NasdaqGM:EML

Stock Analysis Report

Executive Summary

The Eastern Company designs, manufactures, and sells industrial hardware, security products, and metal products in the United States and internationally.

Snowflake

Fundamentals

Excellent balance sheet, good value and pays a dividend.


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


Market Performance


7 Day Return

6.9%

EML

2.3%

US Machinery

0.6%

US Market


1 Year Return

-6.2%

EML

2.4%

US Machinery

6.2%

US Market

Return vs Industry: EML underperformed the US Machinery industry which returned 2.4% over the past year.

Return vs Market: EML underperformed the US Market which returned 6.2% over the past year.


Share holder returns

EMLIndustryMarket
7 Day6.9%2.3%0.6%
30 Day-4.4%-3.1%-1.8%
90 Day-6.1%-3.8%-2.0%
1 Year-4.6%-6.2%4.6%2.4%8.6%6.2%
3 Year38.0%31.0%46.0%36.6%45.7%36.3%
5 Year81.4%63.7%60.4%41.0%68.5%50.0%

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 based on future cash flows and its price relative to the stock market?

26%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Undervalued: EML ($25.6) is trading below our estimate of fair value ($34.8)

Significantly Undervalued: EML is trading below fair value, but not by a significant amount.


Price Based on Earnings

PE vs Industry: EML is good value based on its PE Ratio (13x) compared to the Machinery industry average (19.7x).

PE vs Market: EML is good value based on its PE Ratio (13x) compared to the US market (17.5x).


Price Based on Expected Growth

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


Price Based on Value of Assets

PB vs Industry: EML is good value based on its PB Ratio (1.6x) compared to the US Machinery industry average (2.2x).


Next Steps

Future Growth

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

9.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Earnings vs Savings Rate: EML's forecast earnings growth (9.9% per year) is above the savings rate (2.7%).

Earnings vs Market: EML's earnings (9.9% per year) are forecast to grow slower than the US market (14.5% per year).

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

Revenue vs Market: Insufficient data to determine if EML's revenue is forecast to grow faster than the US market.

High Growth Revenue: Insufficient data to determine if EML's revenue is forecast to grow faster than 20% per year.


Earnings per Share Growth Estimates


Future Return on Equity

High Future ROE: Insufficient data to determine if EML's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Eastern performed over the past 5 years?

13.2%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: EML's earnings have grown by 13.2% per year over the past 5 years.

Accelerating Growth: EML's earnings growth over the past year (45.8%) exceeds its 5-year average (13.2% per year).

Earnings vs Industry: EML earnings growth over the past year (45.8%) exceeded the Machinery industry 18.7%.


Return on Equity

High ROE: EML's Return on Equity (12.2%) is considered low.


Return on Assets

ROA vs Industry: EML's Return on Assets is below or equal to the Machinery industry average last year.


Return on Capital Employed

ROCE Improving: EML has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Eastern's financial position?


Financial Position Analysis

Short Term Liabilities: EML's short term assets ($99.3M) exceeds its short term liabilities ($28.3M)

Long Term Liabilities: EML's short term assets ($99.3M) exceeds its long term liabilities ($56.8M)


Debt to Equity History and Analysis

Debt Level: EML's debt to equity ratio (22.3%) is considered satisfactory

Reducing Debt: EML's debt to equity ratio has increased from 6.4% to 22.3% over the past 5 years.

Debt Coverage: EML's debt is well covered by operating cash flow (71.3%).

Interest Coverage: EML's interest payments on its debt are well covered by EBIT (15.8x coverage).


Balance Sheet

Inventory Level: EML has a high level of physical assets or inventory.

Debt Coverage by Assets: EML's debt is covered by short term assets (assets are 4.433490x debt).


Next Steps

Dividend

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

1.72%

Current Dividend Yield


Dividend Yield vs Market

company1.7%marketbottom25%1.5%markettop25%3.8%industryaverage1.7%forecastin3Yearsn/a

Current dividend yield vs market & industry


Dividend Yield and Payments Analysis

Notable Dividend: EML's dividend (1.72%) is higher than the bottom 25% of dividend payers in the US market (1.46%).

High Dividend: EML's dividend (1.72%) is low compared to the top 25% of dividend payers in the US market (3.77%).

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 low payout ratio (22.4%), 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

What is the CEO of Eastern's salary, the management and board of directors tenure and is there insider trading?

