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Eaton (NYSE:ETN) GF Value Rank

: 1 (As of Today)
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Eaton has the GF Value Rank of 1.

The GF Value Rank is determined by the price-to-GF-Value (P/GF Value) ratio, a proprietary metric calculated based on historical multiples along with an adjustment factor based on a company's past returns and growth and future estimates of the business' performance.

GuruFocus found that for valuation, we cannot simply give stocks a better GF Value rank simply because they have a lower P/GF Value ratio. Backtesting shows that over the long term, the two worst-performing groups are the most expensive group (with the highest P/GF Value ratio) and the least expensive group (with the lowest P/GF Value ratio).

We can understand why the most expensive group underperforms. We were initially puzzled by the underperformance of the least expensive group, but we realized there is a reason why some stocks are super cheap. If they look too undervalued, it is often because the businesses behind them are poor quality. The market realized this and gave them low valuations. In a way, the market is efficient.

After multiple backtesting analyses, we granted the stocks in third-cheapest percentile the highest GF Value rank, as they have performed the best over a full market cycle. Stock performance is actually not as sensitive to valuation as it is to growth and profitability. On average, the companies in the 20%-50% valuation groups have similar performances. Therefore, we should avoid the most expensive and the least expensive stocks. We can be more tolerant of valuation.

Please click GF Score to see more details on the GF Score's 5 Key Aspects of Analysis.

Competitive Comparison

For the Specialty Industrial Machinery subindustry, Eaton's GF Value Rank, along with its competitors' market caps and GF Value Rank data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Eaton GF Value Rank Distribution

For the Industrial Products industry and Industrials sector, Eaton's GF Value Rank distribution charts can be found below:

* The bar in red indicates where Eaton's GF Value Rank falls into.

Eaton GF Value Rank Related Terms

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Eaton (NYSE:ETN) Business Description

Traded in Other Exchanges
30 Pembroke Road, Eaton House, Dublin, IRL, D04 Y0C2
Eaton is a diversified power management company operating for over 100 years. The company operates through various segments, including electrical Americas, electrical global, aerospace, vehicle, and eMobility. Eaton's portfolio can broadly be divided into two halves. One part of its portfolio is housed under its industrial sector umbrella, which serves a large variety of end markets like commercial vehicles, general aviation, and trucks. The other portion is Eaton's electrical sector portfolio, which serves data centers, utilities, and the residential end market, among others. While the company receives favorable tax treatment with its Ireland domicile, most of its operations are in the U.S.
Peter Denk officer: See remarks below C/O EATON CORPORATION PLC, 1000 EATON BLVD., CLEVELAND OH 44122
Michael Yelton officer: See remarks below C/O EATON CORPORATION PLC, 1000 EATON BLVD., CLEVELAND OH 44122
Sternadt Paulo Ruiz officer: See remarks below 1000 EATON BLVD., CLEVELAND OH 44122
Szmagala Taras G. Jr. officer: See remarks below C/O EATON CORPORATION PLC, 1000 EATON BOULEVARD, CLEVELAND OH 44122
Dorothy C Thompson director 1000 EATON BLVD., CLEVELAND OH 44122
Christopher M Connor director THE SHERWIN WILLIAMS CO, 101 W. PROSPECT AVENUE, CLEVELAND OH 44115-1027
Gerald B Smith director
Gregory R Page director EATON CENTER, 1111 SUPERIOR AVENUE, CLEVELAND OH 44114
Daniel Roy Hopgood officer: See Remarks below. 2135 WEST MAPLE ROAD, TROY MI 48084-7186
Heath B. Monesmith officer: See Remarks below. 600 TRAVIS, SUITE 5600, HOUSTON TX 77002
Marshall Ernest W Jr officer: See Remarks below. 1000 EATON BLVD, CLEVELAND OH 44122
Sandra Pianalto director 1000 EATON BOULEVARD, CLEVELAND OH 44122
Boise April Miller officer: See Remarks below. C/O MERITOR, INC., 2135 WEST MAPLE ROAD, TROY MI 48084-7186
Thomas B Okray officer: See Remarks below. 5008 AIRPORT ROAD NW, ROANOKE VA 24012