For most investors, how much a stock’s price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you’d invested in Eaton (ETN) ten years ago? It may not have been easy to hold on to ETN for all that time, but if you did, how much would your investment be worth today?
Eaton’s Business In-Depth
With that in mind, let’s take a look at Eaton’s main business drivers.
Dublin, Ireland-based Eaton Corporation plc is a diversified power management company and a global technology leader in electrical components and systems. It sells products in more than 175 countries and has in excess of 85,000 employees. The company was founded in 1911.
Eaton’s current reportable segments are Electrical Americas, Electrical Global, Aerospace, Vehicle and eMobility.
The Electrical Americas segment includes sales contracts that are primarily for electrical and industrial components, power distribution and assemblies, residential products, single and three-phase power quality, wiring devices, circuit protection, utility power distribution, power reliability equipment, as well as services that are primarily produced and sold in North and South America. The Electrical Global segment consists of the same activities as mentioned in Electrical Americas but is primarily produced and sold outside of North and South America.
The Vehicle segment includes the Truck and Automotive subsegments. The truck segment designs, manufactures and markets powertrain systems and other components for commercial vehicle markets. The aerospace segment is a supplier of aerospace fuel and hydraulic and pneumatic systems for commercial and military use.
The eMobility segment focuses on two technologies within electric vehicles, namely Power electronics & conversion and Power distribution & circuit protection.
Eaton’s segments — Electrical Americas, Electrical Global, Aerospace, Vehicle and eMobility — contributed 44.8%, 25.4%, 15%, 12% and 2.8%, respectively, to 2023 revenues.
Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Eaton ten years ago, you’re likely feeling pretty good about your investment today.
A $1000 investment made in September 2014 would be worth $4,396.65, or a gain of 339.66%, as of September 2, 2024, according to our calculations. This return excludes dividends but includes price appreciation.
In comparison, the S&P 500 gained 181.94% and the price of gold went up 86.52% over the same time frame.
Analysts are anticipating more upside for ETN. Eaton’s second-quarter earnings were better than estimates. Eaton benefits from its research and development work that allows to develop new products for its customers. Eaton is aided by rising demand from the new AI data center and contributions from its organic assets. Eaton is expanding via acquisitions and its strategy to manufacture in the region of its end market has helped the company to reduce production costs. Reindustrialization and megatrends will create more opportunities for Eaton. Its shares have outperformed the industry in the past year. Yet, Eaton’s global operations expose it to unpredictable currency translation, cyber security threats, changes in tax rates and security breaches, which might impact operations. The shortage of raw materials and supplier insolvencies might impact production and operations.
Over the past four weeks, shares have rallied 9.52%, and there have been 6 higher earnings estimate revisions in the past two months for fiscal 2024 compared to none lower. The consensus estimate has moved up as well.
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Eaton Corporation, PLC (ETN) : Free Stock Analysis Report