NYSE:ROK

Stock Analysis Report

Executive Summary

Rockwell Automation, Inc. provides industrial automation and digital transformation solutions.

Rewards

Earnings are forecast to grow 13.11% per year

Earnings grew by 29.9% over the past year

Pays a high and reliable dividend of 2.01%

Risk Analysis

Has a high level of debt

Large one-off items impacting financial results



Snowflake Analysis

Established dividend payer with mediocre balance sheet.


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Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-0.2%

ROK

1.2%

US Electrical

1.7%

US Market


1 Year Return

24.3%

ROK

23.1%

US Electrical

23.2%

US Market

Return vs Industry: ROK exceeded the US Electrical industry which returned 24.7% over the past year.

Return vs Market: ROK exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

ROKIndustryMarket
7 Day-0.2%1.2%1.7%
30 Day0.4%1.2%4.2%
90 Day21.0%14.2%11.9%
1 Year27.2%24.3%25.7%23.1%25.8%23.2%
3 Year55.0%45.7%40.7%32.5%52.8%42.9%
5 Year114.3%91.6%58.2%42.1%75.2%55.8%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

34.84x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ROK ($202.9) is trading above our estimate of fair value ($147.93)

Significantly Below Fair Value: ROK is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: ROK is poor value based on its PE Ratio (34.5x) compared to the Electrical industry average (18x).

PE vs Market: ROK is poor value based on its PE Ratio (34.5x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: ROK is poor value based on its PEG Ratio (2.6x)


Price to Book Ratio

PB vs Industry: ROK is overvalued based on its PB Ratio (58.1x) compared to the US Electrical industry average (1.8x).


Next Steps

Future Growth

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

13.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ROK's forecast earnings growth (13.1% per year) is above the savings rate (1.7%).

Earnings vs Market: ROK's earnings (13.1% per year) are forecast to grow slower than the US market (14.3% per year).

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

Revenue vs Market: ROK's revenue (3.4% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: ROK's revenue (3.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ROK's Return on Equity is forecast to be very high in 3 years time (135.1%).


Next Steps

Past Performance

How has Rockwell Automation performed over the past 5 years?

-3.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ROK has a large one-off loss of $368.5M impacting its September 30 2019 financial results.

Growing Profit Margin: ROK's current net profit margins (10.4%) are higher than last year (8%).


Past Earnings Growth Analysis

Earnings Trend: ROK's earnings have declined by -3.5% per year over the past 5 years.

Accelerating Growth: ROK's earnings growth over the past year (29.9%) exceeds its 5-year average (-3.5% per year).

Earnings vs Industry: ROK earnings growth over the past year (29.9%) exceeded the Electrical industry 4.2%.


Return on Equity

High ROE: Whilst ROK's Return on Equity (172.14%) is outstanding, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Rockwell Automation's financial position?


Financial Position Analysis

Short Term Liabilities: ROK's short term assets ($3.0B) exceed its short term liabilities ($1.9B).

Long Term Liabilities: ROK's short term assets ($3.0B) do not cover its long term liabilities ($3.8B).


Debt to Equity History and Analysis

Debt Level: ROK's debt to equity ratio (558.4%) is considered high.

Reducing Debt: ROK's debt to equity ratio has increased from 46.2% to 558.4% over the past 5 years.

Debt Coverage: ROK's debt is well covered by operating cash flow (52.4%).

Interest Coverage: ROK's interest payments on its debt are well covered by EBIT (15.7x coverage).


Balance Sheet

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

Debt Coverage by Assets: ROK's debt is covered by short term assets (assets are 1.3x debt).


Next Steps

Dividend

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

1.99%

Current Dividend Yield


Dividend Yield vs Market

company2.0%marketbottom25%1.4%markettop25%3.6%industryaverage2.1%forecastin3Years2.1%

Current dividend yield vs market & industry

Notable Dividend: ROK's dividend (2.01%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: ROK's dividend (2.01%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (66%), ROK's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ROK's dividends in 3 years are forecast to be well covered by earnings (44.8% payout ratio).


Next Steps

Management

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

2.9yrs

Average management tenure


CEO

Blake Moret (56yo)

3.5yrs

Tenure

US$11,710,165

Compensation

Mr. Blake D. Moret has been a Independent Director of PTC Inc. since July 19, 2018. He has been the Chief Executive Officer and President of Rockwell Automation Inc. since July 1, 2016 and its Chairman sin ...


CEO Compensation Analysis

Compensation vs Market: Blake's total compensation ($USD11.71M) is about average for companies of similar size in the US market ($USD10.76M).

Compensation vs Earnings: Blake's compensation has increased by more than 20% in the past year.


Management Age and Tenure

2.9yrs

Average Tenure

54.5yo

Average Age

Experienced Management: ROK's management team is considered experienced (2.9 years average tenure).


