Eaton Corporation

ETN

Industrial - Machinery · Industrials

Price

$404.59

-0.69 (-0.17%)

Market Cap

$157.10B

Exchange

New York Stock Exchange

Winston Score

Winston is serious

Mixed quality — meaningful strengths and weaknesses.

Winston Score between 40 and 70. The stock passes some quality checks but not all.

Eaton Corporation makes equipment that manages and controls electrical power, as well as systems for moving fluids like hydraulic and fuel systems. Its main products include circuit breakers, switchgear, transformers, and power distribution units, sold to customers in construction, data centers, utilities, aerospace, and manufacturing. Eaton is one of the largest power management companies in the world.

Eaton earns revenue by selling hardware, components, and related services across two main segments: electrical products and industrial systems. The company operates globally, with significant sales in North America, Europe, and Asia, and generates roughly $24 billion in annual revenue. Its large installed base and long-term contracts with industrial and utility customers create switching costs that are difficult for competitors to overcome. The biggest growth driver right now is surging demand for electrical infrastructure tied to data center expansion and the broader buildout of the power grid, though any slowdown in construction or capital spending could weigh on results.

Winston Score History

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+16.8% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

-9.3% YoY

YoY Growth Rate

Earnings declining

R&D Spend

$796M/ year

→ Flat (+0% vs prior year)

2.9% of revenue

Below sector average (4%)

Steady R&D investment year-over-year

Insider Activity

0.2%ownership

Relatively low insider ownership

Cash Position

Cash flow positive

$565M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth + cash flow

Eaton Corporation is a rare growth stock that's already generating positive cash flow while growing at 17%. The Winston Score doesn't fully credit this transition from "burner" to "earner."

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Share count falling — buybacks

−3.0% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 401.6M (2021) → 389.5M (2025)

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

0.0%

Thin — 0.0% gross margin

Operating Margin

0.0%

Thin — 0.0% operating margin

ROCE

0.0%

Weak — 0.0% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+12.7%

Fast-growing sales (12.7% YoY)

EPS YoY

+3.1%

Modest earnings growth (3.1% YoY)

Single-digit earnings growth — steady but not exciting.

EPS Consistency

6/8 quarters

Earnings grew in most of the last 8 quarters

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Cash Flow

Cash Conversion

119%

Turns 119% of profit into real cash

FCF Margin

14.9%

Converts sales into free cash efficiently (14.9%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity

1.10

Elevated debt (1.10)

Interest Cover

12.74x

Comfortably covers interest (12.7x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

39.4x

Pricey — P/E 39.4

P/E over 35. The market is pricing in heavy, sustained growth.

P/E vs Forward

+16.1

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (39.4 → 23.3)

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Dividends

Dividend Yield

1.02%

Small dividend — 1.02% yield

Modest yield. The bulk of any return needs to come from price appreciation.

Dividend Growth

+8.1%

Dividend growing modestly (8.1% YoY)

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