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Fundamental analysis: ABB Ltd (ABB)

Awarener score: 6.3

Conclusion

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 4.5

• Business has been shrinking at a very fast pace. It's been substantially worse when measured against peer companies.
• ABB Ltd business trend stability is very good. The higher the stability, the lower the risk. It looks better than most rivals.

Margins score: 7.0

• ABB profit margins -on goods and services sold- are usually hardly sufficient. They stand slightly better than rival companies.
• Business profit on sales tends to be very good. It's encouraging in relation to competitors.
• Profits on sales made -available to repay debt and purchase properties- are usually good. They remain in good shape compared to peers.
• Earnings -before income taxes and interests on loans taken- tend to be good in relation to total revenues. They're still well ranked against similar companies.
• Profits -before income taxes- are usually good considering total sales, and remain encouraging in relation to rivals.
• Total net profit tends to be very good when confronted to sales. Company stands more than average in relation to comparable firms.

Growth score: 7.4

• ABB Ltd profit -on goods and services sold- has been shrinking. It's been in a very weak position compared to competitors.
• In recent years, earnings -on operations- have been growing at a very good step, which has been slightly better than comparable firms.
• Profits -available to repay debt and purchase properties- have been growing at a good pace, which compares almost average when measured against peer enterprises.
• Earnings -before income taxes and interests on loans taken- have been growing at a very good tempo. It turns to be rather normal in relation to similar stocks.
• In past years, profits -before income taxes- grew at an excellent speed. It was somewhat better than rivals.
• In the previous years, growth trend on total net profit has been excellent, and encouraging in relation to peer companies.
• Earnings per share have grown at an excellent rhythm in past years. It's been a slight improvement compared to industry peers.

Miscellaneous score: 4.3

• ABB had to pay a lot of income taxes in relation to profits made in the past years. It's been worse than most peers.
• Research and development expenses consume a very little portion of revenues. It's similar to competitors.
• Business has seen substantial shrinking, despite research and development efforts. It stands a disappointment compared to rival companies.

Profitability score: 9.2

• ABB Ltd usually gets excellent returns on the resources it controls. It proves more than average in relation to peer firms.
• The company normally gets excellent proceeds -on the resources directly invested in the business-. They remain excellent in relation to similar companies.
• Profitability -in relation to owned resources- is usually paramount. It ranks top tier when measured against competitors.
• In the past, got excellent returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's more than average in relation to comparable enterprises.

Usage of Funds score: 5.0

• ABB usually uses a large portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is large. It stands more than average in relation to rival firms.
• The company is usually replacing most of the property, plant, and equipment that gets old, and saving a little funds for something else, which is almost average when measured against industry peers.
• In the past twelve months it paid some dividends, considering the current stock price. It came better than most competitors.
• Dividend payments have been more or less stable in recent years. The company has behaved in good shape compared to similar firms.
• The company pays more dividends than genuine funds is usually able to generate, therefore borrowing more funds. Future payments may be at risk, especially if a downturn in business occurs. Sustainability looks worse than most comparable companies.
• The company usually reduces the pool of investors, resulting in fewer mouths feeding on the pie of profits. It remains excellent in relation to peer enterprises.
• Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands a slight improvement compared to rivals.
• The company uses a lot more funds to reward investors than it can genuinely generate, so they're paid out of existing cash or by borrowing money, both of which will eventually reach a limit. Either business improves, or rewards won't keep at current pace. It still looks substantially worse when measured against competitors.

Balance Sheet score: 4.9

• ABB Ltd intangible assets (like brands and goodwill) represent a significant portion of resources controlled, according to accounting books. There could be significant difficulties in liquidating them if the company ever gets in financial distress. It happens to be substantially worse when measured against peer companies.
• The company has somewhat more short-term resources than short-term obligations. Liquidity concerns might not be that important. It turns to be a disappointment compared to similar firms.
• Roughly a quarter of resources controlled were provided for with financial debt. Creditors have some claims on the company. It remains mediocre against rival firms.
• Controlled resources might be turned into cash and equivalents neither fast nor too slow. Liquidity and risk might be run-of-the-mill. It looks weak when measured against rivals.
• For every dollar of short-term obligations, the company has almost another of cash and short-term receivables. It's a disappointment compared to peer firms.
• For every dollar of short-term obligations, the company has roughly half of cash and equivalents, which is mediocre against similar enterprises.
• Usually, sales are on somewhat more than three months credit. It still ranks weak when measured against peers.
• Normally has approximately three months of sales worth in inventory. It comes up as rather normal in relation to competitors.
• On average, it takes higher than six months from the purchase to charging customers. It happens to be somewhat worse than peers.
• On average pays suppliers approximately three months after the purchase. It ranks great when measured against industry peers.
• The company pays its suppliers four months or more before charging its customers, so there's significant money invested in working capital. It's rather normal in relation to similar companies.
• Net interest expenses consume a non-significant portion of usual business earnings, and are therefore extremely easily to bear. It stands better than most rival firms.
• Business earnings have usually been good when measured against loans taken. Cutting back reinvesting in the business, it could take less than three years to repay the obligations with current profitability. It ranks almost average when measured against comparable enterprises.
• Revenues are quite good in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. The more property, plant, and equipment used, the more the company must reinvest to fight obsolescence, which usually means less available funds for the shareholders in the long run. It looks close to average when compared to similar firms.
• Resource exploitation is quite good when yearly sales are considered. This metric is normally tied to the industry where the firm belongs. It's still slightly worse than peer companies.

Valuation score: 5.9

• ABB Ltd looks reasonable in relation to profits and financial position. It happens to be encouraging in relation to competitors.
• Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains in a very weak position compared to peers.
• In the past twelve months, the company generated some free funds in relation to the stock price, which stands slightly worse than similar companies.
• The company usually generates somewhat more than enough genuine funds to cover up for its business needs. Surplus cash may be used to repay loans, to eventually buy new businesses, or to reward investors. Considering the financial position and stock price, the current valuation might be reasonable. It's still below average when measured against industry firms.
• In the past twelve months, the company has rewarded investors, considering both dividends and share on the pie of earnings. It came up impressive in relation to peer ventures.
• The company has barely more debt than cash. It may borrow extra money if it wishes so, or start cumulating cash for future uses. It looks somewhat worse than similar enterprises.
• Considering the past twelve months, traditional Price-to-Earnings relation might be more or less reasonable, but hardly cheap. It ranks encouraging in relation to peer companies.
• Comparing the current stock price with the past twelve-months revenues gives a three or four to one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks lacking compared to rival firms.
• The relation between the stock price and accounting book value is really high, which may be good or bad depending on context. Run again in analytic mode if you want to dig deeper. The company remains mediocre against peer firms.
• In the past twelve months, the operating business earned good money when compared to the current stock price and financial position. It happens to be more than average in relation to industry peers.
• In an alternate metric of bang for the buck, the company has usually shown a very good earnings power ability when measured against the current stock price and financial position. It's still a slight improvement compared to peer companies.

Total score: 6.0

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Awarener score: 6.3

Conclusion

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