Board Age and Tenure

5.0yrs

Average Tenure

59yo

Average Age

Experienced Board: ROK's board of directors are considered experienced (5 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellUS$2,183,14615 Nov 19
Sujeet Chand
EntityIndividual
Role
Chief Technology Officer
CTO & Senior VP
Shares11,000
Max PriceUS$198.47
SellUS$187,91415 Nov 19
David Dorgan
EntityIndividual
Shares948
Max PriceUS$198.22
SellUS$896,09415 Nov 19
Frank Kulaszewicz
EntityIndividual
Role
Senior Key Executive
Senior VP and Head of Control Products & Solutions segment
Shares4,497
Max PriceUS$199.26
SellUS$531,92530 Jul 19
John Miller
EntityIndividual
Shares3,250
Max PriceUS$163.67
SellUS$9,39306 May 19
Robert Murphy
EntityIndividual
Shares53
Max PriceUS$177.22
SellUS$1,345,70925 Feb 19
Sujeet Chand
EntityIndividual
Role
Chief Technology Officer
CTO & Senior VP
Shares7,500
Max PriceUS$179.43
SellUS$218,74722 Feb 19
Frank Kulaszewicz
EntityIndividual
Role
Senior Key Executive
Senior VP and Head of Control Products & Solutions segment
Shares1,231
Max PriceUS$177.70

Ownership Breakdown

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


Management Team

  • Jessica Kourakos

    Head of Investor Relations

    • Sujeet Chand (61yo)

      CTO & Senior VP

      • Tenure: 14.3yrs
      • Compensation: US$2.24m
    • Blake Moret (56yo)

      Chairman

      • Tenure: 3.5yrs
      • Compensation: US$11.71m
    • Frank Kulaszewicz (55yo)

      Senior VP and Head of Control Products & Solutions segment

      • Compensation: US$4.34m
    • Patrick Goris (48yo)

      Senior VP & CFO

      • Tenure: 2.9yrs
      • Compensation: US$2.93m
    • Becky House (46yo)

      Senior VP

      • Tenure: 3yrs
      • Compensation: US$1.89m
    • Chris Nardecchia (57yo)

      Senior VP for IT & Chief Information Officer

      • Tenure: 2.2yrs
    • Bruce Quinn

      Vice President Public Affairs

      • Francis Wlodarczyk (54yo)

        Senior Vice President

        • Tenure: 1.5yrs
        • Compensation: US$2.82m
      • Ernest Nicolas (42yo)

        Senior Vice President of Operations & Engineering Services

        • Tenure: 0.2yrs

      Board Members

      • Lisa Payne (60yo)

        Independent Director

        • Tenure: 5yrs
        • Compensation: US$267.63k
      • Jim Keane (60yo)

        Independent Director

        • Tenure: 9yrs
        • Compensation: US$263.00k
      • Don Parfet (66yo)

        Lead Independent Director

        • Compensation: US$288.22k
      • Steve Kalmanson (67yo)

        Independent Director

        • Tenure: 9yrs
        • Compensation: US$252.31k
      • J. Holloman (64yo)

        Independent Director

        • Tenure: 6.8yrs
        • Compensation: US$279.09k
      • Larry Kingsley (56yo)

        Independent Director

        • Tenure: 6.8yrs
        • Compensation: US$279.34k
      • Pam Murphy (46yo)

        Independent Director

        • Tenure: 0.6yrs
        • Compensation: US$97.84k
      • Blake Moret (56yo)

        Chairman

        • Tenure: 3.5yrs
        • Compensation: US$11.71m
      • Tom Rosamilia (58yo)

        Independent Director

        • Tenure: 3.8yrs
        • Compensation: US$255.00k
      • Patty Watson (53yo)

        Independent Director

        • Tenure: 2.5yrs
        • Compensation: US$257.50k

      Company Information

      Rockwell Automation, Inc.'s company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: Rockwell Automation, Inc.
      • Ticker: ROK
      • Exchange: NYSE
      • Founded: 1903
      • Industry: Electrical Components and Equipment
      • Sector: Capital Goods
      • Market Cap: US$23.779b
      • Shares outstanding: 115.85m
      • Website: https://www.rockwellautomation.com

      Number of Employees


      Location

      • Rockwell Automation, Inc.
      • 1201 South 2nd Street
      • Milwaukee
      • Wisconsin
      • 53204
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      ROKNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
      0KXALSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
      RWLDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
      RWLXTRA (XETRA Trading Platform)YesCommon StockDEEURJan 1968
      ROK *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
      RWLETLX (Eurotlx)YesCommon StockITEURJan 1968

      Biography

      Rockwell Automation, Inc. provides industrial automation and digital transformation solutions. It operates in two segments, Architecture & Software, and Control Products & Solutions. The Architecture & Software segment offers a portfolio of automation and information platforms, including hardware and software. Its products include programmable automation controllers; design, visualization, and simulation software; and human machine interface products, networking products, industrial computers, sensing devices, machine safety devices, motion control products, and independent cart technology products. This segment also offers manufacturing execution systems and analytics software to enhance operational productivity and meet regulatory requirements. The Control Products & Solutions segment offers low and medium voltage electro-mechanical and electronic motor starters, AC/DC variable frequency drives, motor control and circuit protection devices, operator and signaling devices, termination and protection devices, relays and timers, and electrical control accessories. This segment also provides pre-configured line and load power solutions, packaged drives, motor control centers, and intelligent packaged power and engineered to order automation equipment solutions; and professional lifecycle services, such as safety, security, and digital transformation consulting, as well as automation and information project delivery capabilities, plant network, cloud, cybersecurity, asset management and predictive analytics, and remote, on-site, and managed support services. It primarily serves a range of industries, which include the automotive, semiconductor, and warehousing and logistics; food and beverage, and life sciences; and oil and gas, metals, and chemicals through independent distributors and direct sales force worldwide. Rockwell Automation, Inc. was founded in 1903 and is headquartered in Milwaukee, Wisconsin. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/17 23:38
      End of Day Share Price2020/01/17 00:00
      Earnings2019/09/30
      Annual Earnings2019/09/30


      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.