Overall OTIS gets a fundamental rating of 4 out of 10. We evaluated OTIS against 132 industry peers in the Machinery industry. OTIS scores excellent on profitability, but there are concerns on its financial health. OTIS is valued correctly, but it does not seem to be growing.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

OTIS had positive earnings in the past year.
In the past year OTIS had a positive cash flow from operations.
OTIS had positive earnings in 4 of the past 5 years.
Of the past 5 years OTIS 4 years had a positive operating cash flow.

1.2 Ratios

Looking at the Return On Assets, with a value of 12.51%, OTIS belongs to the top of the industry, outperforming 89.39% of the companies in the same industry.
OTIS has a better Return On Invested Capital (49.12%) than 100.00% of its industry peers.
OTIS had an Average Return On Invested Capital over the past 3 years of 50.77%. This is significantly above the industry average of 10.20%.

		Industry Rank	Sector Rank
ROA	12.51%
ROE	N/A
ROIC	49.12%

ROA(3y)13.73%

ROA(5y)11.96%

ROE(3y)N/A

ROE(5y)N/A

ROIC(3y)50.77%

ROIC(5y)42.31%

1.3 Margins

OTIS's Profit Margin of 9.41% is fine compared to the rest of the industry. OTIS outperforms 70.45% of its industry peers.
OTIS's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 17.53%, OTIS belongs to the best of the industry, outperforming 82.58% of the companies in the same industry.
OTIS's Operating Margin has improved in the last couple of years.
OTIS has a Gross Margin of 30.01%. This is comparable to the rest of the industry: OTIS outperforms 47.73% of its industry peers.
In the last couple of years the Gross Margin of OTIS has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	17.53%
PM (TTM)	9.41%
GM	30.01%

OM growth 3Y1.53%

OM growth 5Y1.94%

PM growth 3Y9.8%

PM growth 5Y6.28%

GM growth 3Y0.59%

GM growth 5Y0.47%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

OTIS has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
There is no outstanding debt for OTIS. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.

2.2 Solvency

An Altman-Z score of 3.25 indicates that OTIS is not in any danger for bankruptcy at the moment.
OTIS's Altman-Z score of 3.25 is in line compared to the rest of the industry. OTIS outperforms 53.79% of its industry peers.
The Debt to FCF ratio of OTIS is 6.11, which is on the high side as it means it would take OTIS, 6.11 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 6.11, OTIS is in line with its industry, outperforming 49.24% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	N/A
Debt/FCF	6.11
Altman-Z	3.25

ROIC/WACC5.47

WACC8.98%

2.3 Liquidity

OTIS has a Current Ratio of 0.94. This is a bad value and indicates that OTIS is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.94, OTIS is doing worse than 88.64% of the companies in the same industry.
A Quick Ratio of 0.85 indicates that OTIS may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.85, OTIS is doing worse than 74.24% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	0.94
Quick Ratio	0.85

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

OTIS shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.74%.
Measured over the past years, OTIS shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.04% on average per year.

EPS 1Y (TTM)5.74%

EPS 3Y8.4%

EPS 5Y10.04%

EPS Q2Q%10.75%

Revenue 1Y (TTM)N/A

Revenue growth 3YN/A

Revenue growth 5YN/A

Sales Q2Q%3.29%

3.2 Future

The Earnings Per Share is expected to grow by 9.67% on average over the next years. This is quite good.
The Revenue is expected to grow by 3.03% on average over the next years.

EPS Next Y12.35%

EPS Next 2Y11.64%

EPS Next 3Y12.82%

EPS Next 5Y9.67%

Revenue Next Year5.14%

Revenue Next 2Y5.03%

Revenue Next 3Y5.68%

Revenue Next 5Y3.03%

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 stable.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 21.09 indicates a rather expensive valuation of OTIS.
OTIS's Price/Earnings ratio is a bit cheaper when compared to the industry. OTIS is cheaper than 71.97% of the companies in the same industry.
When comparing the Price/Earnings ratio of OTIS to the average of the S&P500 Index (28.30), we can say OTIS is valued slightly cheaper.
The Price/Forward Earnings ratio is 18.77, which indicates a rather expensive current valuation of OTIS.
Based on the Price/Forward Earnings ratio, OTIS is valued a bit cheaper than 64.39% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of OTIS to the average of the S&P500 Index (25.57), we can say OTIS is valued slightly cheaper.

		Industry Rank	Sector Rank
PE	21.09
Fwd PE	18.77

4.2 Price Multiples

OTIS's Enterprise Value to EBITDA is on the same level as the industry average.
OTIS's Price/Free Cash Flow ratio is in line with the industry average.

		Industry Rank	Sector Rank
P/FCF	25.16
EV/EBITDA	15.21

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
OTIS has a very decent profitability rating, which may justify a higher PE ratio.
OTIS's earnings are expected to grow with 12.82% in the coming years. This may justify a more expensive valuation.

PEG (NY)1.71

PEG (5Y)2.1

EPS Next 2Y11.64%

EPS Next 3Y12.82%

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5. Dividend

5.1 Amount

OTIS has a Yearly Dividend Yield of 1.90%.
Compared to an average industry Dividend Yield of 1.02, OTIS pays a better dividend. On top of this OTIS pays more dividend than 84.85% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 1.82, OTIS has a dividend comparable with the average S&P500 company.

		Industry Rank	Sector Rank
Dividend Yield	1.9%

5.2 History

OTIS has been paying a dividend for over 5 years, so it has already some track record.
OTIS has not decreased its dividend in the last 3 years.

Dividend Growth(5Y)N/A

Div Incr Years4

Div Non Decr Years4

5.3 Sustainability

OTIS pays out 47.44% of its income as dividend. This is a bit on the high side, but may be sustainable.

DP47.44%

EPS Next 2Y11.64%

EPS Next 3Y12.82%

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OTIS WORLDWIDE CORP / OTIS FAQ

Can you provide the ChartMill fundamental rating for OTIS WORLDWIDE CORP?

ChartMill assigns a fundamental rating of 4 / 10 to OTIS.

What is the valuation status for OTIS stock?

ChartMill assigns a valuation rating of 4 / 10 to OTIS WORLDWIDE CORP (OTIS). This can be considered as Fairly Valued.

What is the profitability of OTIS stock?

OTIS WORLDWIDE CORP (OTIS) has a profitability rating of 7 / 10.

Can you provide the PE and PB ratios for OTIS stock?

The Price/Earnings (PE) ratio for OTIS WORLDWIDE CORP (OTIS) is 21.09 and the Price/Book (PB) ratio is -6.14.

How financially healthy is OTIS WORLDWIDE CORP?

The financial health rating of OTIS WORLDWIDE CORP (OTIS) is 3 / 10.