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Fundamental analysis: BorgWarner Inc. (BWA)

Awarener score: 6.9

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Very good), the business stability (Average) and growth (Average), and the company's inclination to return cash to the stockholders (Lacking).

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: 6.0

  • Business has been growing at a low pace. It's been great when measured against peer companies.
  • BorgWarner Inc. business trend stability is run-of-the-mill. The higher the stability, the lower the risk. It looks slightly worse than rivals.

Margins score: 6.5

  • BWA profit margins -on goods and services sold- are usually meagre. They stand slightly better than rival companies.
  • Business profit on sales tends to be very good. It's more than average in relation to competitors.
  • Profits on sales made -available to repay debt and purchase properties- are usually sufficient. They remain excellent in relation 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 great when measured against rivals.
  • Total net profit tends to be good when confronted to sales. Company stands more than average in relation to comparable firms.

Growth score: 3.4

  • BorgWarner Inc. profit -on goods and services sold- has been growing at a very low pace. It's been a slight improvement compared to competitors.
  • In recent years, earnings growth -on operations- have been almost stagnant, which has been somewhat worse than comparable firms.
  • Profits growth -available to repay debt and purchase properties- have been almost stagnant, which compares below average when measured against peer enterprises.
  • Earnings -before income taxes and interests on loans taken- tended to shrink. It turns to be in a very weak position compared to similar stocks.
  • In past years, profits -before income taxes- tended to shrink. It was worse than most rivals.
  • In the previous years, growth on total net profit has been low, and almost average when measured against peer companies.
  • Earnings per share have grown at a low rhythm in past years. It's been close to average when compared to industry peers.

Miscellaneous score: 2.0

  • BWA had to pay too much income taxes in relation to profits made in the past years. It's been somewhat worse than peers.
  • The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
  • We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 8.8

  • BorgWarner Inc. 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 in good shape compared to similar companies.
  • There's usually abundant profitability -in relation to owned resources-. It ranks encouraging in relation to 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: 5.9

  • BWA usually uses a sparse portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is modest. It stands more than average in relation to rival firms.
  • The company is usually replacing the property, plant, and equipment that gets old, keeping its operating capabilities up to date, which is similar to industry peers.
  • In the past twelve months it paid run-of-the-mill dividends, considering the current stock price. It came slightly worse than competitors.
  • In recent years, has slightly cut back dividend payments. The company has behaved close to average when compared to similar firms.
  • Dividend payments usually represent a modest portion of genuine funds generation and should be reasonable safe. Sustainability looks somewhat better than comparable companies.
  • The company usually enlarges quite a bit the pool of investors, resulting in more mouths feeding on the pie of profits. It remains in a weak position compared to peer enterprises.
  • Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands close to average when compared to rivals.
  • The company uses a modest portion of genuine fund generation to reward investors, which can probably be sustained. It still looks more than average in relation to competitors.

Balance Sheet score: 5.3

  • BorgWarner Inc. intangible assets (like brands and goodwill) represent a portion of resources controlled, according to accounting books. There could be difficulties in liquidating them if the company ever gets in financial distress. It happens to be weak when measured against peer companies.
  • The company has more short-term resources than short-term obligations. Liquidity concerns shouldn't be an issue. It turns to be close to average when compared to similar firms.
  • Roughly a third of resources controlled were provided for with financial debt. Creditors have claims on the company. It remains slightly worse than 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 substantially worse when measured against rivals.
  • For every dollar of short-term obligations, the company has enough dollars in cash and short-term receivables. It's rather normal in relation to peer firms.
  • For every dollar of short-term obligations, the company has roughly half of cash and equivalents, which is slightly better than similar enterprises.
  • Usually, sales are on somewhat less than three months credit. It still ranks below average when measured against peers.
  • Normally has approximately somewhat less than two months of sales worth in inventory. It comes up as a slight improvement compared to competitors.
  • On average, it takes higher than four months from the purchase to charging customers. It happens to be somewhat better than peers.
  • On average pays suppliers approximately three months after the purchase. It ranks encouraging in relation to industry peers.
  • The company pays its suppliers roughly two months before charging its customers, so there's some money invested in working capital. It's a slight improvement compared to similar companies.
  • Net interest expenses consume a minor portion of usual business earnings, and are easily bearable. It stands slightly better than rival firms.
  • Business earnings have usually been quite good when measured against loans taken. Cutting back reinvesting in the business, it could take around three years to repay the obligations with current profitability. It ranks similar to comparable enterprises.
  • Revenues are modest 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 lacking compared to similar firms.
  • Resource exploitation is very 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: 6.9

  • BorgWarner Inc. looks reasonable in relation to profits and financial position. It happens to be similar 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 lacking compared to peers.
  • In the past twelve months, the company generated some good free funds in relation to the stock price, which stands well ranked against similar companies.
  • The company usually generates much more 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, at the current price the share might be very interesting. It's still encouraging in relation to industry firms.
  • In the past twelve months, the company has enlarged the pool of investors by issuing new shares. Future profits need to be high enough to justify the measure, as the pie of earnings will now be split among somewhat more stockholders. It came up in a weak position compared to peer ventures.
  • The company is indebted, it should focus on loan repayment. It looks slightly worse than similar enterprises.
  • Considering the past twelve months, traditional Price-to-Earnings relation might be reasonable. It ranks similar to peer companies.
  • Comparing the current stock price with the past twelve-months revenues gives a low relationship. One common cause includes profitability being poor. It looks rather normal in relation to rival firms.
  • The relation between the stock price and accounting book value might be more than reasonable. It's important both to check this metric through time and to compare it with rival companies. The company remains somewhat better than 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 encouraging 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 in good shape compared to peer companies.

Total score: 5.6


BWA logos

Company at a glance: BorgWarner Inc. (BWA)

Sector, industry: Consumer Cyclical, Auto Parts

Market Cap: 8.09 billions

Revenues TTM: 14.70 billions

BorgWarner Inc. provides solutions for combustion, hybrid, and electric vehicles worldwide. The company operates through four segments: Air Management, E-Propulsion & Drivetrain, Fuel Injection, and Aftermarket. The Air Management segment offers turbochargers, eBoosters, eTurbos, timing systems, emissions systems, thermal systems, gasoline ignition technology, smart remote actuators, powertrain sensors, canisters, cabin heaters, battery modules and systems, battery packs, battery heaters, and battery charging. The E-Propulsion & Drivetrain segment provides rotating electrical components, power electronics, control modules, software, friction, and mechanical products for automatic transmissions and torque-management products. The Fuel Injection segment develops and manufactures gasoline and diesel fuel injection components and systems. The Aftermarket segment sells products and services to independent aftermarket customers and original equipment service customers. This segment provides a range of solutions, including fuel injection, electronics and engine management, maintenance, and test equipment and vehicle diagnostics. The company sells its products to original equipment manufacturers of light vehicles, which comprise passenger cars, sport-utility vehicles, vans, and light trucks; commercial vehicles, including medium-duty and heavy-duty trucks, and buses; and off-highway vehicles, such as agricultural and construction machinery, and marine applications, as well as to tier one vehicle systems suppliers and the aftermarket for light, commercial, and off-highway vehicles. The company was formerly known as Borg-Warner Automotive, Inc. BorgWarner Inc. was incorporated in 1987 and is headquartered in Auburn Hills, Michigan.

Awarener score: 6.9

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Very good), the business stability (Average) and growth (Average), and the company's inclination to return cash to the stockholders (Lacking).