REGAL REXNORD CORP (RRX) Stock Fundamental Analysis
NYSE:RRX - New York Stock Exchange, Inc. - US7587501039 - Common Stock - Currency: USD
RRX gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 95 industry peers in the Electrical Equipment industry. RRX scores excellent on profitability, but there are some minor 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.
In the past year RRX had a positive cash flow from operations.
RRX had positive earnings in 4 of the past 5 years.
In the past 5 years RRX always reported a positive cash flow from operatings.
1.2 Ratios
RRX has a Return On Assets of 1.67%. This is in the better half of the industry: RRX outperforms 73.68% of its industry peers.
The Return On Equity of RRX (3.64%) is better than 76.84% of its industry peers.
Looking at the Return On Invested Capital, with a value of 4.41%, RRX is in the better half of the industry, outperforming 72.63% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for RRX is significantly below the industry average of 10.08%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.67% | ||
| ROE | 3.64% | ||
| ROIC | 4.41% |
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
With a decent Profit Margin value of 3.96%, RRX is doing good in the industry, outperforming 77.89% of the companies in the same industry.
In the last couple of years the Profit Margin of RRX has declined.
With an excellent Operating Margin value of 11.97%, RRX belongs to the best of the industry, outperforming 83.16% of the companies in the same industry.
RRX's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 37.06%, RRX belongs to the top of the industry, outperforming 83.16% of the companies in the same industry.
In the last couple of years the Gross Margin of RRX has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.97% | ||
| PM (TTM) | 3.96% | ||
| GM | 37.06% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so RRX is destroying value.
The number of shares outstanding for RRX remains at a similar level compared to 1 year ago.
RRX has more shares outstanding than it did 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 1.66. This is a bad value and indicates that RRX is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of RRX (1.66) is comparable to the rest of the industry.
RRX has a debt to FCF ratio of 10.17. This is a negative value and a sign of low solvency as RRX would need 10.17 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 10.17, RRX is doing good in the industry, outperforming 65.26% of the companies in the same industry.
RRX has a Debt/Equity ratio of 0.82. This is a neutral value indicating RRX is somewhat dependend on debt financing.
RRX has a worse Debt to Equity ratio (0.82) than 63.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.82 | ||
| Debt/FCF | 10.17 | ||
| Altman-Z | 1.66 |
ROIC/WACC0.59
WACC7.53%
2.3 Liquidity
A Current Ratio of 2.26 indicates that RRX has no problem at all paying its short term obligations.
RRX has a better Current ratio (2.26) than 65.26% of its industry peers.
RRX has a Quick Ratio of 1.21. This is a normal value and indicates that RRX is financially healthy and should not expect problems in meeting its short term obligations.
RRX has a Quick ratio (1.21) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.26 | ||
| Quick Ratio | 1.21 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 3.69% over the past year.
The Earnings Per Share has been growing by 10.44% on average over the past years. This is quite good.
The Revenue for RRX has decreased by -10.19% in the past year. This is quite bad
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)3.69%
EPS 3Y1.35%
EPS 5Y10.44%
EPS Q2Q%7.5%
Revenue 1Y (TTM)-10.19%
Revenue growth 3Y16.56%
Revenue growth 5Y13.26%
Sales Q2Q%-8.37%
3.2 Future
Based on estimates for the next years, RRX will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.79% on average per year.
The Revenue is expected to grow by 1.29% on average over the next years.
EPS Next Y9.06%
EPS Next 2Y12%
EPS Next 3Y11.79%
EPS Next 5YN/A
Revenue Next Year-3.28%
Revenue Next 2Y0.29%
Revenue Next 3Y1.29%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same 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
RRX is valuated correctly with a Price/Earnings ratio of 14.53.
RRX's Price/Earnings ratio is rather cheap when compared to the industry. RRX is cheaper than 86.32% of the companies in the same industry.
RRX's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.03.
With a Price/Forward Earnings ratio of 11.77, the valuation of RRX can be described as very reasonable.
RRX's Price/Forward Earnings ratio is rather cheap when compared to the industry. RRX is cheaper than 87.37% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.94, RRX is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.53 | ||
| Fwd PE | 11.77 |
4.2 Price Multiples
86.32% of the companies in the same industry are more expensive than RRX, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, RRX is valued cheaply inside the industry as 81.05% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.15 | ||
| EV/EBITDA | 11.78 |
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.
PEG (NY)1.6
PEG (5Y)1.39
EPS Next 2Y12%
EPS Next 3Y11.79%
5. Dividend
5.1 Amount
RRX has a Yearly Dividend Yield of 1.00%. Purely for dividend investing, there may be better candidates out there.
RRX's Dividend Yield is rather good when compared to the industry average which is at 4.57. RRX pays more dividend than 86.32% of the companies in the same industry.
