TORO CO (TTC) Stock Fundamental Analysis
NYSE:TTC - New York Stock Exchange, Inc. - US8910921084 - Common Stock - Currency: USD
Taking everything into account, TTC scores 5 out of 10 in our fundamental rating. TTC was compared to 127 industry peers in the Machinery industry. TTC scores excellent on profitability, but there are some minor concerns on its financial health. TTC has a valuation in line with the averages, but on the other hand it scores bad on growth. TTC also has an excellent dividend rating. These ratings could make TTC a good candidate for dividend investing.
1. Profitability
1.1 Basic Checks
TTC had positive earnings in the past year.
TTC had a positive operating cash flow in the past year.
TTC had positive earnings in each of the past 5 years.
Each year in the past 5 years TTC had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 10.53%, TTC belongs to the top of the industry, outperforming 80.47% of the companies in the same industry.
TTC's Return On Equity of 27.01% is amongst the best of the industry. TTC outperforms 92.19% of its industry peers.
TTC has a better Return On Invested Capital (15.50%) than 87.50% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TTC is significantly above the industry average of 10.78%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.53% | ||
| ROE | 27.01% | ||
| ROIC | 15.5% |
ROA(3y)11.07%
ROA(5y)11.74%
ROE(3y)27.2%
ROE(5y)29.36%
ROIC(3y)17.81%
ROIC(5y)18.34%
1.3 Margins
The Profit Margin of TTC (8.77%) is better than 66.41% of its industry peers.
In the last couple of years the Profit Margin of TTC has remained more or less at the same level.
TTC has a Operating Margin (11.21%) which is comparable to the rest of the industry.
TTC's Operating Margin has improved in the last couple of years.
With a Gross Margin value of 33.53%, TTC perfoms like the industry average, outperforming 57.03% of the companies in the same industry.
In the last couple of years the Gross Margin of TTC has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.21% | ||
| PM (TTM) | 8.77% | ||
| GM | 33.53% |
OM growth 3Y-3.14%
OM growth 5Y2.35%
PM growth 3Y-4.07%
PM growth 5Y0.92%
GM growth 3Y0%
GM growth 5Y0.24%
2. Health
2.1 Basic Checks
TTC has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
TTC has less shares outstanding than it did 1 year ago.
TTC has less shares outstanding than it did 5 years ago.
The debt/assets ratio for TTC has been reduced compared to a year ago.
2.2 Solvency
TTC has an Altman-Z score of 4.37. This indicates that TTC is financially healthy and has little risk of bankruptcy at the moment.
TTC has a Altman-Z score of 4.37. This is in the better half of the industry: TTC outperforms 70.31% of its industry peers.
The Debt to FCF ratio of TTC is 2.41, which is a good value as it means it would take TTC, 2.41 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 2.41, TTC is doing good in the industry, outperforming 71.88% of the companies in the same industry.
A Debt/Equity ratio of 0.73 indicates that TTC is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.73, TTC is doing worse than 70.31% of the companies in the same industry.
Although TTC 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 | 0.73 | ||
| Debt/FCF | 2.41 | ||
| Altman-Z | 4.37 |
ROIC/WACC1.57
WACC9.9%
2.3 Liquidity
A Current Ratio of 1.81 indicates that TTC should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.81, TTC is doing worse than 60.16% of the companies in the same industry.
TTC has a Quick Ratio of 1.81. This is a bad value and indicates that TTC is not financially healthy enough and could expect problems in meeting its short term obligations.
TTC has a worse Quick ratio (0.79) than 76.56% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.81 | ||
| Quick Ratio | 0.79 |
3. Growth
3.1 Past
TTC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13.51%, which is quite good.
The Earnings Per Share has been growing slightly by 6.88% on average over the past years.
The Revenue has been growing slightly by 2.94% in the past year.
TTC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.87% yearly.
EPS 1Y (TTM)13.51%
EPS 3Y4.83%
EPS 5Y6.88%
EPS Q2Q%1.43%
Revenue 1Y (TTM)2.94%
Revenue growth 3Y5%
Revenue growth 5Y7.87%
Sales Q2Q%-2.31%
3.2 Future
The Earnings Per Share is expected to grow by 4.32% on average over the next years.
TTC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.08% yearly.
EPS Next Y2.4%
EPS Next 2Y5.99%
EPS Next 3Y7.1%
EPS Next 5Y4.32%
Revenue Next Year-1.53%
Revenue Next 2Y0.78%
Revenue Next 3Y1.31%
Revenue Next 5Y1.08%
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 decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 17.85, TTC is valued on the expensive side.
72.66% of the companies in the same industry are more expensive than TTC, based on the Price/Earnings ratio.
TTC's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.41.
TTC is valuated correctly with a Price/Forward Earnings ratio of 16.01.
Based on the Price/Forward Earnings ratio, TTC is valued a bit cheaper than 68.75% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 35.19, TTC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.85 | ||
| Fwd PE | 16.01 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TTC is on the same level as its industry peers.
Based on the Price/Free Cash Flow ratio, TTC is valued a bit cheaper than 75.78% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.28 | ||
| EV/EBITDA | 12.99 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of TTC may justify a higher PE ratio.
PEG (NY)7.42
PEG (5Y)2.6
EPS Next 2Y5.99%
EPS Next 3Y7.1%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.00%, TTC has a reasonable but not impressive dividend return.
TTC's Dividend Yield is rather good when compared to the industry average which is at 1.82. TTC pays more dividend than 85.94% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.35, TTC has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2% |
5.2 History
The dividend of TTC is nicely growing with an annual growth rate of 9.97%!
