TE CONNECTIVITY PLC (TEL) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TEL - IE000IVNQZ81 - Common Stock
226.15 USD
+1.42 (+0.63%)
226 USD
-0.15 (-0.07%)
TEL gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 124 industry peers in the Electronic Equipment, Instruments & Components industry. TEL scores excellent points on both the profitability and health parts. This is a solid base for a good stock. TEL has a correct valuation and a medium growth rate. TEL also has an excellent dividend rating. These ratings would make TEL suitable for dividend and quality investing!
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.
TEL had positive earnings in each of the past 5 years.
In the past 5 years TEL always reported a positive cash flow from operatings.
1.2 Ratios
TEL has a better Return On Assets (7.34%) than 84.55% of its industry peers.
TEL has a Return On Equity of 14.64%. This is amongst the best in the industry. TEL outperforms 81.30% of its industry peers.
The Return On Invested Capital of TEL (13.39%) is better than 91.06% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TEL is above the industry average of 9.11%.
The last Return On Invested Capital (13.39%) for TEL is above the 3 year average (12.89%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.34% | ||
| ROE | 14.64% | ||
| ROIC | 13.39% |
ROA(3y)10.04%
ROA(5y)10.47%
ROE(3y)19.01%
ROE(5y)20.15%
ROIC(3y)12.89%
ROIC(5y)13.15%
1.3 Margins
TEL has a Profit Margin of 10.67%. This is amongst the best in the industry. TEL outperforms 82.93% of its industry peers.
In the last couple of years the Profit Margin of TEL has declined.
Looking at the Operating Margin, with a value of 19.60%, TEL belongs to the top of the industry, outperforming 96.75% of the companies in the same industry.
In the last couple of years the Operating Margin of TEL has grown nicely.
Looking at the Gross Margin, with a value of 35.22%, TEL is in line with its industry, outperforming 55.28% of the companies in the same industry.
TEL's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.6% | ||
| PM (TTM) | 10.67% | ||
| GM | 35.22% |
OM growth 3Y2.75%
OM growth 5Y6.64%
PM growth 3Y-10.56%
PM growth 5YN/A
GM growth 3Y3.02%
GM growth 5Y2.79%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), TEL is creating value.
The number of shares outstanding for TEL has been reduced compared to 1 year ago.
Compared to 5 years ago, TEL has less shares outstanding
The debt/assets ratio for TEL is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 5.24 indicates that TEL is not in any danger for bankruptcy at the moment.
TEL has a better Altman-Z score (5.24) than 74.80% of its industry peers.
TEL has a debt to FCF ratio of 1.78. This is a very positive value and a sign of high solvency as it would only need 1.78 years to pay back of all of its debts.
TEL has a better Debt to FCF ratio (1.78) than 78.86% of its industry peers.
TEL has a Debt/Equity ratio of 0.38. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.38, TEL is doing worse than 64.23% of the companies in the same industry.
Even though the debt/equity ratio score it not favorable for TEL, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | 1.78 | ||
| Altman-Z | 5.24 |
ROIC/WACC1.91
WACC7.03%
2.3 Liquidity
A Current Ratio of 1.56 indicates that TEL should not have too much problems paying its short term obligations.
TEL has a worse Current ratio (1.56) than 73.17% of its industry peers.
TEL has a Quick Ratio of 1.03. This is a normal value and indicates that TEL is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.03, TEL is not doing good in the industry: 75.61% of the companies in the same industry are doing better.
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 | 1.56 | ||
| Quick Ratio | 1.03 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 15.87% over the past year.
Measured over the past years, TEL shows a quite strong growth in Earnings Per Share. The EPS has been growing by 15.56% on average per year.
Looking at the last year, TEL shows a quite strong growth in Revenue. The Revenue has grown by 8.94% in the last year.
The Revenue has been growing slightly by 7.24% on average over the past years.
EPS 1Y (TTM)15.87%
EPS 3Y6.22%
EPS 5Y15.56%
EPS Q2Q%25.13%
Revenue 1Y (TTM)8.94%
Revenue growth 3Y1.97%
Revenue growth 5Y7.24%
Sales Q2Q%16.74%
3.2 Future
The Earnings Per Share is expected to grow by 14.20% on average over the next years. This is quite good.
