82% of its industry peers.
- In the last couple of years the Gross Margin of IR has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.75% | ||
| PM (TTM) | 7.25% | ||
| GM | 43.72% |
OM growth 3Y18.5%
OM growth 5Y9.27%
PM growth 3Y2.02%
PM growth 5Y8.01%
GM growth 3Y4.32%
GM growth 5Y2.58%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), IR is destroying value.
- Compared to 1 year ago, IR has about the same amount of shares outstanding.
- The number of shares outstanding for IR has been increased compared to 5 years ago.
- Compared to 1 year ago, IR has a worse debt to assets ratio.
2.2 Solvency
- IR has an Altman-Z score of 3.58. This indicates that IR is financially healthy and has little risk of bankruptcy at the moment.
- The Altman-Z score of IR (3.58) is comparable to the rest of the industry.
- The Debt to FCF ratio of IR is 3.83, which is a good value as it means it would take IR, 3.83 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of IR (3.83) is better than 61.36% of its industry peers.
- IR has a Debt/Equity ratio of 0.47. This is a healthy value indicating a solid balance between debt and equity.
- The Debt to Equity ratio of IR (0.47) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 3.83 | ||
| Altman-Z | 3.58 |
ROIC/WACC0.73
WACC9.5%
2.3 Liquidity
- IR has a Current Ratio of 2.16. This indicates that IR is financially healthy and has no problem in meeting its short term obligations.
- IR has a Current ratio (2.16) which is in line with its industry peers.
- IR has a Quick Ratio of 1.51. This is a normal value and indicates that IR is financially healthy and should not expect problems in meeting its short term obligations.
- The Quick ratio of IR (1.51) is better than 65.15% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.16 | ||
| Quick Ratio | 1.51 |
3. Growth
3.1 Past
- IR shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.72%.
- The Earnings Per Share has been growing by 15.65% on average over the past years. This is quite good.
- The Revenue has been growing slightly by 4.20% in the past year.
- The Revenue has been growing by 29.10% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)-2.72%
EPS 3Y15.06%
EPS 5Y15.65%
EPS Q2Q%2.38%
Revenue 1Y (TTM)4.2%
Revenue growth 3Y11.98%
Revenue growth 5Y29.1%
Sales Q2Q%5.05%
3.2 Future
- Based on estimates for the next years, IR will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.57% on average per year.
- IR is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.58% yearly.
EPS Next Y2.85%
EPS Next 2Y5.6%
EPS Next 3Y7.1%
EPS Next 5Y10.57%
Revenue Next Year4.78%
Revenue Next 2Y4.67%
Revenue Next 3Y4.86%
Revenue Next 5Y6.58%
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.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 26.67 indicates a quite expensive valuation of IR.
- The rest of the industry has a similar Price/Earnings ratio as IR.
- Compared to an average S&P500 Price/Earnings ratio of 28.82, IR is valued at the same level.
- IR is valuated rather expensively with a Price/Forward Earnings ratio of 23.41.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of IR is on the same level as its industry peers.
- IR's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.95.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.67 | ||
| Fwd PE | 23.41 |
4.2 Price Multiples
- IR's Enterprise Value to EBITDA is on the same level as the industry average.
- IR's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.15 | ||
| EV/EBITDA | 19.22 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- IR has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)9.37
PEG (5Y)1.7
EPS Next 2Y5.6%
EPS Next 3Y7.1%
5. Dividend
5.1 Amount
- IR has a yearly dividend return of 0.09%, which is pretty low.
- IR's Dividend Yield is comparable with the industry average which is at 1.01.
- Compared to an average S&P500 Dividend Yield of 1.82, IR's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.09% |
5.2 History
- IR has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- 5.93% of the earnings are spent on dividend by IR. This is a low number and sustainable payout ratio.
DP5.93%
EPS Next 2Y5.6%
EPS Next 3Y7.1%
INGERSOLL-RAND INC / IR FAQ
What is the fundamental rating for IR stock?
ChartMill assigns a fundamental rating of 5 / 10 to IR.
Can you provide the valuation status for INGERSOLL-RAND INC?
ChartMill assigns a valuation rating of 2 / 10 to INGERSOLL-RAND INC (IR). This can be considered as Overvalued.
How profitable is INGERSOLL-RAND INC (IR) stock?
INGERSOLL-RAND INC (IR) has a profitability rating of 7 / 10.
Can you provide the PE and PB ratios for IR stock?
The Price/Earnings (PE) ratio for INGERSOLL-RAND INC (IR) is 26.67 and the Price/Book (PB) ratio is 3.35.
What is the earnings growth outlook for INGERSOLL-RAND INC?
The Earnings per Share (EPS) of INGERSOLL-RAND INC (IR) is expected to grow by 2.85% in the next year.