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Is NVent Electric (NYSE:NVT) A Risky Investment?

Is NVent Electric (NYSE:NVT) A Risky Investment?

nvent electric(紐交所:NVT)是一項風險投資嗎?
Simply Wall St ·  10/02 09:37

Warren Buffett famously said, 'Volatility is far from synonymous with risk.' So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. As with many other companies nVent Electric plc (NYSE:NVT) makes use of debt. But the real question is whether this debt is making the company risky.

禾倫·巴菲特(Warren Buffett)曾經說過:「波動性與風險並非同義詞。」因此,似乎明智的投資者知道,債務(通常參與破產)是評估公司風險程度時非常重要的因素。與許多其他公司一樣,nvent electric plc(紐交所:NVT)利用債務。但真正的問題是,這筆債務是否讓公司變得更加風險。

Why Does Debt Bring Risk?

爲什麼債務會帶來風險?

Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. When we think about a company's use of debt, we first look at cash and debt together.

債務可以幫助企業在新資本或自由現金流出現問題時度過難關。 資本主義的一部分是「創造性毀滅」的過程,即失敗的企業被銀行家無情地清算。 雖然這不太常見,但我們經常看到債務公司因債權人迫使他們以困境價格籌集資本而永久稀釋股東。 當然,債務可以成爲企業的重要工具,特別是對於資本密集型企業。 當我們考慮公司使用債務時,我們首先查看現金和債務的總和。

What Is nVent Electric's Net Debt?

nvent electric的淨債務是多少?

As you can see below, nVent Electric had US$1.77b of debt at June 2024, down from US$1.97b a year prior. However, it does have US$274.0m in cash offsetting this, leading to net debt of about US$1.49b.

如下所示,nvent electric在2024年6月的債務爲17.7億美元,較上一年的19.7億美元減少。然而,公司有27400萬美元的現金來抵銷這筆債務,導致淨債務約爲14.9億美元。

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NYSE:NVT Debt to Equity History October 2nd 2024
紐交所:NVT債務與股本歷史數據2024年10月2日

A Look At nVent Electric's Liabilities

查看nvent electric的負債情況

Zooming in on the latest balance sheet data, we can see that nVent Electric had liabilities of US$654.1m due within 12 months and liabilities of US$2.25b due beyond that. Offsetting this, it had US$274.0m in cash and US$615.2m in receivables that were due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by US$2.01b.

關注最新資產負債表數據,我們可以看到nvent electric在12個月內到期的負債爲65410萬美元,而到期日超過12個月的負債爲22.5億美元。與此相抵消,其12個月內到期的現金和61520萬美元的應收賬款合計爲27400萬美元。因此,其負債超過了其現金和(短期)應收賬款的總和201億美元。

Given nVent Electric has a humongous market capitalization of US$11.7b, it's hard to believe these liabilities pose much threat. But there are sufficient liabilities that we would certainly recommend shareholders continue to monitor the balance sheet, going forward.

考慮到nvent electric市值高達117億美元,很難相信這些負債構成了多大威脅。但是存在足夠的負債,我們肯定會建議股東繼續關注資產負債表的變化。

We use two main ratios to inform us about debt levels relative to earnings. The first is net debt divided by earnings before interest, tax, depreciation, and amortization (EBITDA), while the second is how many times its earnings before interest and tax (EBIT) covers its interest expense (or its interest cover, for short). The advantage of this approach is that we take into account both the absolute quantum of debt (with net debt to EBITDA) and the actual interest expenses associated with that debt (with its interest cover ratio).

BJ批發俱樂部控股公司的淨債務只有EBITDA的0.62倍。而其EBIT輕鬆覆蓋其利息費用,比例爲12.6倍。因此,我們對其超級保守的債務使用感到相當放心。雖然BJ批發俱樂部控股公司在EBIT方面沒有取得太多進展,但至少其盈利保持穩定。當分析債務水平時,資產負債表是顯然的切入點。但歸根結底,企業未來的盈利能力將決定BJ批發俱樂部控股公司能否隨着時間的推移加強資產負債表。因此,如果你要關注未來,可以查看一下這份免費的分析報告,了解分析師的盈利預測。

nVent Electric's net debt is sitting at a very reasonable 1.9 times its EBITDA, while its EBIT covered its interest expense just 6.7 times last year. While that doesn't worry us too much, it does suggest the interest payments are somewhat of a burden. nVent Electric grew its EBIT by 9.4% in the last year. That's far from incredible but it is a good thing, when it comes to paying off debt. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately the future profitability of the business will decide if nVent Electric can strengthen its balance sheet over time. So if you're focused on the future you can check out this free report showing analyst profit forecasts.

nvent electric的淨債務相對其EBITDA非常合理,爲1.9倍,而去年其EBIT只能覆蓋6.7倍的利息支出。雖然這並不太讓我們擔憂,但表明利息支付在一定程度上是個負擔。nvent electric去年的EBIT增長了9.4%。儘管遠非令人難以置信,但在償還債務方面是一個好消息。在分析債務時,資產負債表顯然是需要重點關注的領域。但最終業務未來的盈利能力將決定nvent electric是否能夠隨着時間加強其資產負債表。因此,如果你專注於未來,可以查看這份展示分析師利潤預測的免費報告。

Finally, a business needs free cash flow to pay off debt; accounting profits just don't cut it. So the logical step is to look at the proportion of that EBIT that is matched by actual free cash flow. During the last three years, nVent Electric produced sturdy free cash flow equating to 73% of its EBIT, about what we'd expect. This cold hard cash means it can reduce its debt when it wants to.

最後,業務需要自由現金流來償還債務;會計利潤僅不夠用。因此邏輯的下一步是關注這筆EBIT中被實際自由現金流匹配的比例。在過去三年中,nvent electric產生了堅固的自由現金流,相當於其EBIT的73%,與我們預期的大致相當。這筆冰冷的現金意味着它可以在需要時減少債務。

Our View

我們的觀點

The good news is that nVent Electric's demonstrated ability to convert EBIT to free cash flow delights us like a fluffy puppy does a toddler. And its EBIT growth rate is good too. When we consider the range of factors above, it looks like nVent Electric is pretty sensible with its use of debt. While that brings some risk, it can also enhance returns for shareholders. There's no doubt that we learn most about debt from the balance sheet. However, not all investment risk resides within the balance sheet - far from it. Be aware that nVent Electric is showing 2 warning signs in our investment analysis , you should know about...

好消息是,nvent electric表現出將EBIt轉化爲自由現金流的能力,讓我們開心如同小孩子看到一隻蓬鬆小狗一樣。而且其EBIt增長率也不錯。綜合考慮以上因素,nvent electric在債務使用上看起來相當明智。儘管帶來一定風險,但也能增強股東的回報。毫無疑問,我們從資產負債表中了解最多關於債務的信息。然而,並非所有的投資風險都存在於資產負債表內,遠非如此。請注意,在我們的投資分析中,nvent electric顯示出了2個警示信號,你應該了解一下...

When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free, right now.

說到底,有時候更容易集中精力關注根本不需要債務的公司。讀者可以免費訪問零淨債務增長股票列表。

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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這篇文章是Simply Wall St的一般性文章。我們根據歷史數據和分析師預測提供評論,只使用公正的方法論,我們的文章並不意味着提供任何金融建議。文章不構成買賣任何股票的建議,也不考慮您的目標或您的財務狀況。我們的目標是帶給您基本數據驅動的長期關注分析。請注意,我們的分析可能不考慮最新的價格敏感公司公告或定性材料。Simply Wall St沒有任何股票頭寸。

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