Special Industry Machinery (No Metalworking Machinery)
Pentair plc provides various water solutions worldwide. The company operates through three segments: Pool, Water Solutions, Industrial & Flow Technologies. It designs, manufactures, and sells residential and commercial pool equipment and accessories, including pumps, filters, heaters, lights, automatic controls, automatic cleaners, maintenance equipment, and pool accessories for residential and commercial pool maintenance, repair, renovation, service, and construction applications; and water treatment products and systems comprising pressure tanks, control valves, activated carbon products, conventional filtration products, and point-of-entry and point-of-use systems for use in residential whole home water filtration, drinking water filtration, water softening solutions, commercial total water management and filtration, and foodservice operations. The company also manufactures and sells fluid treatment products, such as advanced membrane filtration products, separation systems, and membrane bioreactors; water supply and disposal, solid handling, fluid transfer, and turbine pumps; and valves, spray nozzles, process filtration systems, and gas recovery solutions for food and beverage, fluid separation technologies, water and wastewater treatment, water wells, pressure boosting, fire suppression, flood control, agricultural irrigation, crop spray, fluid circulation and transfer, fluid delivery, ion exchange, desalination, residential and municipal wells, and wastewater solids handling applications. It offers its products under the the Everpure, KBI, Kreepy Krauly, Manitowoc Ice, Pleatco, RainSoft, and Sta-Rite; and Pentair, Aurora, Berkeley, Codeline, Fairbanks-Nijhuis, Haffmans, Hydromatic, Hypro, Jung Pumpen, Myers, Sta-Rite, Shurflo, Südmo, and X-Flow brands. The company was founded in 1966 and is headquartered in London, the United Kingdom.
Discounted Cash Flow Valuation of Pentair Plc
Growth
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%
Discount
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%
Multiple
g\r | +10% | +11% | +12% | +13% | +14% |
---|---|---|---|---|---|
0% | 10 | 9 | 8 | 8 | 7 |
+1% | 11 | 10 | 9 | 8 | 8 |
+2% | 13 | 11 | 10 | 9 | 8 |
+3% | 14 | 13 | 11 | 10 | 9 |
+4% | 17 | 14 | 12 | 11 | 10 |
Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | TV |
---|---|---|---|---|---|---|---|---|---|---|---|---|
FCF | $541.3M | $508.8M | $478.2M | $449.4M | $422.4M | $397M | $373.1M | $350.7M | $329.6M | $309.8M | $291.2M | $2.912B |
DCF | $442.4M | $361.6M | $295.5M | $241.5M | $197.4M | $161.3M | $131.8M | $107.8M | $88.07M | $71.98M | $719.8M | |
Value | $2.819B |
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
Years | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Net Margin | -1.2% | 11% | 14% | 12% | 12% | 12% | 15% | 12% | 15% | 15% |
ROA | 1.5% | 6.1% | 7.9% | 11% | 10% | 11% | 13% | 9.2% | 11% | 11% |
ROE | -1.9% | 12% | 13% | 19% | 18% | 17% | 23% | 18% | 19% | 19% |
The average Net Margin over the past 5 years is +12.86%.
The trend of Net Margin over the past 5 years is +0.54%.
The average ROA over the past 5 years is +11.13%.
The trend of ROA over the past 5 years is -0.07%.
The average ROE over the past 5 years is +19.02%.
The trend of ROE over the past 5 years is +0.19%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
Years | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Debt FCF | 7.65 | 5.78 | 2.40 | 1.93 | 3.53 | 1.66 | 1.63 | 8.38 | 3.68 | 3.88 |
Debt Equity | 1.17 | 1.01 | 0.29 | 0.43 | 0.53 | 0.40 | 0.37 | 0.86 | 0.62 | 0.63 |
MIN | ||||||||||
Graham Stability | - | - | 100% | 94% | 69% | 79% | 100% | 100% | 100% | 69% |
The Debt/FCF trailing twelve month is 3.88.
The trend of Debt/FCF over the past 5 years is 0.67.
Graham’s Stability measure stands at 0.69.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
Years | 12-2016 | 12-2018 | 12-2020 | 12-2022 | Trend |
---|---|---|---|---|---|
Revenue | -2.5% | 6.7% | 11% | -0.42% | 3.7% |
Net Income | 2.5% | 12% | 20% | 29% | 4.5% |
Stockholders Equity | -3.9% | 12% | 15% | 19% | 3.5% |
FCF | -4.3% | 5.9% | 2.1% | 95% | 7.5% |
The Revenue CAGR over the past 5 years is +6.72%.
The trend of Revenue growth rate over the past 5 years is +3.71%.
The Earnings CAGR over the past 5 years is +12.38%.
The trend of Earnings growth rate over the past 5 years is +4.54%.
The Equity CAGR over the past 5 years is +11.87%.
The trend of Equity growth rate over the past 5 years is +3.55%.
The FCF CAGR over the past 5 years is +5.86%.
The trend of FCF growth rate over the past 5 years is +7.49%.