TORO CO (TTC) Stock Fundamental Analysis
USA - NYSE:TTC - US8910921084 - Common Stock
74.65 USD
+1.71 (+2.34%)
75 USD
+0.35 (+0.47%)
Overall TTC gets a fundamental rating of 6 out of 10. We evaluated TTC against 129 industry peers in the Machinery industry. While TTC has a great profitability rating, there are some minor concerns on its financial health. TTC has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year TTC was profitable.
In the past year TTC had a positive cash flow from operations.
Each year in the past 5 years TTC has been profitable.
TTC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
TTC's Return On Assets of 9.46% is fine compared to the rest of the industry. TTC outperforms 78.29% of its industry peers.
With an excellent Return On Equity value of 23.60%, TTC belongs to the best of the industry, outperforming 89.15% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 16.23%, TTC belongs to the top of the industry, outperforming 90.70% of the companies in the same industry.
TTC had an Average Return On Invested Capital over the past 3 years of 17.81%. This is significantly above the industry average of 10.01%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.46% | ||
| ROE | 23.6% | ||
| ROIC | 16.23% |
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
Looking at the Profit Margin, with a value of 7.37%, TTC is in the better half of the industry, outperforming 60.47% of the companies in the same industry.
TTC's Profit Margin has been stable in the last couple of years.
TTC has a Operating Margin (11.23%) which is in line with its industry peers.
In the last couple of years the Operating Margin of TTC has grown nicely.
TTC has a Gross Margin (33.25%) which is in line with its industry peers.
TTC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.23% | ||
| PM (TTM) | 7.37% | ||
| GM | 33.25% |
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), TTC is creating value.
Compared to 1 year ago, TTC has less shares outstanding
The number of shares outstanding for TTC has been reduced compared to 5 years ago.
Compared to 1 year ago, TTC has an improved debt to assets ratio.
2.2 Solvency
TTC has an Altman-Z score of 4.66. This indicates that TTC is financially healthy and has little risk of bankruptcy at the moment.
TTC has a better Altman-Z score (4.66) than 73.64% of its industry peers.
TTC has a debt to FCF ratio of 2.10. This is a good value and a sign of high solvency as TTC would need 2.10 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 2.10, TTC is doing good in the industry, outperforming 77.52% of the companies in the same industry.
A Debt/Equity ratio of 0.72 indicates that TTC is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.72, TTC is doing worse than 70.54% 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 | 0.72 | ||
| Debt/FCF | 2.1 | ||
| Altman-Z | 4.66 |
ROIC/WACC1.71
WACC9.5%
2.3 Liquidity
A Current Ratio of 1.88 indicates that TTC should not have too much problems paying its short term obligations.
TTC has a Current ratio (1.88) which is comparable to the rest of the industry.
A Quick Ratio of 0.79 indicates that TTC may have some problems paying its short term obligations.
TTC has a worse Quick ratio (0.79) than 77.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.88 | ||
| Quick Ratio | 0.79 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 8.40% over the past year.
The Earnings Per Share has been growing slightly by 6.88% on average over the past years.
TTC shows a small growth in Revenue. In the last year, the Revenue has grown by 0.65%.
The Revenue has been growing slightly by 7.87% on average over the past years.
EPS 1Y (TTM)8.4%
EPS 3Y4.83%
EPS 5Y6.88%
EPS Q2Q%5.08%
Revenue 1Y (TTM)0.65%
Revenue growth 3Y5%
Revenue growth 5Y7.87%
Sales Q2Q%-2.21%
3.2 Future
TTC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.88% yearly.
The Revenue is expected to grow by 1.38% on average over the next years.
EPS Next Y1.29%
EPS Next 2Y6.56%
EPS Next 3Y7.67%
EPS Next 5Y4.88%
Revenue Next Year-2.37%
Revenue Next 2Y0.59%
Revenue Next 3Y1.43%
Revenue Next 5Y1.38%
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
TTC is valuated rather expensively with a Price/Earnings ratio of 17.52.
TTC's Price/Earnings ratio is a bit cheaper when compared to the industry. TTC is cheaper than 72.87% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.50. TTC is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 15.77, TTC is valued correctly.
TTC's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. TTC is cheaper than 69.77% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of TTC to the average of the S&P500 Index (22.99), we can say TTC is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.52 | ||
| Fwd PE | 15.77 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TTC indicates a somewhat cheap valuation: TTC is cheaper than 60.47% of the companies listed in the same industry.
81.40% of the companies in the same industry are more expensive than TTC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.85 | ||
| EV/EBITDA | 12.72 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates TTC does not grow enough to justify the current Price/Earnings ratio.
