ETN  Eaton Corporation

Exchange

NYSE

Sector

Technology

Industry

Industrial Machinery/Components

Market Cap.

34.74B

Vuru Grade

53.95/100

Current Price

$78.10
+0.04 (+0.05%)

Growth Price

$75.75
Fairly valued

Stability Price

$10.64
Overvalued by 86.38%

Company Metrics

  • P/E 17.9
  • P/S 1.75
  • P/B 2.23
  • EPS 4.36
  • Cash ROIC 5.94%
  • Cash Ratio 0.14
  • Dividend 2.4 / 3.07%
  • Avg. Vol. 2.43M
  • Shares 444.81M
  • Market Cap. 34.74B

Company Description

Eaton Corporation operates as a power management company worldwide. It provides electrical components and systems for power quality, distribution, and control; hydraulics components, systems, and services for industrial and mobile equipment; aerospace fuel, hydraulics, and pneumatic systems for commercial and military use; and truck and automotive drivetrain, and powertrain systems for performance... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Capital International LTD Lowered Eaton Plc (ETN) Position By $485100; Aurubis ...
NormanObserver.com - 8 hours ago
Eaton Corp Plc now has $34.74B valuation. The stock increased 0.05% or $0.04 on September 22, reaching $78.1. About 1.62 million shares traded.
Tricadia Capital Management Raised Amc Entmt Hldgs (AMC) Position By $567600 ...
Key Gazette - 27 minutes ago
Eaton Corp Plc now has $34.74 billion valuation. The stock increased 0.05% or $0.04 on September 22, reaching $78.1. About 1.62M shares traded.
Aramark (ARMK) Shareholder Thornburg Investment Management Cut Its Position by ... - BZ Weekly
Eaton Corp (NYSE:ETN) Institutional Investor Sentiment Analysis
WeeklyHub - Sep 21, 2017
Eaton Corp (NYSE:ETN) institutional sentiment decreased to 1.07 in Q2 2017. Its down -0.06, from 1.13 in 2017Q1. The ratio has dropped, as 348 investment professionals opened new or increased stock positions, while 326 sold and reduced holdings in ...
Eaton Corporation, PLC Ordinary (NYSE:ETN) Closed 6.9% Above Its 50 Day Average - Modern Readers
Seaward Management Limited Partnership Lowered Cardinal Health (CAH) Stake By ... - MoneyMakingArticles
Eaton Corporation, PLC Ordinary (NYSE:ETN) Experiences Lighter than Average ...
Highlight Press - Sep 21, 2017
There has been some selling insider activity on Eaton Corporation, PLC Ordinary (NYSE:ETN) recently. Deborah L. Mccoy, Director disclosed the sale of 6,450 shares of (ETN). The shares were purchased at an average price of $73.17. The Director now owns ...
Will Eaton Corporation Plc Ord (NYSE:ETN) Run Out of Steam Soon? Short ...
BZ Weekly - Sep 18, 2017
Investors sentiment increased to 1.17 in Q4 2016. Its up 0.10, from 1.07 in 2016Q3. It increased, as 55 investors sold Eaton Corporation, PLC Ordinary Shares shares while 253 reduced holdings. 86 funds opened positions while 273 raised stakes. 328.69 ...
Eaton Corporation, PLC (ETN) Expected to Post Earnings of $1.26 Per Share
Newburgh Gazette - Aug 26, 2017
The stock decreased 0.94% or $0.41 on August 25, reaching $43.31. About shares traded. Eaton Corporation, PLC Ordinary Shares (NYSE:ETN) has risen 31.02% since August 25, 2016 and is uptrending. Gilead Sciences, Inc. (NASDAQ:GILD) has declined ...
Eaton Corporation, PLC Ordinary (NYSE:ETN) Traded -6.7% Below Its 50 Day ... - Highlight Press
Tetrem Capital Management LTD Has Upped Its Eaton Plc (ETN) Holding; Insys ... - Herald KS
American Airlines Group (AAL) Got Higher Raymond James Rating; Eaton Plc Ord ...
UtahHerald.com - Sep 20, 2017
Eaton Corporation Plc Ord (NYSE:ETN) had a decrease of 3.21% in short interest. ETN's SI was 6.68 million shares in September as released by FINRA. Its down 3.21% from 6.90M shares previously. With 2.27M avg volume, 3 days are for Eaton Corporation ...
Hamlin Capital Management Has Cut Eaton Plc (ETN) Position by $33.71 Million ...
FlintDaily.com - 5 hours ago
About 1.62M shares traded. Eaton Corporation, PLC Ordinary Shares (NYSE:ETN) has risen 31.02% since September 24, 2016 and is uptrending.
Caprock Group Boosted Position in Wesco Aircraft Hldgs (WAIR) by $352560 as ...
BZ Weekly - 1 hour ago
330.85 million shares or 0.85% less from 333.69 million shares in 2017Q1 were reported. Bb&T Ltd Liability holds 200,542 shares or 0.23% of its portfolio.
Eaton Corporation, PLC Ordinary (NYSE:ETN) Stock Closed -7.0% Below Its 50 Day ...
First News 24 - Aug 30, 2017
Investors are feeling more bullish on shares of Eaton Corporation, PLC Ordinary of late if you take note of the downtick in short interest.
This is what analysts have to say about Eaton Corporation, PLC Ordinary Shares ... - WeeklyHub
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for ETN to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate ETN's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$78.10 Current Price

$75.75 Growth Price (DCF)

Fairly valued


Growth Rate Assumed by Market: 10.15%


Future Free Cash Flow Growth Rate: 8.8%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$10.64 Stability Price (EPV)

Overvalued by 86.38%


Discount Rate: 15.0%

$51.70 Book Price

Overvalued by 33.80%


Poor Cash Return on Invested Capital over the past 5 years

ETN has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

ETN has only created $5.94 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 1.07B 1.67B 1.25B 1.87B 2.06B
divided by
Invested Capital 29.31B 28.87B 27.15B 25.96B 24.19B
Cash ROIC 3.65% 5.79% 4.59% 7.18% 8.50%

Growing Return on Equity over the past 5 years

ETN has been growing returns with capital that shareholders have invested. This is a positive sign and demonstrates that both the business and management performance are improving over time.

