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Here's How Much You'd Have If You Invested $1000 in Eaton a Decade Ago

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How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.

The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.

What if you'd invested in Eaton (ETN - Free Report) 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 99,000 employees in 59 countries. The company was founded in 1916.

During first-quarter 2020, Eaton re-segmented certain reportable segments due to a reorganization of businesses. The new reportable segments are Electrical Americas and Electrical Global, which include Legacy Electrical Products and Electrical Systems and Services segments. The Filtration and Golf Grip businesses previously included in the Hydraulics segment and electrical aerospace connectors business, which was earlier under the Electrical Products segment, have been added to the Aerospace reportable segment, as part of the reorganization. Post reorganization, Eaton's reportable segments are Electrical Americas, Electrical Global, Hydraulics, 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 are primarily produced and sold outside of North and South America.

Vehicle segment includes the company's erstwhile truck and automotive segments. The truck segment designs, manufactures and markets powertrain systems and other components for commercial vehicle markets. Aerospace segment is a supplier of aerospace fuel, hydraulics and pneumatic systems for commercial and military use.

The eMobility segment focus on two technologies within electrical vehicles, namely Power electronics & conversion and Power distribution & circuit protection.

Eaton's segments — Electrical Americas, Electrical Global, Hydraulics, Aerospace, Vehicle and eMobility — contributed 37.4%, 26.3%, 10.3%, 12.5%, 12.4% and 1.1 %, respectively, to 2020 revenues.

The company closed the Hydraulics business sale to Danfoss for $3.3 billion on Aug 2, 2021.
 

Bottom Line

Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Eaton a decade ago, you're probably feeling pretty good about your investment today.

A $1000 investment made in August 2011 would be worth $4,226.45, or a 322.64% gain, as of August 30, 2021, according to our calculations. Investors should note that this return excludes dividends but includes price increases.

Compare this to the S&P 500's rally of 283.19% and gold's return of -2.13% over the same time frame.

Analysts are anticipating more upside for ETN.

Eaton’s second-quarter earnings and revenues are better than expected. The company is benefiting from cost-saving initiatives and widespread operations. R&D investments help it develop advanced products that are enabling it to provide easy power management solutions to customers. Spin-off of non-core businesses and acquisitions will boost operations. Eaton’s restructuring actions are in sync with long-term objectives. Strong cash flow generation is supporting Eaton’s shareholder-friendly moves. Its shares have outperformed the industry in the past six months. However, Eaton’s world-wide operations expose it to unpredictable currency translation, cyber-attacks and security breaches, all of which might impact operations. Shortage of raw materials and supplier insolvencies might impact production and operation.

Over the past four weeks, shares have rallied 7.58%, and there have been 8 higher earnings estimate revisions in the past two months for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.

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