NYSE:TEL

Stock Analysis Report

Executive Summary

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


Snowflake Analysis

Excellent balance sheet established dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

14.8%

TEL

10.0%

US Electronic

12.5%

US Market


1 Year Return

-25.0%

TEL

-21.6%

US Electronic

-12.7%

US Market

Return vs Industry: TEL underperformed the US Electronic industry which returned -21.6% over the past year.

Return vs Market: TEL underperformed the US Market which returned -12.7% over the past year.


Shareholder returns

TELIndustryMarket
7 Day14.8%10.0%12.5%
30 Day-24.2%-18.7%-14.7%
90 Day-34.5%-29.8%-21.5%
1 Year-23.4%-25.0%-20.8%-21.6%-10.9%-12.7%
3 Year-9.6%-14.8%-0.8%-3.6%12.6%5.4%
5 Year-2.2%-11.8%22.2%16.1%31.9%17.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

31.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TEL ($62.78) is trading below our estimate of fair value ($91.11)

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


Price To Earnings Ratio

PE vs Industry: TEL is good value based on its PE Ratio (13.3x) compared to the Electronic industry average (14.4x).

PE vs Market: TEL is poor value based on its PE Ratio (13.3x) compared to the US market (13x).


Price to Earnings Growth Ratio

PEG Ratio: TEL is good value based on its PEG Ratio (0.7x)


Price to Book Ratio

PB vs Industry: TEL is overvalued based on its PB Ratio (2x) compared to the US Electronic industry average (1.5x).


Next Steps

Future Growth

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

20.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TEL's forecast earnings growth (20.3% per year) is above the savings rate (1.7%).

Earnings vs Market: TEL's earnings (20.3% per year) are forecast to grow faster than the US market (12.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: TEL's revenue (6% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: TEL's revenue (6% 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 low in 3 years time (17.9%).


Next Steps

Past Performance

How has TE Connectivity performed over the past 5 years?

10.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TEL has high quality earnings.

Growing Profit Margin: TEL's current net profit margins (12%) are lower than last year (21.4%).


Past Earnings Growth Analysis

Earnings Trend: TEL's earnings have grown by 10.5% per year over the past 5 years.

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

Earnings vs Industry: TEL had negative earnings growth (-47.1%) over the past year, making it difficult to compare to the Electronic industry average (3.2%).


Return on Equity

High ROE: TEL's Return on Equity (15%) is considered low.


Next Steps

Financial Health

How is TE Connectivity's financial position?


Financial Position Analysis

Short Term Liabilities: TEL's short term assets ($5.6B) exceed its short term liabilities ($3.4B).

Long Term Liabilities: TEL's short term assets ($5.6B) do not cover its long term liabilities ($6.0B).


Debt to Equity History and Analysis

Debt Level: TEL's debt to equity ratio (37.7%) is considered satisfactory.

Reducing Debt: TEL's debt to equity ratio has reduced from 46% to 37.7% over the past 5 years.

Debt Coverage: TEL's debt is well covered by operating cash flow (63.6%).

Interest Coverage: TEL's interest payments on its debt are well covered by EBIT (66.8x coverage).


Balance Sheet

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

Debt Coverage by Assets: TEL's debt is covered by short term assets (assets are 1.4x debt).


Next Steps

Dividend

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

2.93%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: TEL's dividend (2.93%) is higher than the bottom 25% of dividend payers in the US market (1.98%).

High Dividend: TEL's dividend (2.93%) is low compared to the top 25% of dividend payers in the US market (5.49%).


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.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (38.6%), TEL's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TEL's dividends in 3 years are forecast to be well covered by earnings (29% payout ratio).


Next Steps

Management

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

3.5yrs

Average management tenure


CEO

Terrence Curtin (51yo)

3s

Tenure

US$9,291,836

Compensation

Mr. Terrence R. Curtin is the Chief Executive Officer and Board Member, TE Connectivity. Mr. Curtin served as the President of TE Connectivity Ltd. since March 10, 2015. He was responsible for all of TE's  ...


