We are a power management company, uniquely positioned to optimize combinations of electrical, hydraulic and mechanical power. Our portfolio of market-leading businesses are in industries where advanced technologies, reliability, safety and a track record of performance matter.
Our broad array of products is found in mission-critical applications, protecting people and assets, while improving productivity. Our highly engineered products help our customers meet stringent code and regulatory requirements. And our large installed base of equipment around the world creates opportunities for predictable, high-margin aftermarket sales.
With our four businesses, we have a long history of improving margins and reducing earnings volatility. Each of our businesses is evaluated against a set of criteria that reflects the characteristics we believe create an attractive business: Leadership in large global markets, above-average growth potential, high-margin potential, high returns and consistent profitability.
Eaton is delivering on the 5-year financial targets outlined in 2015, and our businesses are well-positioned to perform as we enter a period of attractive market growth. Our strategy for improving our business and cost structure is working, as we continue to increase margins and grow our earnings per share. Our cash flow remains strong, allowing us to return cash to shareholders through dividend and share repurchases, while growing our businesses through strategic acquisitions. We are also investing in the future of our businesses to accelerate organic growth through research and development and capital spending. Over the past 5 years, we have improved our balance sheet. Our credit rating is strong with a split A-/BBB+ rating from the agencies. In addition, our pension funds are well funded, with our US qualified pension funding exceeding 95 % at the end of the third quarter of 2018.
Eaton is in the right markets, executing on the right strategy and uniquely positioned at this time for strong earnings growth over the period 2018-2020.
Here's more on what Eaton is doing to drive long-term value for our shareholders:
Strategic growth initiatives – Organic growth continues to play a central role in how we define success across our company. We are focused in three areas that we believe will drive significant growth in the future: technology differentiation, leveraging our channel and service strengths, and delivering superior product value for our customers. We’re investing in emerging technologies and intelligent products – the building blocks of the Internet of Things – where we have strategic advantages that will allow us to win in our increasingly connected world. In these products, we are going beyond collecting and reporting data; we’re working to create value for our customers by improving reliability, safety, and efficiency. In addition, our eMobility business, which combines elements of our Electrical and Vehicle businesses to deliver electric vehicle systems, is poised for growth as consumer demand increases and vehicle manufacturers are looking to strengthen their product portfolios.
Expanding margins through operational efficiency – We’ve expanded our margins by reducing structural costs, improving how we run our operations and leveraging the scale of our global enterprise. This trend is expected to continue beyond 2020.
Disciplined capital allocation – We are generating strong cash flow that enables us to invest in the business, pursue strategic acquisitions and consistently return cash to our shareholders through a dividend that grows with earnings and share repurchases. Eaton has paid dividends on its common shares every year since 1923.