The Revenue is expected to grow by 8.90% on average over the next years. This is quite good.
EPS Next Y20.69%
EPS Next 2Y15.73%
EPS Next 3Y14.96%
EPS Next 5Y14.2%
Revenue Next Year11.27%
Revenue Next 2Y9.01%
Revenue Next 3Y8.69%
Revenue Next 5Y8.9%
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 stable.
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 25.82, which means the current valuation is very expensive for TEL.
67.48% of the companies in the same industry are more expensive than TEL, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 26.31, TEL is valued at the same level.
A Price/Forward Earnings ratio of 21.39 indicates a rather expensive valuation of TEL.
TEL's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. TEL is cheaper than 65.85% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 36.59. TEL is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.82 | ||
| Fwd PE | 21.39 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TEL is valued a bit cheaper than 64.23% of the companies in the same industry.
79.67% of the companies in the same industry are more expensive than TEL, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.86 | ||
| EV/EBITDA | 16.78 |
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 14.96% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.25
PEG (5Y)1.66
EPS Next 2Y15.73%
EPS Next 3Y14.96%
5. Dividend
5.1 Amount
TEL has a Yearly Dividend Yield of 1.26%.
TEL's Dividend Yield is rather good when compared to the industry average which is at 2.33. TEL pays more dividend than 89.43% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, TEL's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.26% |
5.2 History
The dividend of TEL is nicely growing with an annual growth rate of 7.56%!
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)7.56%
Div Incr Years14
Div Non Decr Years17
5.3 Sustainability
TEL pays out 43.59% of its income as dividend. This is a bit on the high side, but may be sustainable.
TEL's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP43.59%
EPS Next 2Y15.73%
EPS Next 3Y14.96%
226.15
+1.42 (+0.63%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)
Earnings (Next)
Inst Owners95.21%
Inst Owner Change-2.14%
Ins Owners0.12%
Ins Owner Change-2.62%
Market Cap66.53B
Revenue(TTM)17.26B
Net Income(TTM)1.84B
Analysts79.2
Price Target268.9 (18.9%)
Short Float %1.14%
Short Ratio1.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.26% |
Yearly Dividend2.7
Dividend Growth(5Y)7.56%
DP43.59%
Div Incr Years14
Div Non Decr Years17
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.07%
Min EPS beat(2)5.72%
Max EPS beat(2)8.43%
EPS beat(4)4
Avg EPS beat(4)5.56%
Min EPS beat(4)2.19%
Max EPS beat(4)8.43%
EPS beat(8)7
Avg EPS beat(8)3.79%
EPS beat(12)11
Avg EPS beat(12)3.34%
EPS beat(16)14
Avg EPS beat(16)3.67%
Revenue beat(2)2
Avg Revenue beat(2)3.29%
Min Revenue beat(2)2.57%
Max Revenue beat(2)4.01%
Revenue beat(4)3
Avg Revenue beat(4)1.8%
Min Revenue beat(4)-2.74%
Max Revenue beat(4)4.01%
Revenue beat(8)4
Avg Revenue beat(8)0.37%
Revenue beat(12)6
Avg Revenue beat(12)0.54%
Revenue beat(16)10