CEO Compensation Analysis

Compensation vs Market: Terrence's total compensation ($USD9.29M) is about average for companies of similar size in the US market ($USD11.74M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Terrence Curtin
CEO & Director3yrsUS$9.29m0.028% $6.0m
Heath Mitts
Executive VP & CFO3.5yrsUS$3.55m0.0032% $662.9k
John Jenkins
Executive VP & General Counsel7.42yrsUS$2.47m0.0085% $1.8m
Kevin Rock
President of Industrial Solutionsno dataUS$2.33m0.025% $5.2m
Steven Merkt
President of Transportation Solutionsno dataUS$3.25m0.011% $2.3m
Joel Dubs
Senior Vice President of Operations2.42yrsno datano data
Joseph Eckroth
Chief Information Officer & Senior VP6.25yrsno datano data
Sujal Shah
Vice President of Investor Relationsno datano datano data
Kari Janavitz
VP & Chief Marketing Officer2.17yrsno datano data
Timothy Murphy
Senior VP & Chief Human Resources Officer4yrsno data0.0054% $1.1m

3.5yrs

Average Tenure

51yo

Average Age

Experienced Management: TEL's management team is considered experienced (3.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Terrence Curtin
CEO & Director3yrsUS$9.29m0.028% $6.0m
Pierre Brondeau
Lead Independent Director5.25yrsUS$327.53k0.011% $2.3m
Thomas Lynch
Chairman of the Board7.17yrsUS$551.22k0.057% $12.0m
Daniel Phelan
Independent Director12.75yrsUS$307.94k0.0096% $2.0m
Carol Davidson
Independent Director4yrsUS$292.53k0.0036% $744.7k
Laura Wright
Independent Director6yrsUS$307.53k0.0037% $767.8k
Abhijit Talwalkar
Independent Director3yrsUS$286.69k0.0022% $461.5k
Nam Yong
Independent Director8yrsUS$272.53k0.0053% $1.1m
Mark Trudeau
Independent Director4yrsUS$276.69k0.0025% $518.1k
William Jeffrey
Independent Director8yrsUS$282.53k0.0054% $1.1m

5.6yrs

Average Tenure

60yo

Average Age

Experienced Board: TEL's board of directors are considered experienced (5.6 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: TEL insiders have sold more shares than they have bought 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

TE Connectivity Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: TE Connectivity Ltd.
  • Ticker: TEL
  • Exchange: NYSE
  • Founded: 2000
  • Industry: Electronic Manufacturing Services
  • Sector: Tech
  • Market Cap: US$20.977b
  • Shares outstanding: 334.14m
  • Website: https://www.te.com

Number of Employees


Location

  • TE Connectivity Ltd.
  • Mühlenstrasse 26
  • Schaffhausen
  • Schaffhausen
  • 8200
  • Switzerland

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
9TCDB (Deutsche Boerse AG)YesRegistered SharesDEEURJun 2007
TELNYSE (New York Stock Exchange)YesRegistered SharesUSUSDJun 2007
TEL NBMV (Bolsa Mexicana de Valores)YesRegistered SharesMXMXNJun 2007
0VQJLSE (London Stock Exchange)YesRegistered SharesGBUSDJun 2007

Biography

TE Connectivity Ltd., together with its subsidiaries, manufactures and sells connectivity and sensors 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, antennas, relays, application tooling, wires, and heat shrink tubing products for use in the automotive, commercial transportation, and sensor markets. The Industrial Solutions segment offers terminals and connector systems and components; heat shrink tubing; relays; and wires and cables for industrial equipment, aerospace, defense, oil and gas, and energy markets. The Communications Solutions segment supplies electronic components, such as terminals and connector systems and components, relays, heat shrink tubing, and antennas for the data and devices, and appliances markets. TE Connectivity Ltd. sells its products to approximately 140 countries primarily through direct selling to manufacturers, as well as through third-party distributors. The company was formerly known as Tyco Electronics Ltd. and changed its name to TE Connectivity Ltd. in March 2011. TE Connectivity Ltd. was incorporated in 2000 and is based in Schaffhausen, Switzerland. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/30 03:24
End of Day Share Price2020/03/27 00:00
Earnings2019/12/27
Annual Earnings2019/09/27


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.