TRANSDIGM GROUP INC (TDG) Stock Fundamental Analysis
NYSE:TDG - New York Stock Exchange, Inc. - US8936411003 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to TDG. TDG was compared to 64 industry peers in the Aerospace & Defense industry. While TDG has a great profitability rating, there are some minor concerns on its financial health. While showing a medium growth rate, TDG is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year TDG was profitable.
TDG had a positive operating cash flow in the past year.
TDG had positive earnings in each of the past 5 years.
Each year in the past 5 years TDG had a positive operating cash flow.
1.2 Ratios
TDG has a Return On Assets of 7.85%. This is amongst the best in the industry. TDG outperforms 84.38% of its industry peers.
Looking at the Return On Invested Capital, with a value of 14.79%, TDG belongs to the top of the industry, outperforming 95.31% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for TDG is above the industry average of 7.94%.
The last Return On Invested Capital (14.79%) for TDG is above the 3 year average (12.09%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.85% | ||
| ROE | N/A | ||
| ROIC | 14.79% |
ROA(3y)5.47%
ROA(5y)4.47%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)12.09%
ROIC(5y)10.39%
1.3 Margins
TDG has a better Profit Margin (20.51%) than 98.44% of its industry peers.
In the last couple of years the Profit Margin of TDG has grown nicely.
TDG's Operating Margin of 47.16% is amongst the best of the industry. TDG outperforms 100.00% of its industry peers.
TDG's Operating Margin has improved in the last couple of years.
The Gross Margin of TDG (60.37%) is better than 92.19% of its industry peers.
TDG's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 47.16% | ||
| PM (TTM) | 20.51% | ||
| GM | 60.37% |
OM growth 3Y7.74%
OM growth 5Y2.75%
PM growth 3Y13.82%
PM growth 5Y4.58%
GM growth 3Y3.98%
GM growth 5Y1.47%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), TDG is creating some value.
TDG has more shares outstanding than it did 1 year ago.
TDG has more shares outstanding than it did 5 years ago.
TDG has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.52 indicates that TDG is not a great score, but indicates only limited risk for bankruptcy at the moment.
TDG has a Altman-Z score (2.52) which is in line with its industry peers.
TDG has a debt to FCF ratio of 13.18. This is a negative value and a sign of low solvency as TDG would need 13.18 years to pay back of all of its debts.
TDG's Debt to FCF ratio of 13.18 is in line compared to the rest of the industry. TDG outperforms 56.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 13.18 | ||
| Altman-Z | 2.52 |
ROIC/WACC1.51
WACC9.82%
2.3 Liquidity
TDG has a Current Ratio of 3.09. This indicates that TDG is financially healthy and has no problem in meeting its short term obligations.
TDG's Current ratio of 3.09 is fine compared to the rest of the industry. TDG outperforms 71.88% of its industry peers.
A Quick Ratio of 2.12 indicates that TDG has no problem at all paying its short term obligations.
The Quick ratio of TDG (2.12) is better than 73.44% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.09 | ||
| Quick Ratio | 2.12 |
3. Growth
3.1 Past
TDG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 17.55%, which is quite good.
The Earnings Per Share has been growing by 12.77% on average over the past years. This is quite good.
TDG shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.84%.
Measured over the past years, TDG shows a quite strong growth in Revenue. The Revenue has been growing by 8.74% on average per year.
EPS 1Y (TTM)17.55%
EPS 3Y40.97%
EPS 5Y12.77%
EPS Q2Q%14.02%
Revenue 1Y (TTM)14.84%
Revenue growth 3Y18.28%
Revenue growth 5Y8.74%
Sales Q2Q%12.04%
3.2 Future
The Earnings Per Share is expected to grow by 9.01% on average over the next years. This is quite good.
Based on estimates for the next years, TDG will show a quite strong growth in Revenue. The Revenue will grow by 9.49% on average per year.
EPS Next Y11.37%
EPS Next 2Y13.37%
EPS Next 3Y13.77%
EPS Next 5Y9.01%
Revenue Next Year11.9%
Revenue Next 2Y10%
Revenue Next 3Y9.1%
Revenue Next 5Y9.49%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 39.28, the valuation of TDG can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of TDG is on the same level as its industry peers.
TDG's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 25.91.
The Price/Forward Earnings ratio is 32.18, which means the current valuation is very expensive for TDG.
The rest of the industry has a similar Price/Forward Earnings ratio as TDG.
TDG's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 21.85.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.28 | ||
| Fwd PE | 32.18 |
4.2 Price Multiples
TDG's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, TDG is valued a bit cheaper than the industry average as 71.88% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.45 | ||
| EV/EBITDA | 23.41 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of TDG may justify a higher PE ratio.
TDG's earnings are expected to grow with 13.77% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.46
PEG (5Y)3.08
EPS Next 2Y13.37%
EPS Next 3Y13.77%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.27%, TDG is a good candidate for dividend investing.
TDG's Dividend Yield is rather good when compared to the industry average which is at 1.34. TDG pays more dividend than 100.00% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, TDG pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.27% |
5.2 History
The dividend of TDG has a limited annual growth rate of 2.56%.
TDG has been paying a dividend for less than 5 years, so it still needs to build a track record.