Avg Revenue beat(16)1.17%
PT rev (1m)18.91%
PT rev (3m)21.79%
EPS NQ rev (1m)16.7%
EPS NQ rev (3m)17.78%
EPS NY rev (1m)8.38%
EPS NY rev (3m)9.39%
Revenue NQ rev (1m)4.11%
Revenue NQ rev (3m)4.28%
Revenue NY rev (1m)2.16%
Revenue NY rev (3m)2.64%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.82 | ||
| Fwd PE | 21.39 | ||
| P/S | 3.87 | ||
| P/FCF | 20.86 | ||
| P/OCF | 16.14 | ||
| P/B | 5.31 | ||
| P/tB | 20.68 | ||
| EV/EBITDA | 16.78 |
EPS(TTM)8.76
EY3.87%
EPS(NY)10.57
Fwd EY4.67%
FCF(TTM)10.84
FCFY4.79%
OCF(TTM)14.01
OCFY6.19%
SpS58.42
BVpS42.59
TBVpS10.94
PEG (NY)1.25
PEG (5Y)1.66
Graham Number91.62
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.34% | ||
| ROE | 14.64% | ||
| ROCE | 16.95% | ||
| ROIC | 13.39% | ||
| ROICexc | 14.29% | ||
| ROICexgc | 28.58% | ||
| OM | 19.6% | ||
| PM (TTM) | 10.67% | ||
| GM | 35.22% | ||
| FCFM | 18.56% |
ROA(3y)10.04%
ROA(5y)10.47%
ROE(3y)19.01%
ROE(5y)20.15%
ROIC(3y)12.89%
ROIC(5y)13.15%
ROICexc(3y)13.97%
ROICexc(5y)14.2%
ROICexgc(3y)25.41%
ROICexgc(5y)25.74%
ROCE(3y)16.32%
ROCE(5y)16.64%
ROICexgc growth 3Y1.55%
ROICexgc growth 5Y10.25%
ROICexc growth 3Y-2.52%
ROICexc growth 5Y8.84%
OM growth 3Y2.75%
OM growth 5Y6.64%
PM growth 3Y-10.56%
PM growth 5YN/A
GM growth 3Y3.02%
GM growth 5Y2.79%
F-Score5
Asset Turnover0.69
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | 1.78 | ||
| Debt/EBITDA | 1.15 | ||
| Cap/Depr | 111.7% | ||
| Cap/Sales | 5.42% | ||
| Interest Coverage | 99.53 | ||
| Cash Conversion | 98.03% | ||
| Profit Quality | 173.89% | ||
| Current Ratio | 1.56 | ||
| Quick Ratio | 1.03 | ||
| Altman-Z | 5.24 |
F-Score5
WACC7.03%
ROIC/WACC1.91
Cap/Depr(3y)95.4%
Cap/Depr(5y)94.75%
Cap/Sales(3y)4.76%
Cap/Sales(5y)4.72%
Profit Quality(3y)129.05%
Profit Quality(5y)109%
High Growth Momentum
Growth
EPS 1Y (TTM)15.87%
EPS 3Y6.22%
EPS 5Y15.56%
EPS Q2Q%25.13%
EPS Next Y20.69%
EPS Next 2Y15.73%
EPS Next 3Y14.96%
EPS Next 5Y14.2%
Revenue 1Y (TTM)8.94%
Revenue growth 3Y1.97%
Revenue growth 5Y7.24%
Sales Q2Q%16.74%
Revenue Next Year11.27%
Revenue Next 2Y9.01%
Revenue Next 3Y8.69%
Revenue Next 5Y8.9%
EBIT growth 1Y13.44%
EBIT growth 3Y4.78%
EBIT growth 5Y14.36%
EBIT Next Year38.9%
EBIT Next 3Y20.67%
EBIT Next 5Y16.38%
FCF growth 1Y14.52%
FCF growth 3Y23.51%
FCF growth 5Y17.47%
OCF growth 1Y19.04%
OCF growth 3Y18.81%
OCF growth 5Y15.75%
TE CONNECTIVITY PLC / TEL FAQ
Can you provide the ChartMill fundamental rating for TE CONNECTIVITY PLC?
ChartMill assigns a fundamental rating of 7 / 10 to TEL.
What is the valuation status of TE CONNECTIVITY PLC (TEL) stock?
ChartMill assigns a valuation rating of 5 / 10 to TE CONNECTIVITY PLC (TEL). This can be considered as Fairly Valued.
Can you provide the profitability details for TE CONNECTIVITY PLC?
TE CONNECTIVITY PLC (TEL) has a profitability rating of 8 / 10.
Can you provide the PE and PB ratios for TEL stock?
The Price/Earnings (PE) ratio for TE CONNECTIVITY PLC (TEL) is 25.82 and the Price/Book (PB) ratio is 5.31.
Can you provide the expected EPS growth for TEL stock?
The Earnings per Share (EPS) of TE CONNECTIVITY PLC (TEL) is expected to grow by 20.69% in the next year.