TE CONNECTIVITY PLC (TEL) Stock Fundamental Analysis
USA - NYSE:TEL - IE000IVNQZ81 - Common Stock
242.42 USD
-0.08 (-0.03%)
244.79 USD
+2.37 (+0.98%)
We assign a fundamental rating of 7 out of 10 to TEL. TEL was compared to 123 industry peers in the Electronic Equipment, Instruments & Components industry. Both the health and profitability get an excellent rating, making TEL a very profitable company, without any liquidiy or solvency issues. TEL is not valued too expensively and it also shows a decent growth rate. Finally 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.
TEL had a positive operating cash flow in the past year.
Each year in the past 5 years TEL has been profitable.
Each year in the past 5 years TEL had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.34%, TEL belongs to the top of the industry, outperforming 86.18% of the companies in the same industry.
TEL has a Return On Equity of 14.64%. This is amongst the best in the industry. TEL outperforms 82.11% of its industry peers.
TEL has a Return On Invested Capital of 13.39%. This is amongst the best in the industry. TEL outperforms 90.24% of its industry peers.
TEL had an Average Return On Invested Capital over the past 3 years of 12.89%. This is above the industry average of 9.53%.
The 3 year average ROIC (12.89%) for TEL is below the current ROIC(13.39%), indicating increased profibility in the last year.
| 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
With an excellent Profit Margin value of 10.67%, TEL belongs to the best of the industry, outperforming 84.55% of the companies in the same industry.
In the last couple of years the Profit Margin of TEL has declined.
TEL has a better Operating Margin (19.60%) than 95.94% of its industry peers.
In the last couple of years the Operating Margin of TEL has grown nicely.
TEL has a Gross Margin (35.22%) which is in line with its industry peers.
In the last couple of years the Gross Margin of TEL has grown nicely.
| 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.
The number of shares outstanding for TEL has been reduced compared to 5 years ago.
TEL has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 5.49 indicates that TEL is not in any danger for bankruptcy at the moment.
The Altman-Z score of TEL (5.49) is better than 73.98% of its industry peers.
The Debt to FCF ratio of TEL is 1.78, which is an excellent value as it means it would take TEL, only 1.78 years of fcf income to pay off all of its debts.
TEL has a better Debt to FCF ratio (1.78) than 78.05% of its industry peers.
A Debt/Equity ratio of 0.38 indicates that TEL is not too dependend on debt financing.
TEL has a Debt to Equity ratio of 0.38. This is in the lower half of the industry: TEL underperforms 65.04% 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 | 0.38 | ||
| Debt/FCF | 1.78 | ||
| Altman-Z | 5.49 |
ROIC/WACC1.88
WACC7.13%
2.3 Liquidity
TEL has a Current Ratio of 1.56. This is a normal value and indicates that TEL is financially healthy and should not expect problems in meeting its short term obligations.
TEL's Current ratio of 1.56 is on the low side compared to the rest of the industry. TEL is outperformed by 72.36% 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.
TEL has a Quick ratio of 1.03. This is in the lower half of the industry: TEL underperforms 76.42% of its industry peers.
TEL does not score too well on the current and quick ratio evaluation. However, as it has 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.
TEL shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.56% yearly.
Looking at the last year, TEL shows a quite strong growth in Revenue. The Revenue has grown by 8.94% in the last year.
Measured over the past years, TEL shows a small growth in Revenue. The Revenue has been growing by 7.24% on average per year.
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
TEL is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.20% yearly.
TEL is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.90% yearly.
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
The EPS growth rate is stable: in the next years the growth will be about the same 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
TEL is valuated quite expensively with a Price/Earnings ratio of 27.67.
Compared to the rest of the industry, the Price/Earnings ratio of TEL indicates a somewhat cheap valuation: TEL is cheaper than 65.85% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 26.06. TEL is around the same levels.
Based on the Price/Forward Earnings ratio of 22.93, the valuation of TEL can be described as rather expensive.
Based on the Price/Forward Earnings ratio, TEL is valued a bit cheaper than 64.23% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of TEL to the average of the S&P500 Index (32.73), we can say TEL is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.67 | ||
| Fwd PE | 22.93 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TEL is valued a bit cheaper than 65.04% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, TEL is valued cheaply inside the industry as 80.49% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.36 | ||
| EV/EBITDA | 18.02 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
TEL has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as TEL's earnings are expected to grow with 14.96% in the coming years.
PEG (NY)1.34
PEG (5Y)1.78
EPS Next 2Y15.73%
EPS Next 3Y14.96%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.17%, TEL has a reasonable but not impressive dividend return.
TEL's Dividend Yield is rather good when compared to the industry average which is at 2.14. TEL pays more dividend than 86.99% of the companies in the same industry.
With a Dividend Yield of 1.17, TEL pays less dividend than the S&P500 average, which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.17% |
5.2 History
On average, the dividend of TEL grows each year by 7.56%, 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)7.56%
Div Incr Years14
Div Non Decr Years17
5.3 Sustainability
43.59% of the earnings are spent on dividend by TEL. 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%
242.42
-0.08 (-0.03%)
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-1.35%
Ins Owners0.12%
Ins Owner Change-1.26%
Market Cap71.63B
Revenue(TTM)17.26B
Net Income(TTM)1.84B
Analysts79.2
Price Target234.14 (-3.42%)
Short Float %1.37%
Short Ratio2.47
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.17% |
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)3.54%
PT rev (3m)7.33%
EPS NQ rev (1m)18%
EPS NQ rev (3m)18.73%
EPS NY rev (1m)9.43%
EPS NY rev (3m)16.33%
Revenue NQ rev (1m)4.34%
Revenue NQ rev (3m)4.89%
Revenue NY rev (1m)2.34%
Revenue NY rev (3m)3.27%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.67 | ||
| Fwd PE | 22.93 | ||
| P/S | 4.15 | ||
| P/FCF | 22.36 | ||
| P/OCF | 17.31 | ||
| P/B | 5.69 | ||
| P/tB | 22.16 | ||
| EV/EBITDA | 18.02 |
EPS(TTM)8.76
EY3.61%
EPS(NY)10.57
Fwd EY4.36%
FCF(TTM)10.84
FCFY4.47%
OCF(TTM)14.01
OCFY5.78%
SpS58.42
BVpS42.59
TBVpS10.94
PEG (NY)1.34
PEG (5Y)1.78
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 | 5.49 |
F-Score5
WACC7.13%
ROIC/WACC1.88
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 27.67 and the Price/Book (PB) ratio is 5.69.
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.