TE CONNECTIVITY PLC (TEL) Stock Fundamental Analysis
NYSE:TEL - New York Stock Exchange, Inc. - IE000IVNQZ81 - Common Stock - Currency: USD
TEL gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 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 has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
TEL had positive earnings in the past year.
TEL had a positive operating cash flow in the past year.
Of the past 5 years TEL 4 years were profitable.
In the past 5 years TEL always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 5.88%, TEL is doing good in the industry, outperforming 77.60% of the companies in the same industry.
TEL has a better Return On Equity (11.50%) than 81.60% of its industry peers.
The Return On Invested Capital of TEL (14.59%) is better than 91.20% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TEL is above the industry average of 9.30%.
The 3 year average ROIC (14.05%) for TEL is below the current ROIC(14.59%), indicating increased profibility in the last year.
| 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
The Profit Margin of TEL (8.67%) is better than 80.80% of its industry peers.
In the last couple of years the Profit Margin of TEL has grown nicely.
TEL has a better Operating Margin (19.14%) than 96.80% of its industry peers.
TEL's Operating Margin has improved in the last couple of years.
TEL has a Gross Margin of 34.87%. This is comparable to the rest of the industry: TEL outperforms 59.20% of its industry peers.
In the last couple of years the Gross Margin of TEL has remained more or less at the same level.
| 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), TEL is creating value.
TEL has less shares outstanding than it did 1 year ago.
The number of shares outstanding for TEL has been reduced compared to 5 years ago.
TEL has a better debt/assets ratio than last year.
2.2 Solvency
TEL has an Altman-Z score of 4.28. This indicates that TEL is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 4.28, TEL is doing good in 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.
With a decent Debt to FCF ratio value of 2.02, TEL is doing good in the industry, outperforming 76.00% of the companies in the same industry.
A Debt/Equity ratio of 0.27 indicates that TEL is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.27, TEL is in line with its industry, outperforming 43.20% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.27 | ||
| Debt/FCF | 2.02 | ||
| Altman-Z | 4.28 |
ROIC/WACC2.05
WACC7.13%
2.3 Liquidity
TEL has a Current Ratio of 1.51. This is a normal value and indicates that TEL is financially healthy and should not expect problems in meeting its short term obligations.
TEL has a Current ratio of 1.51. This is in the lower half of the industry: TEL underperforms 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 has a Quick ratio of 1.08. This is in the lower half of the industry: TEL underperforms 75.20% 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 12.33% over the past year.
The Earnings Per Share has been growing slightly by 6.41% on average over the past years.
The Revenue has been growing slightly by 1.23% in the past year.
TEL shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.33% yearly.
EPS 1Y (TTM)12.33%
EPS 3Y5.06%
EPS 5Y6.41%
EPS Q2Q%-97.53%
Revenue 1Y (TTM)1.23%
Revenue growth 3Y2.02%
Revenue growth 5Y3.33%
Sales Q2Q%4.44%
3.2 Future
The Earnings Per Share is expected to grow by 8.08% on average over the next years. This is quite good.
TEL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.70% yearly.
EPS Next Y7.48%
EPS Next 2Y8.9%
EPS Next 3Y9.38%
EPS Next 5Y8.08%
Revenue Next Year2.65%
Revenue Next 2Y4.76%
Revenue Next 3Y5.18%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 19.36, which indicates a rather expensive current valuation of TEL.
TEL's Price/Earnings ratio is a bit cheaper when compared to the industry. TEL is cheaper than 71.20% of the companies in the same industry.
TEL is valuated rather cheaply when we compare the Price/Earnings ratio to 27.85, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 16.32, the valuation of TEL can be described as correct.
71.20% of the companies in the same industry are more expensive than TEL, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of TEL to the average of the S&P500 Index (20.77), we can say TEL is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.36 | ||
| Fwd PE | 16.32 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TEL indicates a somewhat cheap valuation: TEL is cheaper than 72.80% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, TEL is valued cheaper than 80.80% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.7 | ||
| EV/EBITDA | 12.03 |
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.
TEL has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.59
PEG (5Y)3.02
EPS Next 2Y8.9%
EPS Next 3Y9.38%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.96%, TEL has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.25, TEL pays a better dividend. On top of this TEL pays more dividend than 92.00% of the companies listed in the same industry.
TEL's Dividend Yield is slightly below the S&P500 average, which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.96% |
5.2 History
The dividend of TEL is nicely growing with an annual growth rate of 6.79%!
TEL has paid a dividend for at least 10 years, which is a reliable track record.
TEL has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)6.79%
Div Incr Years14
Div Non Decr Years17
5.3 Sustainability
55.90% of the earnings are spent on dividend by TEL. This is a bit on the high side, but may be sustainable.
The dividend of TEL is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP55.9%
EPS Next 2Y8.9%
EPS Next 3Y9.38%
146.36
-0.02 (-0.01%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)
Earnings (Next)
Inst Owners92.28%
Inst Owner Change0.82%
Ins Owners0.12%
Ins Owner Change4.58%
Market Cap43.67B
Analysts75.2
Price Target166.33 (13.64%)
Short Float %1.7%
Short Ratio2.47
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.96% |
Yearly Dividend2.48
Dividend Growth(5Y)6.79%
DP55.9%
Div Incr Years14
Div Non Decr Years17
Ex-Date
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
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)-5.51%
PT rev (3m)-3.84%
EPS NQ rev (1m)-0.6%
EPS NQ rev (3m)-2.27%
EPS NY rev (1m)-0.24%
EPS NY rev (3m)-0.71%
Revenue NQ rev (1m)0.19%
Revenue NQ rev (3m)-2.42%
Revenue NY rev (1m)0.09%
Revenue NY rev (3m)-1.45%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.36 | ||
| Fwd PE | 16.32 | ||
| P/S | 2.72 | ||
| P/FCF | 15.7 | ||
| P/OCF | 12.2 | ||
| P/B | 3.61 | ||
| P/tB | 8.69 | ||
| EV/EBITDA | 12.03 |
EPS(TTM)7.56
EY5.17%
EPS(NY)8.97
Fwd EY6.13%
FCF(TTM)9.32
FCFY6.37%
OCF(TTM)12
OCFY8.2%
SpS53.72
BVpS40.51
TBVpS16.84
PEG (NY)2.59
PEG (5Y)3.02
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 | 4.28 |
F-Score6
WACC7.13%
ROIC/WACC2.05
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)12.33%
EPS 3Y5.06%
EPS 5Y6.41%
EPS Q2Q%-97.53%
EPS Next Y7.48%
EPS Next 2Y8.9%
EPS Next 3Y9.38%
EPS Next 5Y8.08%
Revenue 1Y (TTM)1.23%
Revenue growth 3Y2.02%
Revenue growth 5Y3.33%
Sales Q2Q%4.44%
Revenue Next Year2.65%
Revenue Next 2Y4.76%
Revenue Next 3Y5.18%
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%