Eaton Corporation plc
Eaton Corporation plc Fundamental Analysis
Eaton Corporation plc (ETN) shows moderate financial fundamentals with a PE ratio of 38.71, profit margin of 13.99%, and ROE of 20.81%. The company generates $28.5B in annual revenue with strong year-over-year growth of 10.33%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 70.7/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze ETN's fundamental strength across five key dimensions:
Efficiency Score
WeakETN struggles to generate sufficient returns from assets.
Valuation Score
WeakETN trades at a premium to fair value.
Growth Score
ModerateETN shows steady but slowing expansion.
Financial Health Score
ModerateETN shows balanced financial health with some risks.
Profitability Score
ModerateETN maintains healthy but balanced margins.
Key Financial Metrics
Is ETN Expensive or Cheap?
P/E Ratio
ETN trades at 38.71 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, ETN's PEG of 12.43 indicates potential overvaluation.
Price to Book
The market values Eaton Corporation plc at 7.82 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 22.52 times EBITDA. This signals the market has high growth expectations.
How Well Does ETN Make Money?
Net Profit Margin
For every $100 in sales, Eaton Corporation plc keeps $13.99 as profit after all expenses.
Operating Margin
Core operations generate 18.13 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $20.81 in profit for every $100 of shareholder equity.
ROA
Eaton Corporation plc generates $7.25 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Eaton Corporation plc produces operating cash flow of $4.74B, showing steady but balanced cash generation.
Free Cash Flow
Eaton Corporation plc generates strong free cash flow of $4.70B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $12.09 in free cash annually.
FCF Yield
ETN converts 3.02% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
38.71
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
12.43
vs 25 benchmark
P/B Ratio
Price to book value ratio
7.82
vs 25 benchmark
P/S Ratio
Price to sales ratio
5.42
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.10
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.19
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.21
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.12
vs 25 benchmark
How ETN Stacks Against Its Sector Peers
| Metric | ETN Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 38.71 | 26.09 | Worse (Expensive) |
| ROE | 20.81% | 1271.00% | Weak |
| Net Margin | 13.99% | -30278.00% (disorted) | Strong |
| Debt/Equity | 1.10 | 0.73 | Weak (High Leverage) |
| Current Ratio | 1.19 | 8.97 | Neutral |
| ROA | 7.25% | -1493581.00% (disorted) | Weak |
ETN outperforms its industry in 1 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Eaton Corporation plc's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
59.24%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
200.46%
Industry Style: Cyclical, Value, Infrastructure
High GrowthFCF CAGR
57.38%
Industry Style: Cyclical, Value, Infrastructure
High Growth