TTC has been paying a dividend for at least 10 years, so it has a reliable track record.
TTC has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)9.97%
Div Incr Years21
Div Non Decr Years34
5.3 Sustainability
37.79% of the earnings are spent on dividend by TTC. This is a low number and sustainable payout ratio.
The dividend of TTC is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP37.79%
EPS Next 2Y5.99%
EPS Next 3Y7.1%
74.99
-0.95 (-1.25%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners93.57%
Inst Owner Change0.28%
Ins Owners0.37%
Ins Owner Change0.83%
Market Cap7.40B
Analysts70
Price Target83.64 (11.53%)
Short Float %2.95%
Short Ratio3.04
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2% |
Yearly Dividend1.46
Dividend Growth(5Y)9.97%
DP37.79%
Div Incr Years21
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.36%
Min EPS beat(2)0.57%
Max EPS beat(2)2.15%
EPS beat(4)2
Avg EPS beat(4)-0.85%
Min EPS beat(4)-4.45%
Max EPS beat(4)2.15%
EPS beat(8)4
Avg EPS beat(8)0.32%
EPS beat(12)8
Avg EPS beat(12)1.22%
EPS beat(16)11
Avg EPS beat(16)2.72%
Revenue beat(2)0
Avg Revenue beat(2)-2.75%
Min Revenue beat(2)-3.52%
Max Revenue beat(2)-1.97%
Revenue beat(4)0
Avg Revenue beat(4)-4.2%
Min Revenue beat(4)-9.05%
Max Revenue beat(4)-1.97%
Revenue beat(8)0
Avg Revenue beat(8)-3.89%
Revenue beat(12)0
Avg Revenue beat(12)-3.72%
Revenue beat(16)1
Avg Revenue beat(16)-3.18%
PT rev (1m)-8.64%
PT rev (3m)-10.38%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.7%
EPS NY rev (1m)-1.75%
EPS NY rev (3m)-1.67%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.43%
Revenue NY rev (1m)-1.85%
Revenue NY rev (3m)-1.8%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.85 | ||
| Fwd PE | 16.01 | ||
| P/S | 1.63 | ||
| P/FCF | 16.28 | ||
| P/OCF | 13.27 | ||
| P/B | 5.01 | ||
| P/tB | 13.74 | ||
| EV/EBITDA | 12.99 |
EPS(TTM)4.2
EY5.6%
EPS(NY)4.68
Fwd EY6.25%
FCF(TTM)4.61
FCFY6.14%
OCF(TTM)5.65
OCFY7.54%
SpS46.06
BVpS14.96
TBVpS5.46
PEG (NY)7.42
PEG (5Y)2.6
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.53% | ||
| ROE | 27.01% | ||
| ROCE | 18.9% | ||
| ROIC | 15.5% | ||
| ROICexc | 16.58% | ||
| ROICexgc | 26.42% | ||
| OM | 11.21% | ||
| PM (TTM) | 8.77% | ||
| GM | 33.53% | ||
| FCFM | 10% |
ROA(3y)11.07%
ROA(5y)11.74%
ROE(3y)27.2%
ROE(5y)29.36%
ROIC(3y)17.81%
ROIC(5y)18.34%
ROICexc(3y)19.24%
ROICexc(5y)21.37%
ROICexgc(3y)34.38%
ROICexgc(5y)41.9%
ROCE(3y)21.71%
ROCE(5y)22.37%
ROICexcg growth 3Y-18.45%
ROICexcg growth 5Y-4.48%
ROICexc growth 3Y-11.36%
ROICexc growth 5Y-0.63%
OM growth 3Y-3.14%
OM growth 5Y2.35%
PM growth 3Y-4.07%
PM growth 5Y0.92%
GM growth 3Y0%
GM growth 5Y0.24%
F-Score6
Asset Turnover1.2
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.73 | ||
| Debt/FCF | 2.41 | ||
| Debt/EBITDA | 1.68 | ||
| Cap/Depr | 78.84% | ||
| Cap/Sales | 2.27% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 87.09% | ||
| Profit Quality | 114.02% | ||
| Current Ratio | 1.81 | ||
| Quick Ratio | 0.79 | ||
| Altman-Z | 4.37 |
F-Score6
WACC9.9%
ROIC/WACC1.57
Cap/Depr(3y)115.09%
Cap/Depr(5y)111.81%
Cap/Sales(3y)2.97%
Cap/Sales(5y)2.9%
Profit Quality(3y)63.97%
Profit Quality(5y)87.06%
High Growth Momentum
Growth
EPS 1Y (TTM)13.51%
EPS 3Y4.83%
EPS 5Y6.88%
EPS Q2Q%1.43%
EPS Next Y2.4%
EPS Next 2Y5.99%
EPS Next 3Y7.1%
EPS Next 5Y4.32%
Revenue 1Y (TTM)2.94%
Revenue growth 3Y5%
Revenue growth 5Y7.87%
Sales Q2Q%-2.31%
Revenue Next Year-1.53%
Revenue Next 2Y0.78%
Revenue Next 3Y1.31%
Revenue Next 5Y1.08%
EBIT growth 1Y1.34%
EBIT growth 3Y1.7%
EBIT growth 5Y10.41%
EBIT Next Year27.91%
EBIT Next 3Y13.9%
EBIT Next 5YN/A
FCF growth 1Y246.74%
FCF growth 3Y3.15%
FCF growth 5Y13.75%
OCF growth 1Y76.58%
OCF growth 3Y0.86%
OCF growth 5Y11.05%