Discounted Cash Flow Calculation for DB:RWC using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method. We use
analyst's estimates of cash flows going forward 5 years for the 1st stage, the 2nd stage assumes the company grows at a stable rate into perpetuity.
DB:RWC DCF 1st Stage: Next 5 year cash flow forecast
The current share price of
is above its future cash flow value.
Often investors are willing to pay a
for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Rockwell Collins's earnings available for a low price, and how does
this compare to other companies in the same industry?
Rockwell Collins's earnings are expected to grow by 13.9% yearly, however this is not considered high growth (20% yearly).
Rockwell Collins's revenue is expected to grow by 5% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Rockwell Collins's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
Aerospace & Defense
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
4/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
Rockwell Collins's finances.
The net worth of a company is the difference between its assets and liabilities.
Rockwell Collins is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Rockwell Collins's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Rockwell Collins's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
High level of physical assets or inventory.
Debt is not covered by short term assets, assets are 0.7x debt.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Robert K. Ortberg, also known as Kelly, has been a Director of Aptiv PLC since September 13, 2018. Mr. Ortberg has been the President of Rockwell Collins Inc. since September 20, 2012 and serves as its Chief Executive Officer since August 2013. He served as an Executive Vice President at Rockwell Collins Inc. from October 2006 to September 24, 2012 and its Chief Operating Officer of Government Systems from February 2010 to September 24, 2012. He served as the Chief Operating Officer of Commercial Systems at Rockwell Collins Inc. from October 2006 to February 2010. He served as Vice President and General Manager of Air Transport Systems, Commercial Systems at Rockwell Collins Inc. since October 2002. Mr. Ortberg served as Vice President and General Manager of Communications Systems for Government Systems, since 2001. He joined Rockwell Collins Inc. in 1987 and has held various management positions of increasing responsibility, including Vice President of Communications Systems, Director of Data Links and Manager of International Marketing for Government Systems. He has been the Chairman of Rockwell Collins Inc. since November 11, 2015 and has been its Director since August 2013. He served as a Director of Caterpillar Global Mining LLC from July 24, 2008 to July 8, 2011 and Bucyrus International Inc., from July 24, 2008 to July 8th 0211. He is a Member of the Association of the United States Army (AUSA) and Armed Forces Communications and Electronics Association (AFCEA). He serves on the Board of Governors for the Aerospace Industries Association, is a member of The Business Council and Serves as co-chairman of the board of directors of FIRST® (For Inspiration and Recognition of Science and Technology) and the Hawkeye Council of the Boy Scouts of America. He also serves on the University of Iowa Engineering Advisory Board and on the Board of Trustees of the United Way of East Central Iowa. Mr. Ortberg holds a Bachelor of Science Degree in Mechanical Engineering from the University of Iowa.
Kelly's compensation has been consistent with company performance over the past year.
Kelly's remuneration is higher than average for companies of similar size in Germany.
Management Team Tenure
Average tenure and age of the
management team in years:
The average tenure for the Rockwell Collins management team is over 5 years, this suggests they are a seasoned and experienced team.
CFO & Senior VP
COO of Commercial Systems & Executive VP
Executive VP & COO of Government Systems
Senior Vice President of Operations
VP of Investor Relations & Senior Director for External Financial Reporting
Senior Vice President of Corporate Development
Senior Vice President of Human Resources
Senior Vice President of Engineering & Information Technology
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Rockwell Collins board of directors is about average.
Rockwell Collins, Inc. designs, produces, and supports communications and aviation systems worldwide. The company’s Interior Systems segment offers commercial aircraft seats; galley structures, food and beverage preparation equipment, and water and waste systems; oxygen, passenger service, cabin lighting, and de-icing equipment; and integrated engineering and aftermarket services. Its Commercial Systems segment provides integrated avionics and cabin management systems; data link, high frequency, very high frequency, and satellite communications systems; landing sensors and flight management systems; vision, surface surveillance and guidance, and weather radar and collision avoidance systems; integrated flight controls; simulation and training systems; maintenance, repair, parts, and after-sales support services; and aftermarket used equipment. The company’s Government Systems segment offers communications systems; radio navigation, global positioning system, and multi-mode receiver products; avionics, precision targeting, electronic warfare, and training systems; simulation systems; space wheels; visual systems; maintenance, repair, parts, and after-sales support services; and aftermarket used equipment. Its Information Management Services segment provides voice and data communication, cabin connectivity, connectivity management, cybersecurity as a service, and flight support services; airport communications and train dispatching, and information systems; and mission critical security systems. The company serves original equipment manufacturers of commercial air transport, business and regional aircraft, commercial airlines, U.S. Department of Defense, other ministries of defense and government agencies, defense contractors, the U.S. Federal Aviation Administration, and passenger and freight railroads, as well as airport, critical infrastructure, and business aircraft operators. Rockwell Collins, Inc. was founded in 1933 and is headquartered in Cedar Rapids, Iowa.
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