Espey Mfg & Electronics Corp (NYSE: ESP)

Sector: Industrials Industry: Electrical Equipment & Parts CIK: 0000033533
Market Cap 156.70 Mn
P/B 2.95
P/E 16.30
P/S 3.81
ROIC (Qtr) 14.58
Div Yield % 2.99
Rev 1y % (Qtr) -10.82
Total Debt (Qtr) 0.00
Debt/Equity (Qtr) 0.00
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About

Espey Mfg. & Electronics Corp., or ESP, is a company that operates in the power electronics design and original equipment manufacturing (OEM) industry. It is listed on the NYSE American under the symbol "ESP" and is known for developing and delivering highly reliable products for use in military and severe environment applications. ESP's main business activities involve the design, manufacturing, and testing of power supplies, power converters, filters, power transformers, magnetic components, power distribution equipment, UPS systems, antennas,...

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Investment thesis

Bull case

  • Operating cash flow of 17.13M provides strong 15.95x coverage of stock compensation 1.07M, indicating sustainable incentive practices.
  • Strong operating cash flow of 17.13M provides 3.70x coverage of SG&A expenses 4.63M, showing efficient operational cost management.
  • Robust free cash flow of 11.71M exceeds capital expenditure of 5.42M by 2.16x, indicating strong organic growth funding capability.
  • Operating cash flow of 17.13M provides strong 78.35x coverage of tax liabilities 218689, showing excellent fiscal position.
  • Cash reserves of 17.76M provide comfortable 81.20x coverage of tax obligations 218689, showing strong fiscal management.

Bear case

  • Operating cash flow of 17.13M barely covers its investment activities of (5.27M), with a coverage ratio of -3.25, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 17.13M provides thin coverage of dividend payments of (4.75M) with a -3.61 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Operating cash flow of 17.13M provides insufficient coverage of deferred revenue obligations of 26.26M, which is 0.65x, raising concerns about future service delivery capabilities.
  • Tangible assets of 85.17M provide limited backing for working capital of 48.92M, which is 1.74x, suggesting increased operational risk in market downturns.
  • Short-term investments of 25.41M exceed receivables of 8.23M by 3.09x, indicating potentially inefficient capital allocation given collection cycle needs.

Accounting Standards Update Breakdown of Revenue (2024)

Accounting Standards Update Breakdown of Revenue (2024)

Peer comparison

Companies in the Electrical Equipment & Parts
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 VRT Vertiv Holdings Co 93.00 Bn 69.78 9.09 3.16 Bn
2 BE Bloom Energy Corp 34.73 Bn -392.76 17.16 2.99 Bn
3 HUBB Hubbell Inc 27.97 Bn 31.52 4.78 2.33 Bn
4 NVT nVent Electric plc 19.43 Bn 76.81 8.40 1.56 Bn
5 AYI Acuity Inc. (De) 12.85 Bn 109.95 6.86 0.91 Bn
6 AEIS Advanced Energy Industries Inc 11.80 Bn 79.52 6.56 0.68 Bn
7 NVX NOVONIX Ltd 11.53 Bn -174.00 1,943.36 -
8 ENS EnerSys 6.79 Bn 21.71 1.82 1.18 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.58 3.49
EV to Cash from Ops. EV/CFO 7.85 9.10
EV to Debt EV to Debt 0.00 113.17
EV to EBIT EV/EBIT 11.68 -17.64
EV to EBITDA EV/EBITDA 13.45 3.56
EV to Free Cash Flow [EV/FCF] EV/FCF 11.48 39.13
EV to Market Cap EV to Market Cap 0.86 2.59
EV to Revenue EV/Rev 3.27 77.74
Price to Book Value [P/B] P/B 2.95 4.98
Price to Earnings [P/E] P/E 16.30 23.89
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.02 -2.92
Dividend Payout Ratio % Div Payout % (Qtr) 48.70 3.27
Dividend per Basic Share Div per Share (Qtr) 1.75 0.37
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 41.12 1.79
Interest Coverage Interest Coverage 0.00 -16.86
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -67.29 -135.37
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 121.21 92.17
Dividend Growth (1y) % Div 1y % (Qtr) 100.00 5.22
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 49.43 -45.52
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 34.97 -56.26
EBIT Growth (1y) % EBIT 1y % (Qtr) 44.93 -64.20
EBT Growth (1y) % EBT 1y % (Qtr) 44.93 8.52
EPS Growth (1y) % EPS 1y % (Qtr) 41.34 13.91
FCF Growth (1y) % FCF 1y % (Qtr) 43.14 -66.58
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 26.00 15.53
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.48 0.63
Cash Payout Ratio Cash Payout (Qtr) 0.21 -0.10
Cash Ratio Cash Ratio (Qtr) 0.56 3.50
Current Ratio Curr Ratio (Qtr) 2.53 5.07
Debt to Equity Ratio Debt/Equity (Qtr) 0.00 0.41
Interest Cover Ratio Interest Cover Ratio 0.00 -16.86
Times Interest Earned Times Interest Earned 0.00 -16.86
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 29.20 -1,947.23
EBIT Margin % EBIT Margin % (Qtr) 27.99 -2,051.19
EBT Margin % EBT Margin % (Qtr) 27.99 -2,170.94
Gross Margin % Gross Margin % (Qtr) 34.40 2.02
Net Profit Margin % Net Margin % (Qtr) 23.40 -2,202.04