TE Connectivity plc (TEL) stock analysis

P/E above its 5-year median

TE Connectivity's P/E of 19.8 is above its own 5-year median of 19.6.

P/E below the industry

TE Connectivity's P/E of 19.8 is below the Wholesale Trade-durable Goods median of 20.3.

EV/EBITDA below its 5-year median

TE Connectivity's EV/EBITDA of 13.4 is below its 5-year median of 14.1.

P/S above the industry

TE Connectivity's price-to-sales of 3.19 is above the Wholesale Trade-durable Goods median of 0.77 (book value is negative, so we use sales).

Trading above fair value

The share price of $219.41 is above our fair value estimate of $200.37.

Margin of safety under 20%

The price is 9.5% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 7.4% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 22.4% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 76.6% over the last twelve months, against a 5-year average of 7.5% a year.

Growing faster than the industry

Revenue grew 15.2% over the last twelve months; the Wholesale Trade-durable Goods median is 13.5%.

Guidance issued

The latest outlook (first quarter of fiscal 2027 sales, Oct 28, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin improving

Gross margin was 36.2% over the last twelve months, against 35.2% a year earlier.

Return on equity

Needs positive equity and five years of results.

Return on invested capital

Needs operating income and invested capital.

Return on equity against the industry

Needs positive equity.

Earnings grew over 5 years

Net income grew 7.5% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 16.4% over the last twelve months, against a 5-year average of 14.8%.

Net margin above the industry

TE Connectivity's net margin of 16.4% is above the Wholesale Trade-durable Goods median of 2.7%.

Debt level

Needs debt and equity figures.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 80.2% of total debt.

Interest well covered

Operating income covers interest expense 32.2 times.

Short-term assets cover short-term debts

Current assets are 1.73 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 5.16; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

TE Connectivity paid dividends worth 1.0% of the share price over the last twelve months.

Yield below Treasuries

The 1.0% 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; TE Connectivity yields 1.0%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 26.7% of net income.

Covered by free cash flow

Dividends take 25.5% of free cash flow.