PENTAIR PLC (PNR) Stock Fundamental Analysis
NYSE:PNR - New York Stock Exchange, Inc. - IE00BLS09M33 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to PNR. PNR was compared to 128 industry peers in the Machinery industry. Both the health and profitability get an excellent rating, making PNR a very profitable company, without any liquidiy or solvency issues. PNR is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
PNR had positive earnings in the past year.
In the past year PNR had a positive cash flow from operations.
In the past 5 years PNR has always been profitable.
PNR had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
PNR has a better Return On Assets (9.59%) than 78.91% of its industry peers.
PNR's Return On Equity of 17.81% is fine compared to the rest of the industry. PNR outperforms 76.56% of its industry peers.
With an excellent Return On Invested Capital value of 13.81%, PNR belongs to the best of the industry, outperforming 82.03% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for PNR is in line with the industry average of 10.71%.
The last Return On Invested Capital (13.81%) for PNR is above the 3 year average (12.28%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.59% | ||
| ROE | 17.81% | ||
| ROIC | 13.81% |
ROA(3y)8.88%
ROA(5y)9.37%
ROE(3y)18.22%
ROE(5y)18.91%
ROIC(3y)12.28%
ROIC(5y)12.85%
1.3 Margins
PNR's Profit Margin of 15.87% is amongst the best of the industry. PNR outperforms 89.84% of its industry peers.
PNR's Profit Margin has improved in the last couple of years.
PNR has a Operating Margin of 22.71%. This is amongst the best in the industry. PNR outperforms 94.53% of its industry peers.
In the last couple of years the Operating Margin of PNR has grown nicely.
PNR's Gross Margin of 40.73% is fine compared to the rest of the industry. PNR outperforms 75.78% of its industry peers.
In the last couple of years the Gross Margin of PNR has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.71% | ||
| PM (TTM) | 15.87% | ||
| GM | 40.73% |
OM growth 3Y8.65%
OM growth 5Y8.02%
PM growth 3Y1.41%
PM growth 5Y4.95%
GM growth 3Y4.71%
GM growth 5Y2.5%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so PNR is still creating some value.
The number of shares outstanding for PNR has been reduced compared to 1 year ago.
The number of shares outstanding for PNR has been reduced compared to 5 years ago.
Compared to 1 year ago, PNR has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.96 indicates that PNR is not in any danger for bankruptcy at the moment.
PNR has a better Altman-Z score (4.96) than 76.56% of its industry peers.
The Debt to FCF ratio of PNR is 2.40, which is a good value as it means it would take PNR, 2.40 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 2.40, PNR is doing good in the industry, outperforming 72.66% of the companies in the same industry.
A Debt/Equity ratio of 0.51 indicates that PNR is somewhat dependend on debt financing.
PNR's Debt to Equity ratio of 0.51 is in line compared to the rest of the industry. PNR outperforms 43.75% of its industry peers.
Although PNR does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.51 | ||
| Debt/FCF | 2.4 | ||
| Altman-Z | 4.96 |
ROIC/WACC1.53
WACC9.02%
2.3 Liquidity
PNR has a Current Ratio of 1.89. This is a normal value and indicates that PNR is financially healthy and should not expect problems in meeting its short term obligations.
PNR has a Current ratio (1.89) which is comparable to the rest of the industry.
PNR has a Quick Ratio of 1.22. This is a normal value and indicates that PNR is financially healthy and should not expect problems in meeting its short term obligations.
PNR has a Quick ratio (1.22) which is comparable to the rest of the industry.
The current and quick ratio evaluation for PNR is rather negative, while it does have 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 | 1.89 | ||
| Quick Ratio | 1.22 |
3. Growth
3.1 Past
PNR shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 19.58%, which is quite good.
The Earnings Per Share has been growing by 12.72% on average over the past years. This is quite good.
The Revenue has decreased by -0.42% in the past year.
PNR shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.66% yearly.
EPS 1Y (TTM)19.58%
EPS 3Y8.29%
EPS 5Y12.72%
EPS Q2Q%20.21%
Revenue 1Y (TTM)-0.42%
Revenue growth 3Y2.74%
Revenue growth 5Y6.66%
Sales Q2Q%-0.67%
3.2 Future
PNR is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.01% yearly.
The Revenue is expected to grow by 3.90% on average over the next years.
EPS Next Y10.65%
EPS Next 2Y10.42%
EPS Next 3Y9.66%
EPS Next 5Y9.01%
Revenue Next Year1.16%
Revenue Next 2Y2.62%
Revenue Next 3Y3.19%
Revenue Next 5Y3.9%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last 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 22.71 indicates a rather expensive valuation of PNR.
PNR's Price/Earnings ratio is in line with the industry average.
PNR is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.15, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 19.45, which indicates a rather expensive current valuation of PNR.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PNR is on the same level as its industry peers.
PNR's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.60.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.71 | ||
| Fwd PE | 19.45 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PNR is on the same level as its industry peers.
PNR's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.12 | ||
| EV/EBITDA | 17.86 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PNR has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.13
PEG (5Y)1.79
EPS Next 2Y10.42%
EPS Next 3Y9.66%
5. Dividend
5.1 Amount
With a yearly dividend of 0.97%, PNR is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.88, PNR has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.42, PNR's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.97% |
5.2 History
The dividend of PNR has a limited annual growth rate of 4.97%.
