Is Weakness In ITT Inc. (NYSE:ITT) Stock A Sign That The Market Could Be Wrong Given Its Strong Financial Prospects?
Is Weakness In ITT Inc. (NYSE:ITT) Stock A Sign That The Market Could Be Wrong Given Its Strong Financial Prospects?
ITT (NYSE:ITT) has had a rough week with its share price down 4.6%. But if you pay close attention, you might gather that its strong financials could mean that the stock could potentially see an increase in value in the long-term, given how markets usually reward companies with good financial health. In this article, we decided to focus on ITT's ROE.
ITT(紐約證券交易所代碼：ITT)經歷了艱難的一週，其股價下跌了4.6%。但如果你仔細觀察，你可能會猜到，它強勁的財務狀況可能意味著，考慮到市場通常會獎勵財務狀況良好的公司，該股可能會在長期內增值。在本文中，我們決定關注ITT的淨資產收益率。
Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. In short, ROE shows the profit each dollar generates with respect to its shareholder investments.
股本回報率(ROE)是對一家公司增值和管理投資者資金的效率的測試。簡而言之，淨資產收益率顯示了每一美元相對於其股東投資產生的利潤。
View our latest analysis for ITT
查看我們對ITT的最新分析
How Is ROE Calculated?
淨資產收益率是如何計算的？
The formula for ROE is:
這個淨資產收益率公式是：
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
股本回報率=(持續經營的)淨利潤？股東權益
So, based on the above formula, the ROE for ITT is:
因此，根據上述公式，ITT的淨資產收益率為：
18% = US$429m ÷ US$2.4b (Based on the trailing twelve months to July 2023).
18%=4.29億美元×24億美元(基於截至2023年7月的12個月)。
The 'return' is the yearly profit. So, this means that for every $1 of its shareholder's investments, the company generates a profit of $0.18.
“回報”就是年度利潤。因此，這意味著股東每投資1美元，公司就會產生0.18美元的利潤。
What Has ROE Got To Do With Earnings Growth?
淨資產收益率與盈利增長有什麼關係？
Thus far, we have learned that ROE measures how efficiently a company is generating its profits. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features.
到目前為止，我們已經瞭解到淨資產收益率衡量的是一家公司創造利潤的效率。根據公司選擇再投資或“保留”多少利潤，我們就能夠評估一家公司未來產生利潤的能力。假設其他條件相同，與沒有相同特徵的公司相比，擁有更高股本回報率和更高利潤保留率的公司通常會有更高的增長率。
A Side By Side comparison of ITT's Earnings Growth And 18% ROE
ITT盈利增長與18%淨資產收益率的並列比較
At first glance, ITT seems to have a decent ROE. Especially when compared to the industry average of 14% the company's ROE looks pretty impressive. This probably laid the ground for ITT's moderate 7.3% net income growth seen over the past five years.
乍一看，ITT似乎有不錯的淨資產收益率。特別是與14%的行業平均水準相比，該公司的淨資產收益率看起來相當令人印象深刻。這可能為ITT過去五年7.3%的淨利潤溫和增長奠定了基礎。
As a next step, we compared ITT's net income growth with the industry and found that the company has a similar growth figure when compared with the industry average growth rate of 8.2% in the same period.
作為下一步，我們將ITT的淨收入增長與行業進行了比較，發現該公司的增長數位與同期8.2%的行業平均增長率相似。
Earnings growth is a huge factor in stock valuation. It's important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. Has the market priced in the future outlook for ITT? You can find out in our latest intrinsic value infographic research report.
盈利增長是股票估值的一個重要因素。對於投資者來說，重要的是知道市場是否已經消化了公司預期的收益增長(或下降)。通過這樣做，他們將知道股票是將進入清澈的藍色水域，還是等待沼澤水域。市場反映出ITT的未來前景了嗎？你可以在我們最新的內在價值資訊圖研究報告中找到答案。
Is ITT Using Its Retained Earnings Effectively?
ITT是否有效地利用了其留存收益？
With a three-year median payout ratio of 25% (implying that the company retains 75% of its profits), it seems that ITT is reinvesting efficiently in a way that it sees respectable amount growth in its earnings and pays a dividend that's well covered.
ITT的三年中值派息率為25%(這意味著該公司保留了75%的利潤)，看起來它正在以一種高效的方式進行再投資，它看到了可觀的收益增長，並支付了豐厚的股息。
Besides, ITT has been paying dividends for at least ten years or more. This shows that the company is committed to sharing profits with its shareholders. Existing analyst estimates suggest that the company's future payout ratio is expected to drop to 20% over the next three years. However, the company's ROE is not expected to change by much despite the lower expected payout ratio.
此外，ITT的紅利至少已經有十年甚至更長的時間了。這表明該公司致力於與股東分享利潤。分析師現有的預估顯示，該公司未來三年的派息率預計將降至20%。然而，儘管預期派息率較低，該公司的淨資產收益率預計不會有太大變化。
Conclusion
結論
Overall, we are quite pleased with ITT's performance. In particular, it's great to see that the company is investing heavily into its business and along with a high rate of return, that has resulted in a sizeable growth in its earnings. On studying current analyst estimates, we found that analysts expect the company to continue its recent growth streak. To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more.
總體而言，我們對ITT的表現相當滿意。特別是，很高興看到該公司在業務上投入了大量資金，並獲得了高回報率，這導致了其收益的可觀增長。在研究了分析師目前的預測後，我們發現，分析師預計該公司將繼續最近的增長勢頭。要了解更多有關該公司未來收益增長預測的資訊，請查看以下內容免費報告分析師對該公司的預測，以瞭解更多資訊.
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本文由Simply Wall St.撰寫，具有概括性.我們僅使用不偏不倚的方法提供基於歷史數據和分析師預測的評論，我們的文章並不打算作為財務建議.它不構成買賣任何股票的建議，也沒有考慮你的目標或你的財務狀況.我們的目標是為您帶來由基本面數據驅動的長期重點分析.請注意，我們的分析可能不會將最新的對價格敏感的公司公告或定性材料考慮在內.Simply Wall St.對上述任何一隻股票都沒有持倉.