12.8yrs

Average management tenure


CEO

Gus Vlak (52yo)

3.8yrs

Tenure

US$1,158,481

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 ($USD1.16M) is about average for companies of similar size in the US market ($USD1.17M).

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


Management Age and Tenure

12.8yrs

Average Tenure

61yo

Average Age

Experienced Management: EML's management team is seasoned and experienced (12.8 years average tenure).


Board Age and Tenure

3.8yrs

Average Tenure

68yo

Average Age

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


Insider Trading

Insider Buying: EML insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$51,51009 Sep 19
Peggy Scott
EntityIndividual
Role
Member of the Board of Directors
Director
Shares2,041
Max PriceUS$25.24
BuyUS$140,06709 Sep 19
August Vlak
EntityIndividual
Role
Chief Executive Officer
President
Shares5,717
Max PriceUS$24.50
BuyUS$101,16122 Mar 19
Teton Advisors, Inc
EntityCompany
Shares3,700
Max PriceUS$27.70
SellUS$022 Mar 19
GAMCO Investors, Inc.
EntityCompany
Shares200
Max PriceUS$28.51
BuyUS$187,59322 Mar 19
GAMCO Investors, Inc.
EntityCompany
Shares42,496
Max PriceUS$29.30

Ownership Breakdown


Management Team

  • John Sullivan (66yo)

    VP & CFO

    • Tenure: 12.8yrs
    • Compensation: US$575.07k
  • Theresa Dews

    Secretary

    • Tenure: 12.8yrs
  • Gene Finelli

    Treasurer

    • Tenure: 12.8yrs
  • Gus Vlak (52yo)

    President

    • Tenure: 3.8yrs
    • Compensation: US$1.16m
  • Angelo Labbadia (61yo)

    Group Vice President

    • Tenure: 1.8yrs
    • Compensation: US$567.98k
  • Chris Moulton

    Head of Corporate Development & Investor Relations

    • Tenure: 0yrs

Board Members

  • John Everets (72yo)

    Independent Director

    • Tenure: 26.8yrs
    • Compensation: US$32.51k
  • Michael McManus (76yo)

    Independent Director

    • Tenure: 4.4yrs
    • Compensation: US$40.00k
  • Charles Henry (69yo)

    Independent Director

    • Tenure: 30.8yrs
    • Compensation: US$33.27k
  • James Mitarotonda (65yo)

    Independent Chairman

    • Tenure: 3.8yrs
    • Compensation: US$64.89k
  • Peggy Scott (68yo)

    Director

    • Tenure: 0.4yrs
  • Fred DiSanto (57yo)

    Independent Director

    • Tenure: 3.5yrs
    • Compensation: US$47.75k
  • Gus Vlak (52yo)

    President

    • Tenure: 3.8yrs
    • Compensation: US$1.16m

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$159.642m
  • 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

Biography

The Eastern Company designs, manufactures, and sells industrial hardware, security products, and metal products in the United States and internationally. The company’s Industrial Hardware segment offers pa ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/12 23:51
End of Day Share Price2019/10/11 00:00
Earnings2019/06/29
Annual Earnings2018/12/29


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.

© 2018 SIMPLY WALL STREET PTY LTD, COMMUNITY DESIGN 2845206, US DESIGN PATENT #29/544/281, EUROPEAN DESIGN REGISTRATION #2845206, STANDARD & POOR’S FINANCIAL SERVICES LLC. ALL RIGHTS RESERVED.

Simply Wall Street Pty Ltd (ACN 600 056 611), is a Corporate Authorised Representative (Authorised Representative Number: 467183) of Sanlam Private Wealth Pty Ltd (AFSL No. 337927). Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situation or needs. You should not rely on any advice and/or information contained in this website and before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice. Please read our Financial Services Guide before deciding whether to obtain financial services from us.

Copyright © 2018, Standard & Poor’s Financial Services LLC. Reproduction of S&P Capital IQ in any form is prohibited except with the prior written permission of S&P. S&P does not guarantee the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions, regardless of the cause or for the results obtained from the use of such information. S&P DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. In no event shall S&P be liable for any direct, indirect, special or consequential damages, costs, expenses, legal fees, or losses (including lost income or lost profit and opportunity costs) in connection with subscriber’s or others’ use of S&P Capital IQ. (2018)