TE CONNECTIVITY PLC (TEL) Stock Fundamental Analysis
NYSE:TEL - IE000IVNQZ81 - Common Stock
208.54 USD
+2.56 (+1.24%)
208.54 USD
0 (0%)
We assign a fundamental rating of 7 out of 10 to TEL. TEL was compared to 125 industry peers in the Electronic Equipment, Instruments & Components industry. TEL has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. TEL is not valued too expensively and it also shows a decent growth rate. TEL also has an excellent dividend rating. These ratings could make TEL a good candidate for dividend and quality investing.
1. Profitability
1.1 Basic Checks
In the past year TEL was profitable.
In the past year TEL had a positive cash flow from operations.
Of the past 5 years TEL 4 years were profitable.
Each year in the past 5 years TEL had a positive operating cash flow.
1.2 Ratios
TEL has a Return On Assets of 5.85%. This is in the better half of the industry: TEL outperforms 79.20% of its industry peers.
TEL's Return On Equity of 11.75% is amongst the best of the industry. TEL outperforms 81.60% of its industry peers.
With an excellent Return On Invested Capital value of 13.51%, TEL belongs to the best of the industry, outperforming 91.20% of the companies in the same industry.
TEL had an Average Return On Invested Capital over the past 3 years of 14.05%. This is above the industry average of 9.48%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.85% | ||
| ROE | 11.75% | ||
| ROIC | 13.51% |
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 8.78%. 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 has a better Operating Margin (19.30%) than 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 (34.99%) which is in line with its industry peers.
TEL's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.3% | ||
| PM (TTM) | 8.78% | ||
| GM | 34.99% |
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.
Compared to 1 year ago, TEL has less shares outstanding
The number of shares outstanding for TEL has been reduced compared to 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 4.93. This indicates that TEL is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 4.93, TEL is doing good in the industry, outperforming 73.60% of the companies in the same industry.
TEL has a debt to FCF ratio of 1.98. This is a very positive value and a sign of high solvency as it would only need 1.98 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.98, TEL is in the better half of the industry, outperforming 76.80% of the companies in the same industry.
A Debt/Equity ratio of 0.39 indicates that TEL is not too dependend on debt financing.
The Debt to Equity ratio of TEL (0.39) is worse than 61.60% of its industry peers.
Although TEL does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.39 | ||
| Debt/FCF | 1.98 | ||
| Altman-Z | 4.93 |
ROIC/WACC1.91
WACC7.09%
2.3 Liquidity
TEL has a Current Ratio of 1.52. 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 worse Current ratio (1.52) than 72.00% of its industry peers.
TEL has a Quick Ratio of 1.52. This is a bad value and indicates that TEL is not financially healthy enough and could expect problems in meeting its short term obligations.
TEL has a Quick ratio of 0.96. This is in the lower half of the industry: TEL underperforms 79.20% of its industry peers.
The current and quick ratio evaluation for TEL is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.52 | ||
| Quick Ratio | 0.96 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 11.91% 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.
The Revenue has been growing slightly by 4.86% in the past year.
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)11.91%
EPS 3Y5.06%
EPS 5Y6.41%
EPS Q2Q%18.85%
Revenue 1Y (TTM)4.86%
Revenue growth 3Y2.02%
Revenue growth 5Y3.33%
Sales Q2Q%13.95%
3.2 Future
TEL is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.62% yearly.
TEL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.11% yearly.
EPS Next Y14.84%
EPS Next 2Y13.06%
EPS Next 3Y12.18%
EPS Next 5Y10.62%
Revenue Next Year8.26%
Revenue Next 2Y8.37%
Revenue Next 3Y7.46%
Revenue Next 5Y7.11%
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 accelerating.
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
A Price/Earnings ratio of 25.22 indicates a quite expensive valuation of TEL.
Based on the Price/Earnings ratio, TEL is valued a bit cheaper than the industry average as 69.60% of the companies are valued more expensively.
TEL's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.03.
With a Price/Forward Earnings ratio of 21.58, TEL is valued on the expensive side.
66.40% of the companies in the same industry are more expensive than TEL, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.63, TEL is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.22 | ||
| Fwd PE | 21.58 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TEL is valued a bit cheaper than the industry average as 67.20% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TEL indicates a somewhat cheap valuation: TEL is cheaper than 79.20% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.38 | ||
| EV/EBITDA | 16.55 |
4.3 Compensation for Growth
TEL's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of TEL may justify a higher PE ratio.
TEL's earnings are expected to grow with 12.18% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.7
PEG (5Y)3.93
EPS Next 2Y13.06%
EPS Next 3Y12.18%
5. Dividend
5.1 Amount
TEL has a Yearly Dividend Yield of 1.37%.
