Ametek operates in two fields:

  • Electronic Instruments (EIG), which covers a wide range of precision analysis, test and measurement equipment for applications in industry, energy, aerospace and medicine. Examples of concrete applications include spectrometers, pressure and temperature sensors, radiation measurement tools, quality monitoring solutions in the energy sector, and vibration monitoring and fluid measurement systems in the aerospace sector. EIG accounts for 70% of sales.
  • Electromechanical devices (EMG division) also include a wide range of products, such as surgical components and instruments, automation solutions, motion control, thermal management devices and implantable components. EMG accounts for 30% of sales.

As already mentioned, Ametek's products are designed for multiple applications in a wide variety of fields. This enables the Group to adapt to changing market conditions. For example, in 2020, the year of the pandemic, the drop in demand in the oil sector was partly offset by needs in the medical sector. As a result, the modest downturn in growth was offset by a sharp rise in margins.

But being present in the right markets at the right time doesn't justify everything. You also need to know how to build the right fundamentals to ensure that a well-developed business model evolves over time. For this, Ametek has an exemplary CEO who rose through the ranks before taking the helm of the company in 2016. Very conservative, he and his management team focus on cash generation (free cash flow), margins and balance sheet strength.

So, if we look directly at the figures, Ametek has generated $7.75 billion in free cash flow over the last 10 years. This was spent on acquisitions ($8.7 billion) and dividends ($1.4 billion). Ametek makes several targeted acquisitions a year. The gap is naturally filled by debt ($1.9 bn, with $3.9 bn of debt issued and $2 bn of debt repaid), but this remains within perfectly acceptable standards for a growing company. The net debt/EBITDA ratio stands at 1.5.

In terms of the income statement, over the last 10 years, sales have risen from $4 billion to $6.6 billion, representing a CAGR (compound annual growth rate) of 5.6%. This is not exceptional (in absolute terms, many companies do better), but growth is steady and almost never below expectations. Profits, on the other hand, are growing much faster. They almost doubled over the period, from $584 million to $1.3 billion, representing a CAGR of 9.2%. All this was achieved thanks to a sharp rise in margins. Value creation is more than satisfactory.

Finally, the outlook for the future is good. Ametek holds significant market shares in niche markets, notably in instruments for the energy and industrial sectors. In commercial aviation, the Group is a major supplier of sensors.

In conclusion, Ametek has many strengths: good management, growth, reliable earnings releases, excellent visibility on the future, reconciliation of the interests of all stakeholders and shareholders in particular, and an optimal competitive position in many markets. Quality comes at a price. Ametek is trading at nearly 30 times earnings this year, which is in line with its track record of recent years. Investors don't yet seem to have fully grasped the full extent of the good results expected in the coming years. The company is valued at only 26 times 2025 earnings and 23 times 2026 earnings.