SWX:ABBN

Stock Analysis Report

Executive Summary

ABB Ltd manufactures and sells electrification, industrial automation, and robotics and motion products for customers in utilities, industry and transport, and infrastructure worldwide.

Rewards

Trading at 2.8% below its fair value

Earnings are forecast to grow 16.42% per year

Pays a high and reliable dividend of 3.56%

Risk Analysis

Has a high level of debt

Dividend of 3.56% is not well covered by earnings

Large one-off items impacting financial results

Profit margins (3.6%) are lower than last year (5.2%)



Snowflake Analysis

Established dividend payer with adequate balance sheet.


Similar Companies

Share Price & News

How has ABB's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ABBN has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-7.3%

ABBN

-7.2%

CH Electrical

-6.1%

CH Market


1 Year Return

10.1%

ABBN

8.4%

CH Electrical

9.9%

CH Market

Return vs Industry: ABBN exceeded the Swiss Electrical industry which returned 6.4% over the past year.

Return vs Market: ABBN exceeded the Swiss Market which returned 9% over the past year.


Shareholder returns

ABBNIndustryMarket
7 Day-7.3%-7.2%-6.1%
30 Day-1.4%-1.6%-1.8%
90 Day1.7%1.4%0.04%
1 Year14.5%10.1%12.6%8.4%15.2%9.9%
3 Year7.8%-3.3%7.3%-3.6%31.7%15.6%
5 Year31.9%9.7%30.2%9.0%37.0%15.7%

Price Volatility Vs. Market

How volatile is ABB's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is ABB undervalued compared to its fair value and its price relative to the market?

2.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ABBN (CHF22.31) is trading below our estimate of fair value (CHF22.96)

Significantly Below Fair Value: ABBN is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: ABBN is poor value based on its PE Ratio (48.7x) compared to the Electrical industry average (23.6x).

PE vs Market: ABBN is poor value based on its PE Ratio (48.7x) compared to the Swiss market (20.3x).


Price to Earnings Growth Ratio

PEG Ratio: ABBN is poor value based on its PEG Ratio (3x)


Price to Book Ratio

PB vs Industry: ABBN is overvalued based on its PB Ratio (3.6x) compared to the CH Electrical industry average (2.1x).


Next Steps

Future Growth

How is ABB forecast to perform in the next 1 to 3 years based on estimates from 21 analysts?

16.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ABBN's forecast earnings growth (16.4% per year) is above the savings rate (-0.6%).

Earnings vs Market: ABBN's earnings (16.4% per year) are forecast to grow faster than the Swiss market (10.3% per year).

High Growth Earnings: ABBN's earnings are forecast to grow, but not significantly.

Revenue vs Market: ABBN's revenue (2.4% per year) is forecast to grow slower than the Swiss market (2.8% per year).

High Growth Revenue: ABBN's revenue (2.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ABBN's Return on Equity is forecast to be high in 3 years time (24%)


Next Steps

Past Performance

How has ABB performed over the past 5 years?

-19.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ABBN has a large one-off loss of $477.0M impacting its December 31 2019 financial results.

Growing Profit Margin: ABBN's current net profit margins (3.6%) are lower than last year (5.2%).


Past Earnings Growth Analysis

Earnings Trend: ABBN's earnings have declined by -19.7% per year over the past 5 years.

Accelerating Growth: ABBN's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ABBN had negative earnings growth (-31%) over the past year, making it difficult to compare to the Electrical industry average (3.3%).


Return on Equity

High ROE: ABBN's Return on Equity (7.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is ABB's financial position?


Financial Position Analysis

Short Term Liabilities: ABBN's short term assets ($26.5B) exceed its short term liabilities ($20.3B).

Long Term Liabilities: ABBN's short term assets ($26.5B) exceed its long term liabilities ($11.9B).


Debt to Equity History and Analysis

Debt Level: ABBN's debt to equity ratio (63.6%) is considered high.

Reducing Debt: ABBN's debt to equity ratio has increased from 45.6% to 63.6% over the past 5 years.

Debt Coverage: ABBN's debt is well covered by operating cash flow (26.2%).

Interest Coverage: ABBN's interest payments on its debt are well covered by EBIT (95.7x coverage).


Balance Sheet

Inventory Level: ABBN has a low level of unsold assets or inventory.

Debt Coverage by Assets: ABBN's debt is covered by short term assets (assets are 3x debt).


Next Steps

Dividend

What is ABB's current dividend yield, its reliability and sustainability?

3.56%

Current Dividend Yield


Upcoming Dividend Payment

Purchase ABB before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company3.6%marketbottom25%1.8%markettop25%3.5%industryaverage2.6%forecastin3Years3.7%

Current dividend yield vs market & industry

Notable Dividend: ABBN's dividend (3.56%) is higher than the bottom 25% of dividend payers in the Swiss market (1.83%).

High Dividend: ABBN's dividend (3.56%) is in the top 25% of dividend payers in the Swiss market (3.51%)


Stability and Growth of Payments

Stable Dividend: ABBN's dividends per share have been stable in the past 10 years.

Growing Dividend: ABBN's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (176%), ABBN's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ABBN's dividends in 3 years are forecast to be covered by earnings (56.7% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.5yrs

Average management tenure


CEO

Peter Voser (61yo)

0.8yrs

Tenure

0

Mr. Peter Robert Voser has been the Chief Executive Officer of ABB Ltd. from April 2019 and has been its Chairman since April 2015. Mr. Voser served as Interim Chief Executive Officer of ABB Ltd. since Apr ...