Compared to an average industry Dividend Yield of 1.48, TEL pays a better dividend. On top of this TEL pays more dividend than 89.60% of the companies listed in the same industry.
With a Dividend Yield of 1.37, TEL pays less dividend than the S&P500 average, which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.37% |
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 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
54.30% 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, but earnings are growing more, so the dividend growth is sustainable.
DP54.3%
EPS Next 2Y13.06%
EPS Next 3Y12.18%
208.54
+2.56 (+1.24%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)
Earnings (Next)
Inst Owners94.76%
Inst Owner Change-1.29%
Ins Owners0.12%
Ins Owner Change-0.55%
Market Cap61.62B
Analysts79.13
Price Target220.79 (5.87%)
Short Float %1.13%
Short Ratio1.75
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.37% |
Yearly Dividend2.48
Dividend Growth(5Y)6.79%
DP54.3%
Div Incr Years14
Div Non Decr Years17
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.16%
Min EPS beat(2)5.89%
Max EPS beat(2)8.43%
EPS beat(4)3
Avg EPS beat(4)3.94%
Min EPS beat(4)-0.77%
Max EPS beat(4)8.43%
EPS beat(8)7
Avg EPS beat(8)3.12%
EPS beat(12)10
Avg EPS beat(12)2.84%
EPS beat(16)14
Avg EPS beat(16)3.46%
Revenue beat(2)2
Avg Revenue beat(2)3.68%
Min Revenue beat(2)3.34%
Max Revenue beat(2)4.01%
Revenue beat(4)3
Avg Revenue beat(4)1.22%
Min Revenue beat(4)-2.74%
Max Revenue beat(4)4.01%
Revenue beat(8)3
Avg Revenue beat(8)0%
Revenue beat(12)6
Avg Revenue beat(12)0.53%
Revenue beat(16)10
Avg Revenue beat(16)1.01%
PT rev (1m)20.88%
PT rev (3m)32.18%
EPS NQ rev (1m)0.1%
EPS NQ rev (3m)7.3%
EPS NY rev (1m)4.55%
EPS NY rev (3m)4.67%
Revenue NQ rev (1m)0.13%
Revenue NQ rev (3m)7.88%
Revenue NY rev (1m)0.44%
Revenue NY rev (3m)2.54%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.22 | ||
| Fwd PE | 21.58 | ||
| P/S | 3.72 | ||
| P/FCF | 21.38 | ||
| P/OCF | 16.39 | ||
| P/B | 4.98 | ||
| P/tB | 21.67 | ||
| EV/EBITDA | 16.55 |
EPS(TTM)8.27
EY3.97%
EPS(NY)9.66
Fwd EY4.63%
FCF(TTM)9.75
FCFY4.68%
OCF(TTM)12.73
OCFY6.1%
SpS56.12
BVpS41.9
TBVpS9.63
PEG (NY)1.7
PEG (5Y)3.93
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.85% | ||
| ROE | 11.75% | ||
| ROCE | 16.1% | ||
| ROIC | 13.51% | ||
| ROICexc | 13.99% | ||
| ROICexgc | 27.78% | ||
| OM | 19.3% | ||
| PM (TTM) | 8.78% | ||
| GM | 34.99% | ||
| FCFM | 17.38% |
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 Turnover0.67
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.39 | ||
| Debt/FCF | 1.98 | ||
| Debt/EBITDA | 1.2 | ||
| Cap/Depr | 106.3% | ||
| Cap/Sales | 5.3% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 93.39% | ||
| Profit Quality | 198.08% | ||
| Current Ratio | 1.52 | ||
| Quick Ratio | 0.96 | ||
| Altman-Z | 4.93 |
F-Score6
WACC7.09%
ROIC/WACC1.91
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)11.91%
EPS 3Y5.06%
EPS 5Y6.41%
EPS Q2Q%18.85%
EPS Next Y14.84%
EPS Next 2Y13.06%
EPS Next 3Y12.18%
EPS Next 5Y10.62%
Revenue 1Y (TTM)4.86%
Revenue growth 3Y2.02%
Revenue growth 5Y3.33%
Sales Q2Q%13.95%
Revenue Next Year8.26%
Revenue Next 2Y8.37%
Revenue Next 3Y7.46%
Revenue Next 5Y7.11%
EBIT growth 1Y9.33%
EBIT growth 3Y3.4%
EBIT growth 5Y5.71%
EBIT Next Year39.63%
EBIT Next 3Y18.24%
EBIT Next 5Y13.04%
FCF growth 1Y31.72%
FCF growth 3Y12.09%
FCF growth 5Y10.83%
OCF growth 1Y27.98%
OCF growth 3Y9.12%
OCF growth 5Y7.5%