With a Dividend Yield of 1.00, RRX pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1% |
5.2 History
The dividend of RRX has a limited annual growth rate of 5.45%.
RRX has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of RRX decreased in the last 3 years.
Dividend Growth(5Y)5.45%
Div Incr Years1
Div Non Decr Years2
5.3 Sustainability
RRX pays out 39.75% of its income as dividend. This is a sustainable payout ratio.
The dividend of RRX is growing, but earnings are growing more, so the dividend growth is sustainable.
DP39.75%
EPS Next 2Y12%
EPS Next 3Y11.79%
134.66
-6.02 (-4.28%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryElectrical Equipment
Earnings (Last)
Earnings (Next)
Inst Owners104.58%
Inst Owner ChangeN/A
Ins Owners0.49%
Ins Owner Change14.93%
Market Cap8.93B
Analysts86.25
Price Target162.92 (20.99%)
Short Float %2.58%
Short Ratio1.92
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1% |
Yearly Dividend1.4
Dividend Growth(5Y)5.45%
DP39.75%
Div Incr Years1
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)4.97%
Min EPS beat(2)-6.13%
Max EPS beat(2)16.06%
EPS beat(4)2
Avg EPS beat(4)3.96%
Min EPS beat(4)-6.13%
Max EPS beat(4)16.06%
EPS beat(8)4
Avg EPS beat(8)0.22%
EPS beat(12)8
Avg EPS beat(12)1.77%
EPS beat(16)10
Avg EPS beat(16)2.32%
Revenue beat(2)1
Avg Revenue beat(2)-0.15%
Min Revenue beat(2)-2.92%
Max Revenue beat(2)2.61%
Revenue beat(4)2
Avg Revenue beat(4)-0.94%
Min Revenue beat(4)-3.82%
Max Revenue beat(4)2.61%
Revenue beat(8)2
Avg Revenue beat(8)-1.68%
Revenue beat(12)3
Avg Revenue beat(12)-1.26%
Revenue beat(16)6
Avg Revenue beat(16)-0.46%
PT rev (1m)-10.45%
PT rev (3m)-19.77%
EPS NQ rev (1m)1.81%
EPS NQ rev (3m)-0.91%
EPS NY rev (1m)2.17%
EPS NY rev (3m)-1.39%
Revenue NQ rev (1m)1.28%
Revenue NQ rev (3m)0.67%
Revenue NY rev (1m)0.8%
Revenue NY rev (3m)-2.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.53 | ||
| Fwd PE | 11.77 | ||
| P/S | 1.51 | ||
| P/FCF | 17.15 | ||
| P/OCF | 14.21 | ||
| P/B | 1.39 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.78 |
EPS(TTM)9.27
EY6.88%
EPS(NY)11.44
Fwd EY8.5%
FCF(TTM)7.85
FCFY5.83%
OCF(TTM)9.48
OCFY7.04%
SpS89.01
BVpS96.83
TBVpS-55.89
PEG (NY)1.6
PEG (5Y)1.39
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.67% | ||
| ROE | 3.64% | ||
| ROCE | 5.51% | ||
| ROIC | 4.41% | ||
| ROICexc | 4.52% | ||
| ROICexgc | 23.76% | ||
| OM | 11.97% | ||
| PM (TTM) | 3.96% | ||
| GM | 37.06% | ||
| FCFM | 8.82% |
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 | 0.82 | ||
| Debt/FCF | 10.17 | ||
| Debt/EBITDA | 4.35 | ||
| Cap/Depr | 21.17% | ||
| Cap/Sales | 1.83% | ||
| Interest Coverage | 1.95 | ||
| Cash Conversion | 51.71% | ||
| Profit Quality | 222.85% | ||
| Current Ratio | 2.26 | ||
| Quick Ratio | 1.21 | ||
| Altman-Z | 1.66 |
F-Score7
WACC7.53%
ROIC/WACC0.59
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)3.69%
EPS 3Y1.35%
EPS 5Y10.44%
EPS Q2Q%7.5%
EPS Next Y9.06%
EPS Next 2Y12%
EPS Next 3Y11.79%
EPS Next 5YN/A
Revenue 1Y (TTM)-10.19%
Revenue growth 3Y16.56%
Revenue growth 5Y13.26%
Sales Q2Q%-8.37%
Revenue Next Year-3.28%
Revenue Next 2Y0.29%
Revenue Next 3Y1.29%
Revenue Next 5YN/A
EBIT growth 1Y0.06%
EBIT growth 3Y20%
EBIT growth 5Y16.07%
EBIT Next Year71.08%
EBIT Next 3Y24.61%
EBIT Next 5YN/A
FCF growth 1Y13.41%
FCF growth 3Y18.14%
FCF growth 5Y9.6%
OCF growth 1Y14.65%
OCF growth 3Y19.43%
OCF growth 5Y8.33%