Johnson Controls International plc, together with its subsidiaries, engages in engineering, manufacturing, commissioning, and retrofitting building products and systems in the United States, Europe, the Asia Pacific, and internationally. The company belongs to the Industrials sector, which has an average price to earnings (P/E) ratio of 20.49 and an average price to book (P/B) ratio of 3.78. In contrast, Johnson Controls International has a trailing 12 month P/E ratio of 32.7 and a P/B ratio of 2.81.
P/E rations can be placed into context by dividing them by the firm's expected 5-year EPS growth rate, which gives us its Price to Earnings Growth (PEG) ratio. Johnson Controls International's PEG ratio is 1.17, which tells us the company is fairly valued in terms of growth. PEG ratios under 1 are considered an indicator of undervalued growth, but we need to keep in mind that many successful companies with excellent share performance have maintained much higher PEG ratios.
As always, a quantitative approach to a stock should be supplemented with a look at qualitative factors, such as the competence of its management team, quality of its corporate culture, and the wide variety of social and economic factors that can impact the success of its product.
Shareholders Are Confronted With a Declining EPS Growth Trend:
| 2019-09-30 | 2020-09-30 | 2021-09-30 | 2022-09-30 | |
|---|---|---|---|---|
| Revenue (MM) | $23,968 | $22,317 | $23,668 | $25,299 |
| Gross Margins | 32.1% | 33.2% | 34.0% | 33.0% |
| Operating Margins | 6.0% | 7.8% | 11.8% | 9.5% |
| Net Margins | 23.67% | 2.83% | 6.92% | 6.06% |
| Net Income (MM) | $5,674 | $631 | $1,637 | $1,532 |
| Net Interest Expense (MM) | -350 | -231 | -206 | -213 |
| Net Interest Expense (MM) | -$350 | -$231 | -$206 | -$213 |
| Depreciation & Amort. (MM) | -$825 | -$206 | -$845 | -$830 |
| Earnings Per Share | $6.49 | $0.84 | $2.27 | $1.99 |
| EPS Growth | n/a | -87.06% | 170.24% | -12.33% |
| Diluted Shares (MM) | 874 | 754 | 721 | 686 |
| Free Cash Flow (MM) | $616 | $879 | $1,935 | $1,394 |
| Capital Expenditures (MM) | -$586 | -$96 | -$552 | -$592 |
| Net Current Assets (MM) | -$9,065 | -$12,229 | -$13,139 | -$13,071 |
| Current Ratio | 1.37 | 1.22 | 1.1 | 1.04 |
| Long Term Debt (MM) | $6,708 | $7,526 | $7,506 | $7,426 |
| Net Debt / EBITDA | 0.67 | 4.99 | 1.8 | 2.7 |
