TE CONNECTIVITY PLC (TEL) Stock Fundamental Analysis
NYSE:TEL - New York Stock Exchange, Inc. - IE000IVNQZ81 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to TEL. TEL was compared to 125 industry peers in the Electronic Equipment, Instruments & Components industry. TEL has an excellent profitability rating, but there are some minor concerns on its financial health. TEL is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year TEL was profitable.
TEL had a positive operating cash flow in the past year.
Of the past 5 years TEL 4 years were profitable.
TEL had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
TEL has a better Return On Assets (5.88%) than 78.40% of its industry peers.
TEL has a better Return On Equity (11.50%) than 81.60% of its industry peers.
Looking at the Return On Invested Capital, with a value of 14.59%, TEL belongs to the top of the industry, outperforming 92.00% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for TEL is above the industry average of 9.29%.
The last Return On Invested Capital (14.59%) for TEL is above the 3 year average (14.05%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.88% | ||
| ROE | 11.5% | ||
| ROIC | 14.59% |
ROA(3y)11.48%
ROA(5y)8.75%
ROE(3y)21.62%
ROE(5y)16.71%
ROIC(3y)14.05%
ROIC(5y)12.99%
1.3 Margins
TEL has a Profit Margin of 8.67%. This is amongst the best in the industry. TEL outperforms 80.80% of its industry peers.
In the last couple of years the Profit Margin of TEL has grown nicely.
TEL's Operating Margin of 19.14% is amongst the best of the industry. TEL outperforms 96.80% of its industry peers.
In the last couple of years the Operating Margin of TEL has grown nicely.
TEL has a Gross Margin (34.87%) which is comparable to the rest of the industry.
TEL's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.14% | ||
| PM (TTM) | 8.67% | ||
| GM | 34.87% |
OM growth 3Y1.36%
OM growth 5Y2.3%
PM growth 3Y9.97%
PM growth 5Y8%
GM growth 3Y1.69%
GM growth 5Y1.05%
2. Health
2.1 Basic Checks
TEL has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, TEL has less shares outstanding
TEL has less shares outstanding than it did 5 years ago.
The debt/assets ratio for TEL has been reduced compared to a year ago.
2.2 Solvency
TEL has an Altman-Z score of 4.47. This indicates that TEL is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.47, TEL is in the better half of the industry, outperforming 73.60% of the companies in the same industry.
The Debt to FCF ratio of TEL is 2.02, which is a good value as it means it would take TEL, 2.02 years of fcf income to pay off all of its debts.
TEL has a better Debt to FCF ratio (2.02) than 76.00% of its industry peers.
TEL has a Debt/Equity ratio of 0.27. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of TEL (0.27) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.27 | ||
| Debt/FCF | 2.02 | ||
| Altman-Z | 4.47 |
ROIC/WACC2.04
WACC7.16%
2.3 Liquidity
A Current Ratio of 1.51 indicates that TEL should not have too much problems paying its short term obligations.
The Current ratio of TEL (1.51) is worse than 72.00% of its industry peers.
A Quick Ratio of 1.08 indicates that TEL should not have too much problems paying its short term obligations.
TEL's Quick ratio of 1.08 is on the low side compared to the rest of the industry. TEL is outperformed by 73.60% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.51 | ||
| Quick Ratio | 1.08 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 9.10% over the past year.
TEL shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.41% yearly.
TEL shows a small growth in Revenue. In the last year, the Revenue has grown by 1.23%.
Measured over the past years, TEL shows a small growth in Revenue. The Revenue has been growing by 3.33% on average per year.
EPS 1Y (TTM)9.1%
EPS 3Y5.06%
EPS 5Y6.41%
EPS Q2Q%12.9%
Revenue 1Y (TTM)1.23%
Revenue growth 3Y2.02%
Revenue growth 5Y3.33%
Sales Q2Q%4.44%
3.2 Future
Based on estimates for the next years, TEL will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.08% on average per year.
Based on estimates for the next years, TEL will show a small growth in Revenue. The Revenue will grow by 5.70% on average per year.
EPS Next Y9.72%
EPS Next 2Y9.52%
EPS Next 3Y9.69%
EPS Next 5Y8.08%
Revenue Next Year5.58%
Revenue Next 2Y6.39%
Revenue Next 3Y6.16%
Revenue Next 5Y5.7%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 20.09 indicates a rather expensive valuation of TEL.
Based on the Price/Earnings ratio, TEL is valued a bit cheaper than the industry average as 70.40% of the companies are valued more expensively.
TEL's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.91.
The Price/Forward Earnings ratio is 17.52, which indicates a rather expensive current valuation of TEL.
TEL's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. TEL is cheaper than 69.60% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of TEL to the average of the S&P500 Index (21.85), we can say TEL is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.09 | ||
| Fwd PE | 17.52 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TEL is valued a bit cheaper than the industry average as 69.60% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TEL indicates a rather cheap valuation: TEL is cheaper than 80.80% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.94 | ||
| EV/EBITDA | 12.96 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates TEL does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of TEL may justify a higher PE ratio.
PEG (NY)2.07
PEG (5Y)3.13
EPS Next 2Y9.52%
EPS Next 3Y9.69%
5. Dividend
5.1 Amount
TEL has a Yearly Dividend Yield of 1.74%.
Compared to an average industry Dividend Yield of 2.07, TEL pays a better dividend. On top of this TEL pays more dividend than 91.20% of the companies listed in the same industry.
Compared to the average S&P500 Dividend Yield of 2.36, TEL is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.74% |
5.2 History
On average, the dividend of TEL grows each year by 6.79%, which is quite nice.