TTC has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)13.58
PEG (5Y)2.55
EPS Next 2Y6.56%
EPS Next 3Y7.67%
5. Dividend
5.1 Amount
TTC has a Yearly Dividend Yield of 2.05%. Purely for dividend investing, there may be better candidates out there.
TTC's Dividend Yield is rather good when compared to the industry average which is at 1.81. TTC pays more dividend than 86.05% of the companies in the same industry.
TTC's Dividend Yield is comparable with the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.05% |
5.2 History
On average, the dividend of TTC grows each year by 9.97%, which is quite nice.
TTC has been paying a dividend for at least 10 years, so it has a reliable track record.
TTC has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)9.97%
Div Incr Years21
Div Non Decr Years34
5.3 Sustainability
TTC pays out 45.26% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of TTC is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP45.26%
EPS Next 2Y6.56%
EPS Next 3Y7.67%
74.65
+1.71 (+2.34%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners93.18%
Inst Owner Change0.05%
Ins Owners0.39%
Ins Owner Change1.32%
Market Cap7.31B
Analysts74
Price Target94.45 (26.52%)
Short Float %3%
Short Ratio3.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.05% |
Yearly Dividend1.46
Dividend Growth(5Y)9.97%
DP45.26%
Div Incr Years21
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)0.7%
Min EPS beat(2)0.57%
Max EPS beat(2)0.84%
EPS beat(4)3
Avg EPS beat(4)0.47%
Min EPS beat(4)-1.66%
Max EPS beat(4)2.15%
EPS beat(8)5
Avg EPS beat(8)3.45%
EPS beat(12)8
Avg EPS beat(12)0.9%
EPS beat(16)11
Avg EPS beat(16)1.59%
Revenue beat(2)0
Avg Revenue beat(2)-3.5%
Min Revenue beat(2)-3.52%
Max Revenue beat(2)-3.47%
Revenue beat(4)0
Avg Revenue beat(4)-2.81%
Min Revenue beat(4)-3.52%
Max Revenue beat(4)-1.97%
Revenue beat(8)0
Avg Revenue beat(8)-2.76%
Revenue beat(12)0
Avg Revenue beat(12)-3.78%
Revenue beat(16)0
Avg Revenue beat(16)-3.48%
PT rev (1m)4.04%
PT rev (3m)12.93%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-11.14%
EPS NY rev (1m)-1.09%
EPS NY rev (3m)-1.09%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.22%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.85%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.52 | ||
| Fwd PE | 15.77 | ||
| P/S | 1.62 | ||
| P/FCF | 14.85 | ||
| P/OCF | 12.4 | ||
| P/B | 5.18 | ||
| P/tB | 13.01 | ||
| EV/EBITDA | 12.72 |
EPS(TTM)4.26
EY5.71%
EPS(NY)4.73
Fwd EY6.34%
FCF(TTM)5.03
FCFY6.74%
OCF(TTM)6.02
OCFY8.06%
SpS46.19
BVpS14.42
TBVpS5.74
PEG (NY)13.58
PEG (5Y)2.55
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.46% | ||
| ROE | 23.6% | ||
| ROCE | 19.79% | ||
| ROIC | 16.23% | ||
| ROICexc | 17.61% | ||
| ROICexgc | 27.5% | ||
| OM | 11.23% | ||
| PM (TTM) | 7.37% | ||
| GM | 33.25% | ||
| FCFM | 10.89% |
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-Score5
Asset Turnover1.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | 2.1 | ||
| Debt/EBITDA | 1.58 | ||
| Cap/Depr | 73.3% | ||
| Cap/Sales | 2.14% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 92.07% | ||
| Profit Quality | 147.78% | ||
| Current Ratio | 1.88 | ||
| Quick Ratio | 0.79 | ||
| Altman-Z | 4.66 |
F-Score5
WACC9.5%
ROIC/WACC1.71
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)8.4%
EPS 3Y4.83%
EPS 5Y6.88%
EPS Q2Q%5.08%
EPS Next Y1.29%
EPS Next 2Y6.56%
EPS Next 3Y7.67%
EPS Next 5Y4.88%
Revenue 1Y (TTM)0.65%
Revenue growth 3Y5%
Revenue growth 5Y7.87%
Sales Q2Q%-2.21%
Revenue Next Year-2.37%
Revenue Next 2Y0.59%
Revenue Next 3Y1.43%
Revenue Next 5Y1.38%
EBIT growth 1Y-2.19%
EBIT growth 3Y1.7%
EBIT growth 5Y10.41%
EBIT Next Year20.61%
EBIT Next 3Y12.72%
EBIT Next 5Y11.08%
FCF growth 1Y297.28%
FCF growth 3Y3.15%
FCF growth 5Y13.75%
OCF growth 1Y98.13%
OCF growth 3Y0.86%
OCF growth 5Y11.05%