ETN has generated $11.33 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 1.22B 1.87B 1.80B 1.98B 1.93B
divided by
Stockholders' Equity 15.09B 16.79B 15.79B 15.19B 14.90B
Return on Equity 8.09% 11.15% 11.42% 13.04% 12.92%

Excellent Business Performance over the past 10 years

ETN has been able to maintain profitability in good times and bad. This could mean ETN has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

ETN has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 807.00M 968.00M 1.21B 888.00M 680.00M 1.07B 1.67B 1.25B 1.87B 2.06B

Weak Balance Sheet

ETN's financial position is not ideal. The key is to check whether ETN is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 646.00M 530.00M 773.00M 1.17B 1.08B 1.10B 1.71B 1.03B 445.00M 746.00M
Current Assets 4.77B 4.80B 4.52B 5.51B 5.83B 7.84B 8.73B 8.10B 6.62B 6.94B
Total Assets 13.43B 16.66B 16.28B 17.25B 17.87B 35.85B 35.49B 33.53B 31.03B 30.42B
Current Liabilities 3.66B 3.75B 2.69B 3.23B 3.64B 5.43B 4.91B 5.36B 4.63B 5.49B
Total Liabilities 8.26B 10.34B 9.51B 9.89B 10.40B 20.76B 18.70B 17.74B 15.85B 15.52B
Stockholder' Equity 5.17B 6.32B 6.78B 7.36B 7.47B 15.09B 16.79B 15.79B 15.19B 14.90B
Current Ratio 1.30 1.28 1.68 1.70 1.60 1.44 1.78 1.51 1.43 1.27
TL-to-TA 0.61 0.62 0.58 0.57 0.58 0.58 0.53 0.53 0.51 0.51

Consistent Reinvestment of Profits over the past 10 years

ETN has consistently retained profits. This may put ETN in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, ETN can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 3.26B 3.92B 3.97B 4.45B 5.10B 5.80B 6.86B 7.08B 7.35B 7.50B
Retained Earnings Growth - 20.26% 1.25% 12.13% 14.62% 13.79% 18.33% 3.09% 3.83% 2.07%

Competitive Industry over the past 10 years

ETN is likely operating in an industry with medium to low barriers to entry. This may mean that ETN doesn't have a characteristic that's hard to replicate, such as exclusive distribution, branding or the ability to keep costs low. If Gross Margins are at least satisfactory, it's likely that ETN invests heavily in R&D and Sales, General & Administrative expenses.

Only $7.62 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 994.00M 1.06B 385.00M 937.00M 1.35B 1.22B 1.87B 1.80B 1.98B 1.93B
divided by
Revenue 13.03B 15.38B 11.87B 13.72B 16.05B 16.31B 22.05B 22.55B 20.86B 19.75B
Net Profit Margin 7.63% 6.88% 3.24% 6.83% 8.41% 7.48% 8.50% 7.99% 9.50% 9.75%

Inconsistent Gross Profit Margins over the past 10 years

ETN has good gross profit margins, however inconsistency of these margins is a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$36.28 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 3.65B 4.19B 3.09B 4.08B 15.63B 4.86B 6.68B 6.91B 6.56B 6.35B
divided by
Revenue 13.03B 15.38B 11.87B 13.72B 16.05B 16.31B 22.05B 22.55B 20.86B 19.75B
Gross Margin 28.01% 27.22% 26.03% 29.76% 97.40% 29.81% 30.29% 30.62% 31.47% 32.14%

Medium Capital Intensity over the past 10 years

ETN has used a reasonable amount of their financial resources to invest in facilities and equipment required to produce its goods and services. This isn't perfect, but it shouldn't be an area of concern unless this number is strongly trending upwards.

38.05% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 354.00M 448.00M 195.00M 394.00M 568.00M 593.00M 614.00M 632.00M 506.00M 497.00M
divided by
Net Income 994.00M 1.06B 385.00M 937.00M 1.35B 1.22B 1.87B 1.80B 1.98B 1.93B
Capital Expenditure Ratio 35.61% 42.34% 50.65% 42.05% 42.07% 48.61% 32.78% 35.05% 25.54% 25.82%

Very Strong Dividend History over the past 10 years

ETN has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests ETN is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 251.00M 320.00M 334.00M 363.00M 462.00M 512.00M 796.00M 929.00M 1.03B 1.04B
divided by
Shares Outstanding 150.30M 162.30M 167.90M 339.50M 342.80M 350.90M 476.70M 476.80M 467.10M 456.50M
Dividend Paid Per Share 1.67 1.97 1.99 1.07 1.35 1.46 1.67 1.95 2.20 2.27
Price at Year End 42.72 21.66 30.07 48.82 43.20 53.09 76.01 68.77 52.59 67.09
Dividend Yield 3.91% 9.10% 6.62% 2.19% 3.12% 2.75% 2.20% 2.83% 4.18% 3.39%

History of Stock Buybacks over the past 10 years

ETN has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 150.30M 162.30M 167.90M 339.50M 342.80M 350.90M 476.70M 476.80M 467.10M 456.50M
Stock Bought Back - -7.39% -3.34% -50.54% -0.96% -2.31% -26.39% -0.02% 2.08% 2.32%
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