TEL has paid a dividend for at least 10 years, which is a reliable track record.
TEL has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)6.79%
Div Incr Years14
Div Non Decr Years17
5.3 Sustainability
TEL pays out 55.90% of its income as dividend. This is a bit on the high side, but may be sustainable.
TEL's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP55.9%
EPS Next 2Y9.52%
EPS Next 3Y9.69%
158.91
-0.6 (-0.38%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)
Earnings (Next)
Inst Owners92.28%
Inst Owner Change1.29%
Ins Owners0.12%
Ins Owner Change3.94%
Market Cap47.12B
Analysts76.67
Price Target167.03 (5.11%)
Short Float %1.61%
Short Ratio2.31
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.74% |
Yearly Dividend2.48
Dividend Growth(5Y)6.79%
DP55.9%
Div Incr Years14
Div Non Decr Years17
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.04%
Min EPS beat(2)2.19%
Max EPS beat(2)5.89%
EPS beat(4)3
Avg EPS beat(4)2.25%
Min EPS beat(4)-0.77%
Max EPS beat(4)5.89%
EPS beat(8)7
Avg EPS beat(8)2.76%
EPS beat(12)10
Avg EPS beat(12)2.59%
EPS beat(16)14
Avg EPS beat(16)3.68%
Revenue beat(2)1
Avg Revenue beat(2)0.3%
Min Revenue beat(2)-2.74%
Max Revenue beat(2)3.34%
Revenue beat(4)2
Avg Revenue beat(4)-0.27%
Min Revenue beat(4)-2.74%
Max Revenue beat(4)3.34%
Revenue beat(8)2
Avg Revenue beat(8)-0.77%
Revenue beat(12)6
Avg Revenue beat(12)0.53%
Revenue beat(16)10
Avg Revenue beat(16)0.88%
PT rev (1m)-5.11%
PT rev (3m)-4.73%
EPS NQ rev (1m)1.17%
EPS NQ rev (3m)0.49%
EPS NY rev (1m)2.09%
EPS NY rev (3m)1.53%
Revenue NQ rev (1m)4.25%
Revenue NQ rev (3m)4.48%
Revenue NY rev (1m)2.89%
Revenue NY rev (3m)3.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.09 | ||
| Fwd PE | 17.52 | ||
| P/S | 2.94 | ||
| P/FCF | 16.94 | ||
| P/OCF | 13.17 | ||
| P/B | 3.9 | ||
| P/tB | 9.38 | ||
| EV/EBITDA | 12.96 |
EPS(TTM)7.91
EY4.98%
EPS(NY)9.07
Fwd EY5.71%
FCF(TTM)9.38
FCFY5.9%
OCF(TTM)12.07
OCFY7.59%
SpS54.04
BVpS40.75
TBVpS16.94
PEG (NY)2.07
PEG (5Y)3.13
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.88% | ||
| ROE | 11.5% | ||
| ROCE | 17.38% | ||
| ROIC | 14.59% | ||
| ROICexc | 17.05% | ||
| ROICexgc | 32.03% | ||
| OM | 19.14% | ||
| PM (TTM) | 8.67% | ||
| GM | 34.87% | ||
| FCFM | 17.36% |
ROA(3y)11.48%
ROA(5y)8.75%
ROE(3y)21.62%
ROE(5y)16.71%
ROIC(3y)14.05%
ROIC(5y)12.99%
ROICexc(3y)15.24%
ROICexc(5y)14.04%
ROICexgc(3y)26.54%
ROICexgc(5y)25.01%
ROCE(3y)16.74%
ROCE(5y)15.48%
ROICexcg growth 3Y-1.57%
ROICexcg growth 5Y1.2%
ROICexc growth 3Y0.91%
ROICexc growth 5Y3.66%
OM growth 3Y1.36%
OM growth 5Y2.3%
PM growth 3Y9.97%
PM growth 5Y8%
GM growth 3Y1.69%
GM growth 5Y1.05%
F-Score6
Asset Turnover0.68
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.27 | ||
| Debt/FCF | 2.02 | ||
| Debt/EBITDA | 0.84 | ||
| Cap/Depr | 97.43% | ||
| Cap/Sales | 4.97% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 92.1% | ||
| Profit Quality | 200.14% | ||
| Current Ratio | 1.51 | ||
| Quick Ratio | 1.08 | ||
| Altman-Z | 4.47 |
F-Score6
WACC7.16%
ROIC/WACC2.04
Cap/Depr(3y)90.78%
Cap/Depr(5y)88.17%
Cap/Sales(3y)4.52%
Cap/Sales(5y)4.56%
Profit Quality(3y)94.42%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)9.1%
EPS 3Y5.06%
EPS 5Y6.41%
EPS Q2Q%12.9%
EPS Next Y9.72%
EPS Next 2Y9.52%
EPS Next 3Y9.69%
EPS Next 5Y8.08%
Revenue 1Y (TTM)1.23%
Revenue growth 3Y2.02%
Revenue growth 5Y3.33%
Sales Q2Q%4.44%
Revenue Next Year5.58%
Revenue Next 2Y6.39%
Revenue Next 3Y6.16%
Revenue Next 5Y5.7%
EBIT growth 1Y7.54%
EBIT growth 3Y3.4%
EBIT growth 5Y5.71%
EBIT Next Year30.48%
EBIT Next 3Y14.12%
EBIT Next 5Y10.8%
FCF growth 1Y42.74%
FCF growth 3Y12.09%
FCF growth 5Y10.83%
OCF growth 1Y30.72%
OCF growth 3Y9.12%
OCF growth 5Y7.5%