TE Connectivity (NYSE:TEL) - Share price, News & Analysis

Q: What is the Fair Price of TEL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

TEL ($110.36) is trading below our estimate of [[fair value]] ($177.8)

TEL fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	2/6
Past Performance	6/6
Financial Health	6/6
Dividends	5/6

TEL Stock Overview

TE Connectivity Ltd., together with its subsidiaries, manufactures and sells connectivity and sensor solutions in Europe, the Middle East, Africa, the Asia–Pacific, and the Americas.

Rewards

Trading at 37.9% below our estimate of its fair value

Earnings are forecast to grow 6.55% per year

Earnings grew by 49.4% over the past year

Pays a reliable dividend of 2.03%

Trading below our calculated fair Price-To-Earnings ratio

Analysts in good agreement that stock price will rise by 31.8%

Risk Analysis

Significant insider selling over the past 3 months

TE Connectivity Competitors

Jabil

NYSE:JBL

US$7.9b

Flex

NasdaqGS:FLEX

US$7.6b

IPG Photonics

NasdaqGS:IPGP

US$4.2b

Fabrinet

NYSE:FN

US$3.5b

Price History & Performance

Summary of all time highs, changes and price drops for TE Connectivity
Historical stock prices
Current Share Price	US$114.32
52 Week High	US$166.44
52 Week Low	US$107.12
Beta	1.31
1 Month Change	-7.73%
3 Month Change	2.56%
1 Year Change	-18.51%
3 Year Change	29.18%
5 Year Change	32.58%
Change since IPO	194.26%

Recent News & Updates

Oct 02

Is It Too Late To Consider Buying TE Connectivity Ltd. (NYSE:TEL)?

Let's talk about the popular TE Connectivity Ltd. ( NYSE:TEL ). The company's shares saw significant share price...

Sep 18

TE Connectivity (NYSE:TEL) Shareholders Will Want The ROCE Trajectory To Continue

To find a multi-bagger stock, what are the underlying trends we should look for in a business? Amongst other things...

Sep 04

TE Connectivity (NYSE:TEL) Seems To Use Debt Quite Sensibly

The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says...

Shareholder Returns

	TEL	US Electronic	US Market
7D	0.8%	-2.2%	-2.5%
1Y	-18.5%	-24.1%	-23.2%

Return vs Industry: TEL exceeded the US Electronic industry which returned -24.1% over the past year.

Return vs Market: TEL exceeded the US Market which returned -23.2% over the past year.

Price Volatility

Is TEL's price volatile compared to industry and market?
TEL volatility
TEL Average Weekly Movement	4.0%
Electronic Industry Average Movement	6.7%
Market Average Movement	6.8%
10% most volatile stocks in US Market	15.5%
10% least volatile stocks in US Market	2.8%

Stable Share Price: TEL is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: TEL's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2000	89,000	Terrence Curtin	https://www.te.com

TE Connectivity Ltd., together with its subsidiaries, manufactures and sells connectivity and sensor solutions in Europe, the Middle East, Africa, the Asia–Pacific, and the Americas. The company operates through three segments: Transportation Solutions, Industrial Solutions, and Communications Solutions. The Transportation Solutions segment provides terminals and connector systems and components, sensors, relays, antennas, heat shrink tubing, and application tooling products for use in the automotive, commercial transportation, and sensor markets.

TE Connectivity Fundamentals Summary

How do TE Connectivity's earnings and revenue compare to its market cap?
TEL fundamental statistics
Market Cap	US$36.56b
Earnings (TTM)	US$2.51b
Revenue (TTM)	US$15.74b

14.5x

P/E Ratio

2.3x

P/S Ratio

Is TEL overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
TEL income statement (TTM)
Revenue	US$15.74b
Cost of Revenue	US$10.57b
Gross Profit	US$5.17b
Other Expenses	US$2.66b
Earnings	US$2.51b

Last Reported Earnings

Jun 24, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	7.86
Gross Margin	32.87%
Net Profit Margin	15.96%
Debt/Equity Ratio	39.9%

How did TEL perform over the long term?

See historical performance and comparison

Dividends

2.0%

Current Dividend Yield

27%

Payout Ratio

Does TEL pay a reliable dividends?

See TEL dividend history and benchmarks

When do you need to buy TEL by to receive an upcoming dividend?
TE Connectivity dividend dates
Ex Dividend Date	Nov 17 2022
Dividend Pay Date	Dec 02 2022
Days until Ex dividend	44 days
Days until Dividend pay date	59 days

Does TEL pay a reliable dividends?

See TEL dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is TEL undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for TEL?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for TEL. This is calculated by dividing TEL's market cap by their current preferred multiple.
What is TEL's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$36.56b

TEL key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	2.5x
Enterprise Value/EBITDA	10.8x
PEG Ratio	2.2x

Price to Earnings Ratio vs Peers

How does TEL's PE Ratio compare to its peers?

