REGAL REXNORD CORP (RRX) Stock Fundamental Analysis
USA - NYSE:RRX - US7587501039 - Common Stock
143.91 USD
+2.91 (+2.06%)
143.91 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to RRX. RRX was compared to 92 industry peers in the Electrical Equipment industry. While RRX belongs to the best of the industry regarding profitability, there are concerns on its financial health. RRX may be a bit undervalued, certainly considering the very reasonable score on growth
1. Profitability
1.1 Basic Checks
In the past year RRX was profitable.
RRX had a positive operating cash flow in the past year.
RRX had positive earnings in 4 of the past 5 years.
Each year in the past 5 years RRX had a positive operating cash flow.
1.2 Ratios
RRX has a better Return On Assets (1.80%) than 72.83% of its industry peers.
RRX's Return On Equity of 3.74% is fine compared to the rest of the industry. RRX outperforms 71.74% of its industry peers.
The Return On Invested Capital of RRX (4.46%) is better than 71.74% of its industry peers.
The Average Return On Invested Capital over the past 3 years for RRX is below the industry average of 9.86%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.8% | ||
| ROE | 3.74% | ||
| ROIC | 4.46% |
ROA(3y)1.93%
ROA(5y)2.43%
ROE(3y)3.29%
ROE(5y)4.19%
ROIC(3y)4.88%
ROIC(5y)5.01%
1.3 Margins
Looking at the Profit Margin, with a value of 4.28%, RRX is in the better half of the industry, outperforming 78.26% of the companies in the same industry.
In the last couple of years the Profit Margin of RRX has declined.
The Operating Margin of RRX (12.04%) is better than 83.70% of its industry peers.
In the last couple of years the Operating Margin of RRX has grown nicely.
RRX's Gross Margin of 37.23% is amongst the best of the industry. RRX outperforms 83.70% of its industry peers.
In the last couple of years the Gross Margin of RRX has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.04% | ||
| PM (TTM) | 4.28% | ||
| GM | 37.23% |
OM growth 3Y2.96%
OM growth 5Y2.49%
PM growth 3Y-18.59%
PM growth 5Y-15.11%
GM growth 3Y7.59%
GM growth 5Y6.42%
2. Health
2.1 Basic Checks
RRX has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
RRX has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for RRX has been increased compared to 5 years ago.
Compared to 1 year ago, RRX has an improved debt to assets ratio.
2.2 Solvency
RRX has an Altman-Z score of 1.69. This is a bad value and indicates that RRX is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.69, RRX is in line with its industry, outperforming 53.26% of the companies in the same industry.
The Debt to FCF ratio of RRX is 5.47, which is a neutral value as it means it would take RRX, 5.47 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 5.47, RRX is in the better half of the industry, outperforming 73.91% of the companies in the same industry.
RRX has a Debt/Equity ratio of 0.72. This is a neutral value indicating RRX is somewhat dependend on debt financing.
RRX has a worse Debt to Equity ratio (0.72) than 61.96% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | 5.47 | ||
| Altman-Z | 1.69 |
ROIC/WACC0.6
WACC7.42%
2.3 Liquidity
A Current Ratio of 2.00 indicates that RRX should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 2.00, RRX is in line with its industry, outperforming 55.43% of the companies in the same industry.
A Quick Ratio of 0.93 indicates that RRX may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.93, RRX is in line with its industry, outperforming 46.74% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2 | ||
| Quick Ratio | 0.93 |
3. Growth
3.1 Past
RRX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.11%, which is quite good.
The Earnings Per Share has been growing by 10.44% on average over the past years. This is quite good.
The Revenue has decreased by -7.88% in the past year.
RRX shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 13.26% yearly.
EPS 1Y (TTM)9.11%
EPS 3Y1.35%
EPS 5Y10.44%
EPS Q2Q%8.3%
Revenue 1Y (TTM)-7.88%
Revenue growth 3Y16.56%
Revenue growth 5Y13.26%
Sales Q2Q%-3.33%
3.2 Future
The Earnings Per Share is expected to grow by 12.09% on average over the next years. This is quite good.
RRX is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.49% yearly.
EPS Next Y9.87%
EPS Next 2Y12.24%
EPS Next 3Y12.09%
EPS Next 5YN/A
Revenue Next Year-2.65%
Revenue Next 2Y0.58%
Revenue Next 3Y1.49%
Revenue Next 5YN/A
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 15.21, RRX is valued correctly.
Compared to the rest of the industry, the Price/Earnings ratio of RRX indicates a rather cheap valuation: RRX is cheaper than 89.13% of the companies listed in the same industry.
RRX is valuated rather cheaply when we compare the Price/Earnings ratio to 27.32, which is the current average of the S&P500 Index.
RRX is valuated correctly with a Price/Forward Earnings ratio of 12.52.
RRX's Price/Forward Earnings ratio is rather cheap when compared to the industry. RRX is cheaper than 91.30% of the companies in the same industry.
RRX is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.89, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.21 | ||
| Fwd PE | 12.52 |
4.2 Price Multiples
RRX's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. RRX is cheaper than 88.04% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of RRX indicates a rather cheap valuation: RRX is cheaper than 95.65% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.76 | ||
| EV/EBITDA | 11.49 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
RRX has a very decent profitability rating, which may justify a higher PE ratio.
RRX's earnings are expected to grow with 12.09% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.54
PEG (5Y)1.46
EPS Next 2Y12.24%
EPS Next 3Y12.09%
5. Dividend
5.1 Amount
With a yearly dividend of 0.99%, RRX is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.09, RRX pays a better dividend. On top of this RRX pays more dividend than 88.04% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, RRX's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.99% |
5.2 History
The dividend of RRX has a limited annual growth rate of 5.45%.