PNR has been paying a dividend for at least 10 years, so it has a reliable track record.
As PNR did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)4.97%
Div Incr Years5
Div Non Decr Years5
5.3 Sustainability
PNR pays out 24.03% of its income as dividend. This is a sustainable payout ratio.
PNR's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP24.03%
EPS Next 2Y10.42%
EPS Next 3Y9.66%
102.66
-0.92 (-0.89%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners95.05%
Inst Owner Change0.86%
Ins Owners0.82%
Ins Owner Change15.36%
Market Cap16.89B
Analysts80
Price Target107.81 (5.02%)
Short Float %1.77%
Short Ratio1.96
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.97% |
Yearly Dividend0.92
Dividend Growth(5Y)4.97%
DP24.03%
Div Incr Years5
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.39%
Min EPS beat(2)6.19%
Max EPS beat(2)10.6%
EPS beat(4)4
Avg EPS beat(4)5.79%
Min EPS beat(4)0.73%
Max EPS beat(4)10.6%
EPS beat(8)7
Avg EPS beat(8)4.99%
EPS beat(12)11
Avg EPS beat(12)5.59%
EPS beat(16)15
Avg EPS beat(16)5.15%
Revenue beat(2)1
Avg Revenue beat(2)0.11%
Min Revenue beat(2)-0.94%
Max Revenue beat(2)1.16%
Revenue beat(4)1
Avg Revenue beat(4)-0.23%
Min Revenue beat(4)-0.94%
Max Revenue beat(4)1.16%
Revenue beat(8)4
Avg Revenue beat(8)0.16%
Revenue beat(12)8
Avg Revenue beat(12)0.32%
Revenue beat(16)12
Avg Revenue beat(16)0.97%
PT rev (1m)3.25%
PT rev (3m)-7.4%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.56%
EPS NY rev (1m)0.1%
EPS NY rev (3m)-0.22%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)-0.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.71 | ||
| Fwd PE | 19.45 | ||
| P/S | 4.14 | ||
| P/FCF | 22.12 | ||
| P/OCF | 20.22 | ||
| P/B | 4.65 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.86 |
EPS(TTM)4.52
EY4.4%
EPS(NY)5.28
Fwd EY5.14%
FCF(TTM)4.64
FCFY4.52%
OCF(TTM)5.08
OCFY4.95%
SpS24.77
BVpS22.08
TBVpS-4.25
PEG (NY)2.13
PEG (5Y)1.79
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.59% | ||
| ROE | 17.81% | ||
| ROCE | 15.86% | ||
| ROIC | 13.81% | ||
| ROICexc | 14.15% | ||
| ROICexgc | 59.19% | ||
| OM | 22.71% | ||
| PM (TTM) | 15.87% | ||
| GM | 40.73% | ||
| FCFM | 18.73% |
ROA(3y)8.88%
ROA(5y)9.37%
ROE(3y)18.22%
ROE(5y)18.91%
ROIC(3y)12.28%
ROIC(5y)12.85%
ROICexc(3y)12.58%
ROICexc(5y)13.17%
ROICexgc(3y)64.09%
ROICexgc(5y)68.53%
ROCE(3y)14.11%
ROCE(5y)14.77%
ROICexcg growth 3Y-5.5%
ROICexcg growth 5Y5.36%
ROICexc growth 3Y-2.61%
ROICexc growth 5Y4.34%
OM growth 3Y8.65%
OM growth 5Y8.02%
PM growth 3Y1.41%
PM growth 5Y4.95%
GM growth 3Y4.71%
GM growth 5Y2.5%
F-Score7
Asset Turnover0.6
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.51 | ||
| Debt/FCF | 2.4 | ||
| Debt/EBITDA | 1.76 | ||
| Cap/Depr | 62.41% | ||
| Cap/Sales | 1.76% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 80.27% | ||
| Profit Quality | 118.01% | ||
| Current Ratio | 1.89 | ||
| Quick Ratio | 1.22 | ||
| Altman-Z | 4.96 |
F-Score7
WACC9.02%
ROIC/WACC1.53
Cap/Depr(3y)70.35%
Cap/Depr(5y)74.31%
Cap/Sales(3y)1.91%
Cap/Sales(5y)1.88%
Profit Quality(3y)85.25%
Profit Quality(5y)99.67%
High Growth Momentum
Growth
EPS 1Y (TTM)19.58%
EPS 3Y8.29%
EPS 5Y12.72%
EPS Q2Q%20.21%
EPS Next Y10.65%
EPS Next 2Y10.42%
EPS Next 3Y9.66%
EPS Next 5Y9.01%
Revenue 1Y (TTM)-0.42%
Revenue growth 3Y2.74%
Revenue growth 5Y6.66%
Sales Q2Q%-0.67%
Revenue Next Year1.16%
Revenue Next 2Y2.62%
Revenue Next 3Y3.19%
Revenue Next 5Y3.9%
EBIT growth 1Y16.5%
EBIT growth 3Y11.63%
EBIT growth 5Y15.22%
EBIT Next Year18.23%
EBIT Next 3Y11.14%
EBIT Next 5Y9.17%
FCF growth 1Y151.07%
FCF growth 3Y7.78%
FCF growth 5Y18.64%
OCF growth 1Y115.2%
OCF growth 3Y7.73%
OCF growth 5Y16.78%