Espey Mfg & Electronics Corp (ESP) stock analysis

P/E below its 5-year median

Espey Mfg & Electronics's P/E of 12.2 is below its own 5-year median of 14.4.

P/E below the industry

Espey Mfg & Electronics's P/E of 12.2 is below the Electronic Components and Accessories median of 34.6.

EV/EBITDA below its 5-year median

Espey Mfg & Electronics's EV/EBITDA of 8.5 is below its 5-year median of 10.5.

P/B below the industry

Espey Mfg & Electronics's price-to-book of 2.38 is below the Electronic Components and Accessories median of 3.49.

Trading below fair value

The share price of $47.52 is below our fair value estimate of $74.34.

Margin of safety over 20%

The price is 36.1% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 9.0% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 37.7% a year over the last three fiscal years.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing slower than the industry

Revenue grew 4.9% over the last twelve months; the Electronic Components and Accessories median is 17.3%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin improving

Gross margin was 35.3% over the last twelve months, against 28.9% a year earlier.

Return on equity under 15%

Return on equity was 20.1% over the last twelve months and averaged 13.5% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 86.9%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Espey Mfg & Electronics's return on equity of 20.1% is above the Electronic Components and Accessories median of 4.8%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin above its 5-year average

Net margin was 24.2% over the last twelve months, against a 5-year average of 14.4%.

Net margin above the industry

Espey Mfg & Electronics's net margin of 24.2% is above the Electronic Components and Accessories median of 3.0%.

No debt

Espey Mfg & Electronics has no borrowings on its latest balance sheet.

Debt not rising

With no debt today, leverage cannot have risen.

Debt covered by cash flow

There is no debt to cover.

Interest well covered

No meaningful interest expense to cover.

Short-term assets cover short-term debts

Current assets are 2.50 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 4.46; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Espey Mfg & Electronics paid dividends worth 3.7% of the share price over the last twelve months.

Yield below Treasuries

The 3.7% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Espey Mfg & Electronics yields 3.7%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 9 fiscal years.

Covered by earnings

Dividends take 43.2% of net income.

Not covered by free cash flow

Dividends take 187% of free cash flow.