RRX has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of RRX decreased in the last 3 years.
Dividend Growth(5Y)5.45%
Div Incr Years0
Div Non Decr Years2
5.3 Sustainability
RRX pays out 37.14% of its income as dividend. This is a sustainable payout ratio.
RRX's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP37.14%
EPS Next 2Y12.24%
EPS Next 3Y12.09%
143.91
+2.91 (+2.06%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryElectrical Equipment
Earnings (Last)
Earnings (Next)
Inst Owners108.11%
Inst Owner ChangeN/A
Ins Owners0.51%
Ins Owner Change2.68%
Market Cap9.55B
Analysts83.75
Price Target182.43 (26.77%)
Short Float %4.18%
Short Ratio3.34
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.99% |
Yearly Dividend1.4
Dividend Growth(5Y)5.45%
DP37.14%
Div Incr Years0
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.26%
Min EPS beat(2)0.45%
Max EPS beat(2)16.06%
EPS beat(4)2
Avg EPS beat(4)2.49%
Min EPS beat(4)-6.13%
Max EPS beat(4)16.06%
EPS beat(8)4
Avg EPS beat(8)-0.12%
EPS beat(12)8
Avg EPS beat(12)1.43%
EPS beat(16)10
Avg EPS beat(16)1.74%
Revenue beat(2)1
Avg Revenue beat(2)1.01%
Min Revenue beat(2)-0.59%
Max Revenue beat(2)2.61%
Revenue beat(4)1
Avg Revenue beat(4)-1.18%
Min Revenue beat(4)-3.82%
Max Revenue beat(4)2.61%
Revenue beat(8)2
Avg Revenue beat(8)-1.69%
Revenue beat(12)2
Avg Revenue beat(12)-1.42%
Revenue beat(16)5
Avg Revenue beat(16)-0.88%
PT rev (1m)1.18%
PT rev (3m)12.04%
EPS NQ rev (1m)0.21%
EPS NQ rev (3m)-2.07%
EPS NY rev (1m)0%
EPS NY rev (3m)0.66%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.66%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.21 | ||
| Fwd PE | 12.52 | ||
| P/S | 1.63 | ||
| P/FCF | 10.76 | ||
| P/OCF | 9.61 | ||
| P/B | 1.43 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.49 |
EPS(TTM)9.46
EY6.57%
EPS(NY)11.49
Fwd EY7.98%
FCF(TTM)13.38
FCFY9.3%
OCF(TTM)14.97
OCFY10.4%
SpS88.18
BVpS100.94
TBVpS-52.74
PEG (NY)1.54
PEG (5Y)1.46
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.8% | ||
| ROE | 3.74% | ||
| ROCE | 5.57% | ||
| ROIC | 4.46% | ||
| ROICexc | 4.58% | ||
| ROICexgc | 26.56% | ||
| OM | 12.04% | ||
| PM (TTM) | 4.28% | ||
| GM | 37.23% | ||
| FCFM | 15.17% |
ROA(3y)1.93%
ROA(5y)2.43%
ROE(3y)3.29%
ROE(5y)4.19%
ROIC(3y)4.88%
ROIC(5y)5.01%
ROICexc(3y)5.16%
ROICexc(5y)5.49%
ROICexgc(3y)22.93%
ROICexgc(5y)21.5%
ROCE(3y)6.1%
ROCE(5y)6.26%
ROICexcg growth 3Y16.97%
ROICexcg growth 5Y6%
ROICexc growth 3Y6.15%
ROICexc growth 5Y-9.75%
OM growth 3Y2.96%
OM growth 5Y2.49%
PM growth 3Y-18.59%
PM growth 5Y-15.11%
GM growth 3Y7.59%
GM growth 5Y6.42%
F-Score7
Asset Turnover0.42
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | 5.47 | ||
| Debt/EBITDA | 4.01 | ||
| Cap/Depr | 20.94% | ||
| Cap/Sales | 1.8% | ||
| Interest Coverage | 2.05 | ||
| Cash Conversion | 82.17% | ||
| Profit Quality | 354.59% | ||
| Current Ratio | 2 | ||
| Quick Ratio | 0.93 | ||
| Altman-Z | 1.69 |
F-Score7
WACC7.42%
ROIC/WACC0.6
Cap/Depr(3y)24.27%
Cap/Depr(5y)28.18%
Cap/Sales(3y)1.78%
Cap/Sales(5y)1.68%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)9.11%
EPS 3Y1.35%
EPS 5Y10.44%
EPS Q2Q%8.3%
EPS Next Y9.87%
EPS Next 2Y12.24%
EPS Next 3Y12.09%
EPS Next 5YN/A
Revenue 1Y (TTM)-7.88%
Revenue growth 3Y16.56%
Revenue growth 5Y13.26%
Sales Q2Q%-3.33%
Revenue Next Year-2.65%
Revenue Next 2Y0.58%
Revenue Next 3Y1.49%
Revenue Next 5YN/A
EBIT growth 1Y-2.21%
EBIT growth 3Y20%
EBIT growth 5Y16.07%
EBIT Next Year71.46%
EBIT Next 3Y24.36%
EBIT Next 5YN/A
FCF growth 1Y63.25%
FCF growth 3Y18.14%
FCF growth 5Y9.6%
OCF growth 1Y50.85%
OCF growth 3Y19.43%
OCF growth 5Y8.33%