TEL PE Ratio vs Peers

The above table shows the PE ratio for TEL vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	12.8x
JBL Jabil	8x	3.7%	US$7.9b
FLEX Flex	8.3x	3.9%	US$7.6b
IPGP IPG Photonics	15.9x	12.4%	US$4.2b
FN Fabrinet	17.4x	n/a	US$3.5b
TEL TE Connectivity	14x	6.5%	US$35.3b

Price-To-Earnings vs Peers: TEL is expensive based on its Price-To-Earnings Ratio (14x) compared to the peer average (12.4x).

Price to Earnings Ratio vs Industry

How does TEL's PE Ratio compare vs other companies in the US Electronic Industry?

Price-To-Earnings vs Industry: TEL is good value based on its Price-To-Earnings Ratio (14x) compared to the US Electronic industry average (14.1x)

Price to Earnings Ratio vs Fair Ratio

What is TEL's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

TEL PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	14.5x
Fair PE Ratio	21.7x

Price-To-Earnings vs Fair Ratio: TEL is good value based on its Price-To-Earnings Ratio (14x) compared to the estimated Fair Price-To-Earnings Ratio (21.6x).

Share Price vs Fair Value

What is the Fair Price of TEL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: TEL ($110.36) is trading below our estimate of fair value ($177.8)

Significantly Below Fair Value: TEL is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Future Growth

How is TE Connectivity forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

6.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: TEL's forecast earnings growth (6.5% per year) is above the savings rate (1.9%).

Earnings vs Market: TEL's earnings (6.5% per year) are forecast to grow slower than the US market (14.8% per year).

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

Revenue vs Market: TEL's revenue (5.1% per year) is forecast to grow slower than the US market (7.7% per year).

High Growth Revenue: TEL's revenue (5.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: TEL's Return on Equity is forecast to be high in 3 years time (22.6%)

Discover growth companies

Past Performance

How has TE Connectivity performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

0.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: TEL has high quality earnings.

Growing Profit Margin: TEL's current net profit margins (16%) are higher than last year (11.7%).

Past Earnings Growth Analysis

Earnings Trend: TEL's earnings have grown by 0.4% per year over the past 5 years.

Accelerating Growth: TEL's earnings growth over the past year (49.4%) exceeds its 5-year average (0.4% per year).

Earnings vs Industry: TEL earnings growth over the past year (49.4%) exceeded the Electronic industry 20.1%.

Return on Equity

High ROE: TEL's Return on Equity (23.8%) is considered high.

Discover strong past performing companies

Financial Health

How is TE Connectivity's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: TEL's short term assets ($7.6B) exceed its short term liabilities ($5.1B).

Long Term Liabilities: TEL's short term assets ($7.6B) exceed its long term liabilities ($5.8B).

Debt to Equity History and Analysis

Debt Level: TEL's net debt to equity ratio (32.1%) is considered satisfactory.

Reducing Debt: TEL's debt to equity ratio has reduced from 43.7% to 39.9% over the past 5 years.

Debt Coverage: TEL's debt is well covered by operating cash flow (54.7%).

Interest Coverage: TEL's interest payments on its debt are well covered by EBIT (58.5x coverage).

Balance Sheet

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Dividend

What is TE Connectivity current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

1.96%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

TE Connectivity Dividend Yield vs Market

How does TE Connectivity dividend yield compare to the market?
Segment	Dividend Yield
Company (TE Connectivity)	2.0%
Market Bottom 25% (US)	1.7%
Market Top 25% (US)	4.7%
Industry Average (Electronic)	1.8%
Analyst forecast in 3 Years (TE Connectivity)	1.9%

Notable Dividend: TEL's dividend (2.03%) is higher than the bottom 25% of dividend payers in the US market (1.67%).

High Dividend: TEL's dividend (2.03%) is low compared to the top 25% of dividend payers in the US market (4.73%).

Stability and Growth of Payments

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

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

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (26.6%), TEL's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (47.6%), TEL's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

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

8.8yrs

Average management tenure

CEO

Terrence Curtin (54 yo)

6.58yrs

Tenure

US$14,715,856

Compensation

Mr. Terrence R. Curtin is the Chief Executive Officer of TE Connectivity Ltd. since March 08, 2017. Mr. Curtin served as the President of TE Connectivity Ltd.since March 10, 2015. He was responsible for a...

CEO Compensation Analysis

Terrence Curtin's Compensation vs TE Connectivity Earnings

How has Terrence Curtin's remuneration changed compared to TE Connectivity's earnings?
Date	Total Comp.	Salary	Company Earnings
Jun 24 2022	n/a	n/a	US$3b
Mar 25 2022	n/a	n/a	US$3b
Dec 24 2021	n/a	n/a	US$2b
Sep 24 2021	US$15m	US$1m	US$2b
Jun 25 2021	n/a	n/a	US$2b
Mar 26 2021	n/a	n/a	US$1b
Dec 25 2020	n/a	n/a	US$93m
Sep 25 2020	US$11m	US$1m	-US$259m
Jun 26 2020	n/a	n/a	-US$111m
Mar 27 2020	n/a	n/a	US$705m
Dec 27 2019	n/a	n/a	US$2b
Sep 27 2019	US$9m	US$1m	US$2b
Jun 28 2019	n/a	n/a	US$3b
Mar 29 2019	n/a	n/a	US$3b
Dec 28 2018	n/a	n/a	US$3b
Sep 28 2018	US$10m	US$1m	US$3b
Jun 29 2018	n/a	n/a	US$1b
Mar 30 2018	n/a	n/a	US$1b
Dec 29 2017	n/a	n/a	US$1b
Sep 29 2017	US$10m	US$1m	US$2b
Jun 30 2017	n/a	n/a	US$2b
Mar 31 2017	n/a	n/a	US$2b
Dec 30 2016	n/a	n/a	US$2b
Sep 30 2016	US$5m	US$825k	US$2b

