NYSE:ETN

Stock Analysis Report

Executive Summary

Eaton Corporation plc operates as a power management company worldwide.

Snowflake

Fundamentals

Established dividend payer with adequate balance sheet.


Similar Companies

Share Price & News

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


Latest Share Price and Events


Market Performance


7 Day Return

3.9%

ETN

3.0%

US Electrical

1.0%

US Market


1 Year Return

2.8%

ETN

-0.05%

US Electrical

6.7%

US Market

Return vs Industry: ETN exceeded the US Electrical industry which returned -0% over the past year.

Return vs Market: ETN underperformed the US Market which returned 6.7% over the past year.


Share holder returns

ETNIndustryMarket
7 Day3.9%3.0%1.0%
30 Day-7.0%-3.4%-1.8%
90 Day0.3%-1.1%-1.8%
1 Year6.5%2.8%2.1%-0.05%9.1%6.7%
3 Year42.7%28.9%39.5%31.4%46.1%36.6%
5 Year58.0%33.2%36.5%22.9%66.9%48.6%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

15.76x

Price to Earnings (PE) ratio


Intrinsic Value Based on Future Cash Flows

Undervalued: ETN ($81.36) is trading above our estimate of fair value ($73.84)

Significantly Undervalued: ETN is trading above our estimate of fair value.


Price Based on Earnings

PE vs Industry: ETN is poor value based on its PE Ratio (15.8x) compared to the Electrical industry average (15.3x).

PE vs Market: ETN is good value based on its PE Ratio (15.8x) compared to the US market (17.5x).


Price Based on Expected Growth

Low PEG Ratio: ETN is poor value based on its PEG Ratio (2.8x)


Price Based on Value of Assets

PB vs Industry: ETN is overvalued based on its PB Ratio (2.1x) compared to the US Electrical industry average (1.5x).


Next Steps

Future Growth

How is Eaton expected to perform in the next 1 to 3 years based on estimates from 20 analysts?

5.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Earnings vs Savings Rate: ETN's forecast earnings growth (5.6% per year) is above the savings rate (2.7%).

Earnings vs Market: ETN's earnings (5.6% per year) are forecast to grow slower than the US market (14.5% per year).

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

Revenue vs Market: ETN's revenue (2.2% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: ETN's revenue (2.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Estimates


Future Return on Equity

High Future ROE: ETN's Return on Equity is forecast to be low in 3 years time (16.1%).


Next Steps

Past Performance

How has Eaton performed over the past 5 years?

8.0%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: ETN's earnings have grown by 8% per year over the past 5 years.

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

Earnings vs Industry: ETN had negative earnings growth (-29.6%) over the past year, making it difficult to compare to the Electrical industry average (24%).


Return on Equity

High ROE: ETN's Return on Equity (13.5%) is considered low.


Return on Assets

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


Return on Capital Employed

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


Next Steps

Financial Health

How is Eaton's financial position?


Financial Position Analysis

Short Term Liabilities: ETN's short term assets ($8.1B) exceeds its short term liabilities ($4.5B)

Long Term Liabilities: ETN's short term assets (8.1B) do not cover its long term liabilities (11.4B)


Debt to Equity History and Analysis

Debt Level: ETN's debt to equity ratio (49.5%) is considered high

Reducing Debt: ETN's debt to equity ratio has reduced from 53.2% to 49.5% over the past 5 years.

Debt Coverage: ETN's debt is well covered by operating cash flow (40.1%).

Interest Coverage: ETN's interest payments on its debt are well covered by EBIT (11.6x coverage).


Balance Sheet

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

Debt Coverage by Assets: ETN's debt is covered by short term assets (assets are 1.003330x debt).


Next Steps

Dividend

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

3.73%

Expected Dividend Yield


Dividend Yield vs Market

company3.5%marketbottom25%1.5%markettop25%3.8%industryaverage2.1%forecastin3Years3.7%

Current dividend yield vs market & industry


Dividend Yield and Payments Analysis

Notable Dividend: ETN's dividend (3.49%) is higher than the bottom 25% of dividend payers in the US market (1.46%).

High Dividend: ETN's dividend (3.49%) is low compared to the top 25% of dividend payers in the US market (3.77%).

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (53.1%), ETN's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ETN's dividends in 3 years are forecast to be well covered by earnings (48.9% payout ratio).


Next Steps

Management

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

4.1yrs

Average management tenure


CEO

Craig Arnold (59yo)

0yrs

Tenure

US$14,673,845

Compensation

Mr. Craig Arnold has been the Chairman of Eaton Corporation plc since June 1, 2016 and Chief Executive Officer at Eaton Corporation since June 01, 2016. Mr. Arnold serves as Chief Executive Officer of Eato ...


CEO Compensation Analysis

Compensation vs. Market: Craig's total compensation ($USD14.67M) is about average for companies of similar size in the US market ($USD11.20M).

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


Management Age and Tenure

4.1yrs

Average Tenure

56yo

Average Age

Experienced Management: ETN's management team is considered experienced (4.1 years average tenure).


Board Age and Tenure

10.3yrs

Average Tenure

64yo

Average Age

Experienced Board: ETN's board of directors are seasoned and experienced ( 10.3 years average tenure).


