Ingersoll-Rand PLC

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IR : NYSE : Industrial Goods
$68.32 -0.32 | -0.47%
Today's Range: 68.10 - 68.62
Avg. Daily Volume: 1,842,000
08/30/16 - 1:36 PM ET

Financial Analysis


INGERSOLL-RAND PLC's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. INGERSOLL-RAND PLC has weak liquidity. Currently, the Quick Ratio is 0.92 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has increased by 10.06% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)3688.23600.2
EBITDA ($mil)593.2545.0
EBIT ($mil)505.2452.2
Net Income ($mil)747.678.9


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)928.8779.6
Total Assets ($mil)17430.517886.8
Total Debt ($mil)4086.04394.3
Equity ($mil)6414.45827.6


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin34.2733.29
EBITDA Margin16.0815.13
Operating Margin13.712.56
Sales Turnover0.770.73
Return on Assets8.223.78
Return on Equity22.2411.18
Debt Q2 FY16 Q2 FY15
Current Ratio1.431.24
Debt/Capital0.390.43
Interest Expense56.555.8
Interest Coverage8.948.1


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)257.7265.3
Div / share0.320.29
EPS2.880.31
Book value / share24.8921.97
Institutional Own % n/a n/a
Avg Daily Volume1851050.01837946.0

Valuation


BUY. INGERSOLL-RAND PLC's P/E ratio indicates a significant discount compared to an average of 26.28 for the Machinery industry and a significant discount compared to the S&P 500 average of 25.13. To use another comparison, its price-to-book ratio of 2.72 indicates valuation on par with the S&P 500 average of 2.82 and a discount versus the industry average of 4.13. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, INGERSOLL-RAND PLC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
IR 12.53 Peers 26.28   IR 15.97 Peers 18.42

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

IR is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

IR is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
IR 15.20 Peers 22.22   IR 0.21 Peers 7.31

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

IR is trading at a significant discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

IR trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
IR 2.72 Peers 4.13   IR 123.55 Peers -25.43

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

IR is trading at a significant discount to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

IR is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
IR 1.30 Peers 1.88   IR 2.14 Peers -5.18

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

IR is trading at a significant discount to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

IR has a sales growth rate that significantly exceeds its peers.

 

 

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