Compensation vs Market: Terrence's total compensation ($USD14.72M) is about average for companies of similar size in the US market ($USD13.04M).

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

Leadership Team

Experienced Management: TEL's management team is seasoned and experienced (8.8 years average tenure).

Board Members

Experienced Board: TEL's board of directors are considered experienced (6.6 years average tenure).

Ownership

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

Insider Trading Volume

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

Recent Insider Transactions

NYSE:TEL Recent Insider Transactions by Companies or Individuals
Date	Value	Name	Entity	Role	Shares	Max Price
03 Aug 22	SellUS$394,590	John Jenkins	Individual		2,990	US$131.97
06 May 22	SellUS$1,598,499	Thomas Lynch	Individual		12,600	US$126.87

Ownership Breakdown

What is the ownership structure of TEL?
Owner Type	Number of Shares	Ownership Percentage
Private Companies	2,694	0.0008%
Individual Insiders	633,975	0.2%
General Public	18,118,500	5.7%
Institutions	301,083,799	94.1%

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

Top Shareholders

Top 25 shareholders own 64.6% of the company

Ownership	Name	Shares	Current Value	Change %	Portfolio %
8.7%	The Vanguard Group, Inc.	27,836,048	$3.2b	0.78%	0.07%
7.89%	T. Rowe Price Group, Inc.	25,220,247	$2.9b	32.51%	0.34%
6.5%	BlackRock, Inc.	20,786,708	$2.4b	-0.75%	0.06%
5.99%	Capital Research and Management Company	19,170,241	$2.2b	-7.13%	0.15%
5.34%	Dodge & Cox	17,088,935	$2.0b	0.17%	1.12%
3.72%	State Street Global Advisors, Inc.	11,913,786	$1.4b	-2.97%	0.08%
3.36%	ClearBridge Investments, LLC	10,756,755	$1.2b	-2.94%	1.12%
2.52%	Harris Associates L.P.	8,047,140	$919.9m	-1.72%	1.2%
2.23%	Janus Henderson Group plc	7,128,836	$815.0m	0.6%	0.46%
2.08%	Columbia Management Investment Advisers, LLC	6,655,240	$760.8m	-12.52%	0.22%
1.86%	Norges Bank Investment Management	5,955,866	$680.9m	0%	0.09%
1.6%	Geode Capital Management, LLC	5,113,851	$584.6m	2.42%	0.08%
1.46%	Massachusetts Financial Services Company	4,676,925	$534.7m	-0.53%	0.14%
1.29%	EdgePoint Investment Group Inc.	4,137,596	$473.0m	16.26%	2.75%
1.26%	Wellington Management Group LLP	4,024,617	$460.1m	-9.95%	0.08%
1.25%	Boston Partners Global Investors, Inc.	3,990,038	$456.1m	-3.48%	0.38%
0.96%	Invesco Ltd.	3,059,937	$349.8m	11.77%	0.12%
0.91%	Northern Trust Global Investments	2,895,882	$331.1m	-1.41%	0.07%
0.89%	Impax Asset Management Group plc	2,848,923	$325.7m	0.5%	1.06%
0.89%	First Pacific Advisors, LP	2,833,669	$323.9m	2.78%	3.89%
0.86%	Deutsche Asset & Wealth Management	2,763,352	$315.9m	-1.54%	0.13%
0.81%	Legal & General Investment Management Limited	2,581,294	$295.1m	-0.39%	0.09%
0.75%	Dimensional Fund Advisors LP	2,401,873	$274.6m	0.51%	0.07%
0.74%	Teachers Insurance and Annuity Association-College Retirement Equities Fund	2,380,182	$272.1m	1.55%	0.09%
0.73%	UBS Asset Management	2,343,810	$267.9m	-4.86%	0.05%

Ticker	Exchange	Primary Security	Security Type	Country	Currency	Listed on
TEL	NYSE (New York Stock Exchange)	Yes	Registered Shares	US	USD	Jun 2007
TEL N	BMV (Bolsa Mexicana de Valores)	Yes	Registered Shares	MX	MXN	Jun 2007
T1EL34	BOVESPA (Bolsa de Valores de Sao Paulo)		BDR EACH 2 REPR 1 SHS UNSPON	BR	BRL	Jan 2020

Data	Last Updated (UTC time)
Company Analysis	2022/10/03 00:00
End of Day Share Price	2022/10/03 00:00
Earnings	2022/06/24
Annual Earnings	2021/09/24