Dividend Growth(5Y)2.56%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
255.58% of the earnings are spent on dividend by TDG. This is not a sustainable payout ratio.
The dividend of TDG is growing, but earnings are growing more, so the dividend growth is sustainable.
DP255.58%
EPS Next 2Y13.37%
EPS Next 3Y13.77%
1405.15
-2.83 (-0.2%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners95.5%
Inst Owner Change0.98%
Ins Owners0.3%
Ins Owner Change-0.5%
Market Cap78.80B
Analysts82.22
Price Target1479.49 (5.29%)
Short Float %2.4%
Short Ratio4.26
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.27% |
Yearly Dividend36.65
Dividend Growth(5Y)2.56%
DP255.58%
Div Incr Years2
Div Non Decr Years2
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.05%
Min EPS beat(2)0.78%
Max EPS beat(2)1.31%
EPS beat(4)4
Avg EPS beat(4)2.76%
Min EPS beat(4)0.78%
Max EPS beat(4)4.79%
EPS beat(8)8
Avg EPS beat(8)5.76%
EPS beat(12)12
Avg EPS beat(12)6.3%
EPS beat(16)15
Avg EPS beat(16)6.14%
Revenue beat(2)0
Avg Revenue beat(2)-2.03%
Min Revenue beat(2)-2.19%
Max Revenue beat(2)-1.87%
Revenue beat(4)1
Avg Revenue beat(4)-0.86%
Min Revenue beat(4)-2.19%
Max Revenue beat(4)1.04%
Revenue beat(8)4
Avg Revenue beat(8)0.65%
Revenue beat(12)6
Avg Revenue beat(12)0.62%
Revenue beat(16)7
Avg Revenue beat(16)-0.11%
PT rev (1m)-1.58%
PT rev (3m)-2.02%
EPS NQ rev (1m)-0.31%
EPS NQ rev (3m)-0.23%
EPS NY rev (1m)0.12%
EPS NY rev (3m)-0.06%
Revenue NQ rev (1m)-0.26%
Revenue NQ rev (3m)-0.26%
Revenue NY rev (1m)-0.21%
Revenue NY rev (3m)-0.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.28 | ||
| Fwd PE | 32.18 | ||
| P/S | 9.39 | ||
| P/FCF | 41.45 | ||
| P/OCF | 37.88 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 23.41 |
EPS(TTM)35.77
EY2.55%
EPS(NY)43.67
Fwd EY3.11%
FCF(TTM)33.9
FCFY2.41%
OCF(TTM)37.09
OCFY2.64%
SpS149.57
BVpS-101.12
TBVpS-346.79
PEG (NY)3.46
PEG (5Y)3.08
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.85% | ||
| ROE | N/A | ||
| ROCE | 19.95% | ||
| ROIC | 14.79% | ||
| ROICexc | 16.78% | ||
| ROICexgc | 70.82% | ||
| OM | 47.16% | ||
| PM (TTM) | 20.51% | ||
| GM | 60.37% | ||
| FCFM | 22.66% |
ROA(3y)5.47%
ROA(5y)4.47%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)12.09%
ROIC(5y)10.39%
ROICexc(3y)15.91%
ROICexc(5y)13.84%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)16.13%
ROCE(5y)13.86%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y26.62%
ROICexc growth 5Y11.93%
OM growth 3Y7.74%
OM growth 5Y2.75%
PM growth 3Y13.82%
PM growth 5Y4.58%
GM growth 3Y3.98%
GM growth 5Y1.47%
F-Score7
Asset Turnover0.38
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 13.18 | ||
| Debt/EBITDA | 5.8 | ||
| Cap/Depr | 51.44% | ||
| Cap/Sales | 2.13% | ||
| Interest Coverage | 3.27 | ||
| Cash Conversion | 48.33% | ||
| Profit Quality | 110.52% | ||
| Current Ratio | 3.09 | ||
| Quick Ratio | 2.12 | ||
| Altman-Z | 2.52 |
F-Score7
WACC9.82%
ROIC/WACC1.51
Cap/Depr(3y)50.6%
Cap/Depr(5y)46.08%
Cap/Sales(3y)2.13%
Cap/Sales(5y)2.13%
Profit Quality(3y)110.44%
Profit Quality(5y)136%
High Growth Momentum
Growth
EPS 1Y (TTM)17.55%
EPS 3Y40.97%
EPS 5Y12.77%
EPS Q2Q%14.02%
EPS Next Y11.37%
EPS Next 2Y13.37%
EPS Next 3Y13.77%
EPS Next 5Y9.01%
Revenue 1Y (TTM)14.84%
Revenue growth 3Y18.28%
Revenue growth 5Y8.74%
Sales Q2Q%12.04%
Revenue Next Year11.9%
Revenue Next 2Y10%
Revenue Next 3Y9.1%
Revenue Next 5Y9.49%
EBIT growth 1Y18.41%
EBIT growth 3Y27.44%
EBIT growth 5Y11.72%
EBIT Next Year30.64%
EBIT Next 3Y15.73%
EBIT Next 5Y12.99%
FCF growth 1Y97.81%
FCF growth 3Y32.51%
FCF growth 5Y15.52%
OCF growth 1Y91%
OCF growth 3Y30.84%
OCF growth 5Y15.03%