NasdaqGM:EML

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

The Eastern Company designs, manufactures, and sells various engineered solutions for various industrial markets in the United States and internationally. More Details


Snowflake Analysis

Undervalued average dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: EML is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: EML's weekly volatility (7%) has been stable over the past year.


Market Performance


7 Day Return

-0.9%

EML

1.9%

US Machinery

2.8%

US Market


1 Year Return

-19.1%

EML

18.2%

US Machinery

19.7%

US Market

Return vs Industry: EML underperformed the US Machinery industry which returned 18.2% over the past year.

Return vs Market: EML underperformed the US Market which returned 19.7% over the past year.


Shareholder returns

EMLIndustryMarket
7 Day-0.9%1.9%2.8%
30 Day5.2%11.3%8.0%
90 Day0.5%16.3%6.8%
1 Year-17.3%-19.1%21.3%18.2%22.4%19.7%
3 Year-17.6%-22.0%33.3%23.7%47.3%37.5%
5 Year39.0%26.1%123.7%98.6%93.6%72.3%

Long-Term Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: EML ($22.47) is trading below our estimate of fair value ($88.41)

Significantly Below Fair Value: EML is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: EML is good value based on its PE Ratio (15.6x) compared to the US Machinery industry average (29.8x).

PE vs Market: EML is good value based on its PE Ratio (15.6x) compared to the US market (19.7x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate EML's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: EML is good value based on its PB Ratio (1.3x) compared to the US Machinery industry average (2.8x).


Next Steps

Future Growth

How is Eastern forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

23.3%

Forecasted Capital Goods industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Eastern has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Eastern performed over the past 5 years?

16.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: EML has a large one-off loss of $3.7M impacting its October 3 2020 financial results.

Growing Profit Margin: EML's current net profit margins (3.6%) are lower than last year (5.3%).


Past Earnings Growth Analysis

Earnings Trend: EML's earnings have grown by 16.3% per year over the past 5 years.

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

Earnings vs Industry: EML had negative earnings growth (-29.5%) over the past year, making it difficult to compare to the Machinery industry average (-15.6%).


Return on Equity

High ROE: EML's Return on Equity (8.4%) is considered low.


Next Steps

Financial Health

How is Eastern's financial position?


Financial Position Analysis

Short Term Liabilities: EML's short term assets ($107.9M) exceed its short term liabilities ($33.4M).

Long Term Liabilities: EML's short term assets ($107.9M) do not cover its long term liabilities ($131.8M).


Debt to Equity History and Analysis

Debt Level: EML's debt to equity ratio (89.5%) is considered high.

Reducing Debt: EML's debt to equity ratio has increased from 4.2% to 89.5% over the past 5 years.

Debt Coverage: EML's debt is well covered by operating cash flow (28.6%).

Interest Coverage: EML's interest payments on its debt are well covered by EBIT (6x coverage).


Balance Sheet


Next Steps

Dividend

What is Eastern current dividend yield, its reliability and sustainability?

1.96%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: EML's dividend (1.96%) is higher than the bottom 25% of dividend payers in the US market (1.47%).

High Dividend: EML's dividend (1.96%) is low compared to the top 25% of dividend payers in the US market (4.05%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (30.6%), EML's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

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

9.4yrs

Average management tenure


CEO

Gus Vlak (53 yo)

4.83yrs

Tenure

US$902,146

Compensation

Mr. August M. Vlak, also known as Gus, has been the Chief Executive Officer and President at The Eastern Company since January 1, 2016. Mr. Vlak serves as Managing Director at DM Capital. He has been a man...


CEO Compensation Analysis

Compensation vs Market: Gus's total compensation ($USD902.15K) is above average for companies of similar size in the US market ($USD561.41K).

Compensation vs Earnings: Gus's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
August Vlak
President4.83yrsUS$902.15k0.29%
$ 411.9k
John Sullivan
VP & CFO13.92yrsUS$831.04k0.49%
$ 685.2k
Christopher Moulton
Head of Corporate Development & Investor Relationsno datano datano data
Theresa Dews
Secretary13.92yrsno datano data
Nicholas Vlahos
Treasurerno datano datano data
Angelo Labbadia
Group Vice President2.83yrsUS$567.98kno data

9.4yrs

Average Tenure

62yo

Average Age

Experienced Management: EML's management team is seasoned and experienced (9.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
August Vlak
President4.83yrsUS$902.15k0.29%
$ 411.9k
John Everets
Independent Director27.83yrsUS$36.01k1.93%
$ 2.7m
Michael McManus
Independent Director5.5yrsUS$44.00k0.24%
$ 336.3k
Charles Henry
Independent Director31.83yrsUS$37.72k1.06%
$ 1.5m
James Mitarotonda
Independent Chairman4.83yrsUS$68.75k0.22%
$ 303.9k
Peggy Scott
Independent Director1.5yrsUS$27.46k0.092%
$ 128.6k
Fredrick DiSanto
Independent Director4.58yrsUS$48.75k0.25%
$ 344.6k

4.8yrs

Average Tenure

69yo

Average Age

Experienced Board: EML's board of directors are considered experienced (4.8 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

The Eastern Company's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Eastern Company
  • Ticker: EML
  • Exchange: NasdaqGM
  • Founded: 1858
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Market Cap: US$140.278m
  • Shares outstanding: 6.24m
  • Website: https://www.easterncompany.com

Number of Employees


Location

  • The Eastern Company
  • 112 Bridge Street
  • PO Box 460
  • Naugatuck
  • Connecticut
  • 6770
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
EMLNasdaqGM (Nasdaq Global Market)YesCommon StockUSUSDJan 1968
EAQDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968

Biography

The Eastern Company designs, manufactures, and sells various engineered solutions for various industrial markets in the United States and internationally. The company operates through three segments: Indus...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/11/26 23:57
End of Day Share Price2020/11/25 00:00
Earnings2020/10/03
Annual Earnings2019/12/28


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.