Leadership Team

NamePositionTenureCompensationOwnership
Peter Voser
CEO & Chairman0.8yrsno data0.012% $5.8m
Timo Ihamuotila
Executive VP & CFO2.8yrsUS$3.54m0.0030% $1.4m
Peter Terwiesch
President of Industrial Automation Division3.1yrsUS$3.14m0.0057% $2.7m
Tarak Mehta
President of Electrification Products Division0.8yrsUS$3.21m0.010% $4.7m
Sami Atiya
President of Robotics & Discrete Automation Business0yrsUS$2.68m0.0011% $542.7k
Diane de Saint Victor
Company Secretary13.1yrsUS$3.48m0.029% $13.6m
Björn Klas Rosengren
Executive Officer0yrsno datano data
Bazmi Husain
Chief Technology Officer4.1yrsno datano data
Alec Joannou
Global Chief information officer1.3yrsno datano data
Jessica Mitchell
Head of Investor Relations2.3yrsno datano data

2.5yrs

Average Tenure

57.5yo

Average Age

Experienced Management: ABBN's management team is considered experienced (2.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Peter Voser
CEO & Chairman0.8yrsno data0.012% $5.8m
Frederico C. Pinheiro Curado
Independent & Non-Executive Director3.8yrsno data0.00088% $415.3k
Matti Alahuhta
Independent & Non-Executive Director5.8yrsno data0.0024% $1.1m
Jacob Wallenberg
Independent Vice Chairman4.8yrsno data0.011% $5.0m
Satish Pai
Independent & Non-Executive Director3.8yrsno data0.00089% $420.0k
Lars Förberg
Non-Executive Director2.8yrsno data0.0017% $783.4k
David Meline
Independent & Non-Executive Director3.8yrsno data0.0012% $561.6k
David Constable
Independent & Non-Executive Director4.8yrsno data0.0013% $599.4k
Xin-Zhe Li
Independent Director1.9yrsno data0.00039% $184.1k
Geraldine Matchett
Independent Director1.9yrsno data0.00056% $264.3k

3.8yrs

Average Tenure

58yo

Average Age

Experienced Board: ABBN's board of directors are considered experienced (3.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

ABB Ltd's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: ABB Ltd
  • Ticker: ABBN
  • Exchange: SWX
  • Founded: 1883
  • Industry: Electrical Components and Equipment
  • Sector: Capital Goods
  • Market Cap: CHF47.193b
  • Shares outstanding: 2.13b
  • Website: https://www.new.abb.com

Number of Employees


Location

  • ABB Ltd
  • Affolternstrasse 44
  • Zurich
  • Zurich
  • 8050
  • Switzerland

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ABLZ.FOTCPK (Pink Sheets LLC)YesCommon StockUSUSDJun 1999
ABBNSWX (SIX Swiss Exchange)YesCommon StockCHCHFJun 1999
ABBOM (OMX Nordic Exchange Stockholm)YesCommon StockSESEKJun 1999
ABJDB (Deutsche Boerse AG)YesCommon StockDEEURJun 1999
0NX2LSE (London Stock Exchange)YesCommon StockGBSEKJun 1999
ABJXTRA (XETRA Trading Platform)YesCommon StockDEEURJun 1999
ABBNYSE (New York Stock Exchange)ADR EACH REPR 1 ORD CHF1.03USUSDApr 2001
ABJADB (Deutsche Boerse AG)ADR EACH REPR 1 ORD CHF1.03DEEURApr 2001
ABB NBMV (Bolsa Mexicana de Valores)ADR EACH REPR 1 ORD CHF1.03MXMXNApr 2001

Biography

ABB Ltd manufactures and sells electrification, industrial automation, and robotics and motion products for customers in utilities, industry and transport, and infrastructure worldwide. Its Electrification Products segment provides electric vehicle charging infrastructure, solar power solutions, modular substation packages, distribution automation products, switchboard and panel boards, switchgears, UPS solutions, circuit breakers, measuring and sensing devices, control products, wiring accessories, enclosures and cabling systems, and intelligent home and building solutions. This segment serves building, data center, rail, wind and solar, distribution utilities, food and beverage, marine, e-mobility, and oil and gas industries. The company’s Robotics and Motion segment offers robotics, motors, generators, drives, wind converters, components and systems for railways and related services, and digital solutions for applications in industries, transportation and infrastructure, and utilities. This segment serves machinery manufacturers, process industries, hybrid and batch manufacturers, transportation equipment manufacturers, discrete manufacturing companies, utilities, and customers in the automotive industry. Its Industrial Automation segment provides process and discrete control solutions, advanced process control software and manufacturing execution systems, sensing, measurement and analytical instrumentation and solutions, electric ship propulsion systems, machine and factory automation solutions, and turbochargers, as well as remote monitoring, preventive maintenance, and cybersecurity services. This segment serves companies in the oil and gas, minerals and mining, metals, pulp and paper, chemicals and pharmaceuticals, food and beverage, power generation, and marine industries. ABB Ltd has a strategic collaboration with IBM. ABB Ltd was founded in 1883 and is headquartered in Zurich, Switzerland. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/26 21:00
End of Day Share Price2020/02/26 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.