NYSE:RXN

Stock Analysis Report

Executive Summary

Rexnord Corporation designs, manufactures, and markets process and motion control, and water management products worldwide.

Rewards

PE ratio (21x) is below the Machinery industry average (21.4x)

Earnings are forecast to grow 7.64% per year

Earnings grew by 2.7% over the past year

Risk Analysis

Has a high level of debt

Shareholders have been diluted in the past year



Snowflake Analysis

Proven track record with adequate balance sheet.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

2.0%

RXN

1.0%

US Machinery

0.9%

US Market


1 Year Return

27.2%

RXN

11.5%

US Machinery

20.0%

US Market

Return vs Industry: RXN exceeded the US Machinery industry which returned 11.4% over the past year.

Return vs Market: RXN exceeded the US Market which returned 20.1% over the past year.


Shareholder returns

RXNIndustryMarket
7 Day2.0%1.0%0.9%
30 Day5.3%-2.1%1.4%
90 Day17.2%2.4%8.8%
1 Year27.2%27.2%13.6%11.5%22.5%20.0%
3 Year55.7%55.7%37.0%28.3%49.9%40.3%
5 Year29.8%29.8%63.5%44.3%73.2%54.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

20.96x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: RXN ($35.29) is trading above our estimate of fair value ($34.98)

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


Price To Earnings Ratio

PE vs Industry: RXN is good value based on its PE Ratio (21x) compared to the Machinery industry average (21.4x).

PE vs Market: RXN is poor value based on its PE Ratio (21x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: RXN is poor value based on its PEG Ratio (2.7x)


Price to Book Ratio

PB vs Industry: RXN is overvalued based on its PB Ratio (3.1x) compared to the US Machinery industry average (2.2x).


Next Steps

Future Growth

How is Rexnord forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

7.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RXN's forecast earnings growth (7.6% per year) is above the savings rate (1.7%).

Earnings vs Market: RXN's earnings (7.6% per year) are forecast to grow slower than the US market (14.6% per year).

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

Revenue vs Market: RXN's revenue (3% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: RXN's revenue (3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: RXN's Return on Equity is forecast to be low in 3 years time (17%).


Next Steps

Past Performance

How has Rexnord performed over the past 5 years?

21.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RXN has high quality earnings.

Growing Profit Margin: RXN's current net profit margins (8.8%) are higher than last year (8.7%).


Past Earnings Growth Analysis

Earnings Trend: RXN's earnings have grown significantly by 21.3% per year over the past 5 years.

Accelerating Growth: RXN's earnings growth over the past year (2.7%) is below its 5-year average (21.3% per year).

Earnings vs Industry: RXN earnings growth over the past year (2.7%) exceeded the Machinery industry 0.9%.


Return on Equity

High ROE: RXN's Return on Equity (14.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Rexnord's financial position?


Financial Position Analysis

Short Term Liabilities: RXN's short term assets ($968.6M) exceed its short term liabilities ($347.3M).

Long Term Liabilities: RXN's short term assets ($968.6M) do not cover its long term liabilities ($1.5B).


Debt to Equity History and Analysis

Debt Level: RXN's debt to equity ratio (82%) is considered high.

Reducing Debt: RXN's debt to equity ratio has reduced from 345.5% to 82% over the past 5 years.

Debt Coverage: RXN's debt is well covered by operating cash flow (25.6%).

Interest Coverage: RXN's interest payments on its debt are well covered by EBIT (5.6x coverage).


Balance Sheet

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

Debt Coverage by Assets: RXN's debt is not covered by short term assets (assets are 0.9x debt).


Next Steps

Dividend

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

0.91%

Current Dividend Yield


Dividend Yield vs Market

company0.9%marketbottom25%1.4%markettop25%3.7%industryaverage1.9%forecastin3Years0.6%

Current dividend yield vs market & industry

Notable Dividend: RXN's dividend (0.91%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: RXN's dividend (0.91%) is low compared to the top 25% of dividend payers in the US market (3.69%).


Stability and Growth of Payments

Stable Dividend: Too early to tell whether RXN's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if RXN's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of RXN's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

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

7.7yrs

Average management tenure


CEO

Todd Adams (48yo)

10.4yrs

Tenure

US$6,773,334

Compensation

Mr. Todd A. Adams serves as the Chief Executive Officer and President at Rexnord Industries, LLC. Mr. Adams has been the Chief Executive Officer and President of RBS Global Inc., Rexnord Corporation and Re ...