Insider Trading

Insider Buying: ETN insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$1,507,73016 Sep 19
Ken Semelsberger
EntityIndividual
Role
Chief Accounting Officer
Principal Accounting Officer
Shares17,000
Max PriceUS$88.69
SellUS$86,89012 Sep 19
Joao Faria
EntityIndividual
Shares1,000
Max PriceUS$86.89
SellUS$217,06312 Sep 19
Nanda Cheruvatath
EntityIndividual
Shares2,500
Max PriceUS$86.83
SellUS$237,54003 Sep 19
Deborah McCoy
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,000
Max PriceUS$79.18
BuyUS$49,81821 May 19
Olivier Leonetti
EntityIndividual
Shares630
Max PriceUS$79.08
BuyUS$129,98414 May 19
Dorothy Thompson
EntityIndividual
Shares1,655
Max PriceUS$78.54
SellUS$967,20015 Mar 19
Curtis Hutchins
EntityIndividual
Shares12,000
Max PriceUS$80.60
SellUS$1,522,47913 Mar 19
Richard Eubanks
EntityIndividual
Shares18,894
Max PriceUS$80.58
SellUS$402,30013 Mar 19
Brian Brickhouse
EntityIndividual
Shares5,000
Max PriceUS$80.46
SellUS$2,475,83013 Mar 19
Richard Fearon
EntityIndividual
Role
Vice Chairman
Vice Chairman and Chief Financial & Planning Officer
Shares31,000
Max PriceUS$80.25
SellUS$801,38913 Mar 19
Nanda Cheruvatath
EntityIndividual
Shares9,992
Max PriceUS$80.21
SellUS$1,366,38105 Mar 19
Uday Yadav
EntityIndividual
Role
Senior Key Executive
President & COO of Electrical Sector
Shares16,980
Max PriceUS$80.47
SellUS$582,29005 Mar 19
Heath Monesmith
EntityIndividual
Shares7,167
Max PriceUS$81.25
SellUS$7,62205 Mar 19
Nanda Cheruvatath
EntityIndividual
Shares95
Max PriceUS$80.23
SellUS$685,35911 Feb 19
Curtis Hutchins
EntityIndividual
Shares9,025
Max PriceUS$75.94
SellUS$383,65005 Feb 19
Joao Faria
EntityIndividual
Shares5,000
Max PriceUS$76.73

Ownership Breakdown


Management Team

  • Ken Semelsberger (57yo)

    Principal Accounting Officer

    • Tenure: 0yrs
  • Craig Arnold (59yo)

    Chairman & CEO

    • Tenure: 0yrs
    • Compensation: US$14.67m
  • Rick Fearon (63yo)

    Vice Chairman and Chief Financial & Planning Officer

    • Tenure: 17.5yrs
    • Compensation: US$5.71m
  • William Blausey (54yo)

    Chief Information Officer & Senior VP

    • Tenure: 13.8yrs
  • Ram Ramakrishnan

    Chief Technology Officer & Executive VP

    • Tenure: 7.3yrs
  • Uday Yadav (55yo)

    President & COO of Electrical Sector

    • Tenure: 4.1yrs
    • Compensation: US$4.06m
  • Yan Jin

    Senior Vice President of Investor Relations

    • Tenure: 0.6yrs
  • Deborah Severs

    Senior Vice President of Global Ethics & Compliance

    • Tenure: 7.7yrs
  • Terry Szmagala

    Senior Vice President of Public & Community Affairs and Corporate Communications

    • Tenure: 2.8yrs
  • Mark Eubanks (46yo)

    President of Electrical Products Group - Eaton Corporation

    • Tenure: 4.1yrs
    • Compensation: US$2.52m

Board Members

  • Mike Critelli (70yo)

    Independent Director

    • Tenure: 21.8yrs
    • Compensation: US$326.20k
  • Chris Connor (62yo)

    Lead Director

    • Tenure: 3.8yrs
    • Compensation: US$367.99k
  • Craig Arnold (59yo)

    Chairman & CEO

    • Tenure: 0yrs
    • Compensation: US$14.67m
  • Arthur Johnson (72yo)

    Independent Director

    • Tenure: 10.8yrs
    • Compensation: US$343.45k
  • Debbie McCoy (64yo)

    Independent Director

    • Tenure: 19.8yrs
    • Compensation: US$339.24k
  • Gerald Smith (68yo)

    Independent Director

    • Tenure: 6.9yrs
    • Compensation: US$343.13k
  • Greg Page (68yo)

    Independent Director

    • Tenure: 16.5yrs
    • Compensation: US$336.23k
  • Rick Fearon (63yo)

    Vice Chairman and Chief Financial & Planning Officer

    • Tenure: 17.5yrs
    • Compensation: US$5.71m
  • Todd Bluedorn (55yo)

    Independent Director

    • Tenure: 9.8yrs
    • Compensation: US$345.39k
  • Sandra Pianalto (64yo)

    Independent Director

    • Tenure: 5.3yrs
    • Compensation: US$333.13k

Company Information

Eaton Corporation plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Eaton Corporation plc
  • Ticker: ETN
  • Exchange: NYSE
  • Founded: 1916
  • Industry: Electrical Components and Equipment
  • Sector: Capital Goods
  • Market Cap: US$34.171b
  • Shares outstanding: 420.00m
  • Website: https://www.eaton.com

Number of Employees


Location

  • Eaton Corporation plc
  • Eaton House
  • 30 Pembroke Road
  • Dublin
  • 4
  • Ireland

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ETNNYSE (New York Stock Exchange)YesCommon SharesUSUSDJan 1968
0Y3KLSE (London Stock Exchange)YesCommon SharesGBUSDJan 1968
3ECDB (Deutsche Boerse AG)YesCommon SharesDEEURJan 1968
ETN1 NBMV (Bolsa Mexicana de Valores)YesCommon SharesMXMXNJan 1968

Biography

Eaton Corporation plc operates as a power management company worldwide. Its Electrical Products segment offers electrical and industrial components, wiring devices, and structural support systems; and resi ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/14 01:08
End of Day Share Price2019/10/11 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.

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