NYSE:TDG

Stock Analysis Report

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Executive Summary

TransDigm Group Incorporated designs, produces, and supplies aircraft components in the United States and internationally.


Snowflake Analysis

Unattractive dividend payer with questionable track record.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: TDG's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

2.1%

TDG

-1.4%

US Aerospace & Defense

2.5%

US Market


1 Year Return

-16.9%

TDG

-26.4%

US Aerospace & Defense

15.9%

US Market

Return vs Industry: TDG exceeded the US Aerospace & Defense industry which returned -25.9% over the past year.

Return vs Market: TDG underperformed the US Market which returned 14.9% over the past year.


Shareholder returns

TDGIndustryMarket
7 Day2.1%-1.4%2.5%
30 Day-1.4%0.2%5.8%
90 Day36.5%2.7%18.2%
1 Year-6.9%-16.9%-12.3%-26.4%18.4%15.9%
3 Year85.7%52.6%7.5%-14.7%39.9%30.9%
5 Year144.1%83.5%50.2%12.5%72.9%54.2%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

34.11x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: TDG ($436.01) is trading above our estimate of fair value ($331.37)

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


Price To Earnings Ratio

PE vs Industry: TDG is poor value based on its PE Ratio (34.1x) compared to the US Aerospace & Defense industry average (20.4x).

PE vs Market: TDG is poor value based on its PE Ratio (34.1x) compared to the US market (17.8x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: TDG has negative assets, so we can't compare its PB Ratio to the US Aerospace & Defense industry average.


Next Steps

Future Growth

How is TransDigm Group forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

12.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TDG's forecast earnings growth (12.4% per year) is above the savings rate (2.2%).

Earnings vs Market: TDG's earnings (12.4% per year) are forecast to grow slower than the US market (22.3% per year).

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

Revenue vs Market: TDG's revenue (3.5% per year) is forecast to grow slower than the US market (9.3% per year).

High Growth Revenue: TDG's revenue (3.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

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


Next Steps

Past Performance

How has TransDigm Group performed over the past 5 years?

14.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TDG has high quality earnings.

Growing Profit Margin: TDG's current net profit margins (12.2%) are lower than last year (19.6%).


Past Earnings Growth Analysis

Earnings Trend: TDG's earnings have grown by 14.6% per year over the past 5 years.

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

Earnings vs Industry: TDG had negative earnings growth (-11.4%) over the past year, making it difficult to compare to the Aerospace & Defense industry average (-0.2%).


Return on Equity

High ROE: TDG's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Next Steps

Financial Health

How is TransDigm Group's financial position?


Financial Position Analysis

Short Term Liabilities: TDG has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: TDG has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: TDG has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: TDG's has negative shareholder equity, so we do not need to check if its debt has reduced over time.

Debt Coverage: TDG's debt is not well covered by operating cash flow (6.1%).

Interest Coverage: TDG's interest payments on its debt are not well covered by EBIT (2.4x coverage).


Balance Sheet


Next Steps

Dividend

What is TransDigm Group current dividend yield, its reliability and sustainability?

7.45%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: TDG's dividend (7.45%) is higher than the bottom 25% of dividend payers in the US market (1.66%).

High Dividend: TDG's dividend (7.45%) is in the top 25% of dividend payers in the US market (4.51%)


Stability and Growth of Payments

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

Growing Dividend: Too early to tell if TDG'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: TDG is not forecast to pay a dividend in 3 years.


Next Steps

Management

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

2.2yrs

Average management tenure


CEO

Kevin Stein (54 yo)

2.33yrs

Tenure

US$13,135,200

Compensation

Dr. Kevin M. Stein, Ph.D., has been President and Chief Executive Officer of TransDigm Group Incorporated since January 2017 and April 25, 2018 respectively. Prior to that, Dr. Stein served as President an ...


CEO Compensation Analysis

Compensation vs Market: Kevin's total compensation ($USD13.14M) is about average for companies of similar size in the US market ($USD11.35M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Walter Howley
Executive Chairman of the Board17.08yrsUS$60.64m0.049%
$ 11.7m
Kevin Stein
President2.33yrsUS$13.14m0.015%
$ 3.6m
Michael Lisman
Chief Financial Officer2.08yrsUS$14.32m0.0027%
$ 636.6k
Bernt Iversen
Executive Vice President of Mergers & Acquisitions and Business Development8.25yrsUS$18.30m0.0093%
$ 2.2m
Robert Henderson
Vice Chairmanno dataUS$24.43m0.046%
$ 10.9m
Jorge Valladares
Chief Operating Officer1.33yrsUS$6.76m0.020%
$ 4.8m
Sarah Wynne
Chief Accounting Officer1.75yrsno data0.0011%
$ 271.1k
Liza Sabol
Director of Investor Relationsno datano datano data
Halle Terrion
General Counselno datano data0.0016%
$ 381.9k
Peter Palmer
Executive Vice President8.5yrsUS$2.12mno data
Joel Reiss
Executive Vice President4.83yrsUS$4.98mno data
Paula Wheeler
Executive Vice President1.58yrsno datano data

2.2yrs

Average Tenure

52yo

Average Age

Experienced Management: TDG's management team is considered experienced (2.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Walter Howley
Executive Chairman of the Board17.08yrsUS$60.64m0.049%
$ 11.7m
Kevin Stein
President2.33yrsUS$13.14m0.015%
$ 3.6m
David Barr
Independent Director2.83yrsUS$116.40k0.058%
$ 13.8m
Robert Small
Independent Director10.42yrsUS$536.92k0.19%
$ 44.1m
Gary McCullough
Independent Director2.83yrsUS$116.40k0.0011%
$ 259.3k
Sean Hennessy
Independent Director14.33yrsUS$386.92k0.063%
$ 14.7m
Mervin Dunn
Independent Director12.92yrsUS$376.92k0.0028%
$ 657.8k
Raymond Laubenthal
Independent Director4.67yrsUS$116.40k0.45%
$ 105.5m
John Staer
Independent Director8.58yrsUS$344.92k0.00017%
$ 40.1k
Michael Graff
Independent Director17.08yrsUS$148.68k0.042%
$ 9.9m
Michele Santana
Independent Director2.33yrsUS$315.14k0.00038%
$ 89.6k

8.6yrs

Average Tenure

61yo

Average Age

Experienced Board: TDG's board of directors are considered experienced (8.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: TDG 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

TransDigm Group Incorporated's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: TransDigm Group Incorporated
  • Ticker: TDG
  • Exchange: NYSE
  • Founded: 1993
  • Industry: Aerospace and Defense
  • Sector: Capital Goods
  • Market Cap: US$23.576b
  • Shares outstanding: 54.07m
  • Website: https://www.transdigm.com

Number of Employees


Location

  • TransDigm Group Incorporated
  • The Tower at Erieview
  • Suite 3000
  • Cleveland
  • Ohio
  • 44114
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TDGNYSE (New York Stock Exchange)YesCommon StockUSUSDMar 2006
T7DDB (Deutsche Boerse AG)YesCommon StockDEEURMar 2006
TDGSWX (SIX Swiss Exchange)YesCommon StockCHCHFMar 2006
0REKLSE (London Stock Exchange)YesCommon StockGBUSDMar 2006
TDG *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNMar 2006
T1DG34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 10 REPR 1 COMBRBRLJan 2020

Biography

TransDigm Group Incorporated designs, produces, and supplies aircraft components in the United States and internationally. The company operates through three segments: Power & Control, Airframe, and Non-av ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/08/04 00:52
End of Day Share Price2020/08/03 00:00
Earnings2020/03/28
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.