CEO Compensation Analysis

Compensation vs Market: Todd's total compensation ($USD6.77M) is above average for companies of similar size in the US market ($USD4.89M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Todd Adams
President10.4yrsUS$6.77m0.40% $17.2m
Mark Peterson
Senior VP & CFO8.3yrsUS$2.06m0.024% $1.0m
Patricia Whaley
VP, General Counsel & Secretary18.1yrsUS$1.18m0.043% $1.9m
George Powers
Chief Human Resources Officer5.1yrsUS$1.26m0.0083% $355.5k
Kevin Zaba
Group Executive and President of Process & Motion Control Platform3.8yrsUS$1.83m0.0092% $395.9k
Michael Troutman
Chief Information Officer13.1yrsno data0.012% $535.2k
Robert McCarthy
Vice President of Investor Relations0yrsno datano data
Angela Hersil
Director of Corporate Communications0yrsno datano data
Rodney Jackson
Senior Vice President of Business & Corporate Development5.3yrsUS$911.21k0.014% $590.6k
Craig Wehr
Group President of Zurn7.1yrsUS$1.07m0.00061% $26.2k

7.7yrs

Average Tenure

52yo

Average Age

Experienced Management: RXN's management team is seasoned and experienced (7.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Todd Adams
President10.4yrsUS$6.77m0.40% $17.2m
Paul Jones
Independent Non-Executive Chairman4.6yrsUS$250.00k0.041% $1.8m
John Stroup
Independent Director11.3yrsUS$200.00k0.026% $1.1m
Thomas Christopoul
Independent Director7yrsUS$200.00k0.030% $1.3m
George Moore
Independent Director5yrsUS$190.00k0.014% $617.7k
Theodore Crandall
Independent Director4.3yrsUS$190.00k0.0051% $218.4k
David Longren
Independent Director4yrsUS$190.00k0.010% $435.5k
Robin Walker-Lee
Independent Director4.6yrsUS$190.00k0.0025% $108.3k
Mark Bartlett
Independent Director7.7yrsUS$205.00k0.0029% $123.4k
Rosemary Schooler
Independent Director0.8yrsno datano data

4.8yrs

Average Tenure

62yo

Average Age

Experienced Board: RXN'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: RXN insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.8%.


Top Shareholders

Company Information

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


Key Information

  • Name: Rexnord Corporation
  • Ticker: RXN
  • Exchange: NYSE
  • Founded: 2006
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Market Cap: US$4.299b
  • Shares outstanding: 121.81m
  • Website: https://www.rexnordcorporation.com

Number of Employees


Location

  • Rexnord Corporation
  • 511 West Freshwater Way
  • Milwaukee
  • Wisconsin
  • 53204
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RXNNYSE (New York Stock Exchange)YesCommon StockUSUSDMar 2012
4RXDB (Deutsche Boerse AG)YesCommon StockDEEURMar 2012

Biography

Rexnord Corporation designs, manufactures, and markets process and motion control, and water management products worldwide. It operates in two segments, Process & Motion Control Platform and Water Management Platform. The company offers table top conveying chain and related accessories, metal conveying and engineered woven metals, gearing and gear drives, conveying equipment, industrial chain, and custom assemblies; custom-engineered, application-specific miniature gearboxes, and motion control assemblies and components used in aerospace, defense, medical equipment, robotics, semiconductor, instrumentation, and satellite communications; and shaft management products, including couplings, torque limiters, electromagnetic clutches and brakes, industrial bearings, and shaft locking assemblies. It also provides aerospace components for use in door systems, engine accessories and controls, engine mounts, flight control systems, gearboxes, landing gears, and rotor pitch controls. In addition, the company offers valve, distribution and drainage, and site work products; water conservation products; and commercial electric hand dryers. It sells products through distribution partners, independent sales representatives, plumbing wholesalers, industry-specific distributors, and sales agencies to commercial construction, institutional, infrastructure, and residential construction end market, as well as to original equipment manufacturers and end users. The company offers its products under the Rexnord, Rex, Addax, Euroflex, Falk, FlatTop, Cambridge, Link-Belt, Omega, PSI, Shafer, Stearns, Highfield, Thomas, Centa, and Tollok, Zurn, Wilkins, Green Turtle, and World Dryer, Aquaflush, AquaSense, AquaVantage, AquaSpec, EcoVantage, Zurn One, and Zurn One Systems names. Rexnord Corporation was incorporated in 2006 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 Analysis2020/02/18 00:48
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
Annual Earnings2019/03/31


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.