Pentair Plc – Value Analysis (NYSE:PNR) : June 9, 2017

Capitalcube gives Pentair Plc a score of 41.

Our analysis is based on comparing Pentair Plc with the following peers – Xylem Inc., IDEX Corporation, Crane Co. and Dover Corporation (XYL-US, IEX-US, CR-US and DOV-US).

Investment Outlook

Pentair Plc has a fundamental score of 41 and has a relative valuation of UNDERVALUED.

Fundamental Score

Access our research and ratings on Pentair Plc

Company Overview

  • Considering peers, relative underperformance over the last year and the last month suggest a lagging position.
  • It trades at a lower Price/Book multiple (2.70) than its peer median (3.81).
  • The market expects PNR-US to grow at about the same rate as the peers and to maintain the median returns it currently generates.
  • PNR-US employs relatively high amounts of assets while generating relatively median profit margins.
  • Changes in annual earnings (relative to peers) are better than the change in its revenues (relative to peers), implying the company is focused more on earnings.
  • PNR-US‘s return on assets has improved from below median to about median among its peers over the last five years.
  • The company’s margins are around the peer medians and do not suggest any benefit from a pricing or an operating cost advantage versus peers.
  • While PNR-US‘s revenues growth has been below the peer median in the last few years, the market still gives the stock a P/E ratio that is around peer median and seems to see the company as a long-term strategic bet.
  • The company seems to be over-investing in a business with median returns.
  • PNR-US has additional debt capacity.

Access our research and ratings on Pentair Plc

Leverage & Liquidity

PNR-US has additional debt capacity.

  • With debt at a reasonable 28.79% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 21.42%), and a well-cushioned interest coverage level of 5.53x, PNR-US has the capacity to borrow some more.
  • All 4 peers for the company have an outstanding debt balance.

PNR-US has moved to a relatively high liquidity from an Some Capacity profile at the recent year-end.

  • PNR-US‘s interest coverage has increased 0.55 points from last year’s low but is still below its five-year average interest coverage of 207.40.
  • Though its interest coverage increased to 5.53x from 4.98x (in 2016), its peer median remained relatively stable during this period at 6.53x.
  • Interest coverage rose 0.62 points relative to peers.
  • PNR-US‘s debt-EV continues to trend downward and is below (but within one standard deviation of) its five-year average debt-EV of 41.11%.
  • Though its debt-EV decreased to 28.79% from 30.07% (in 2016), its peer median remained relatively stable during this period at 21.42%.
  • Relative to peers, debt-EV fell 1.09 percentage points. Unlike the peer median, it is also above the 25% leverage benchmark.

Access the detailed analysis for Pentair Plc

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Xylem Inc. 21.42 1.56 6.53 18.76
IDEX Corporation 12.04 2.96 9.01 40.86
Crane Co. 15.85 2.72 11.1 37.12
Dover Corporation 23.12 1.19 5.57 19.12
Pentair plc 28.79 2.03 5.53 17.63
Peer Median 21.42 2.03 6.53 19.12
Best In Class 12.04 2.96 11.1 40.86

Looking for more metrics and analysis for Pentair Plc?

Company Profile

Pentair Plc engages in the business of industrial manufacturing. It specializes in equipment protection to water, fluid, and in thermal management. It operates through the following segments: Water Quality Systems, Flow & Filtration Solutions and Technical Solutions. The Water Quality Systems segment designs, manufactures, markets and services innovative water system products and solutions for filtration and fluid management solutions for food and beverage, water, swimming pools and aquaculture applications. The Flow & Filtration Solutions segment designs, manufactures, markets and services solutions for the filtration, separation, flow and fluid management in agriculture, food and beverage processing, water supply and disposal and a variety of industrial applications. The Technical Solutions segment designs, manufactures, markets and services products that guard and protect some of sensitive electrical and electronic equipment, as well as heat management solutions designed to provide thermal protection to temperature sensitive fluid applications, engineered electrical, and fastening products for electrical, mechanical and civil applications. The company was founded by Murray Harpole, Vern Stone, Vincent Follmer, Leroy Nelson, and Gary Ostrand on August 31, 1966 and is headquartered in Manchester, the United Kingdom.

Disclaimer

The information presented in this report has been obtained from sources deemed to be reliable, but AnalytixInsight does not make any representation about the accuracy, completeness, or timeliness of this information. This report was produced by AnalytixInsight for informational purposes only and nothing contained herein should be construed as an offer to buy or sell or as a solicitation of an offer to buy or sell any security or derivative instrument. This report is current only as of the date that it was published and the opinions, estimates, ratings and other information may change without notice or publication. Past performance is no guarantee of future results. Prior to making an investment or other financial decision, please consult with your financial, legal and tax advisors. AnalytixInsight shall not be liable for any party’s use of this report. AnalytixInsight is not a broker-dealer and does not buy, sell, maintain a position, or make a market in any security referred to herein. One of the principal tenets for us at AnalytixInsight is that the best person to handle your finances is you. By your use of our services or by reading any our reports, you’re agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that AnalytixInsight, its directors, its employees, and its agents will not be liable for any investment decision made or action taken by you and others based on news, information, opinion, or any other material generated by us and/or published through our services. For a complete copy of our disclaimer, please visit our website www.analytixinsight.com.