diff --git a/.gitignore b/.gitignore
index a24550ad54..954ecb2cb8 100644
--- a/.gitignore
+++ b/.gitignore
@@ -13,6 +13,9 @@ __pycache__/
 # Intellij Idea
 .idea
 
+# Vim
+*.swp
+
 # Hide some OS X stuff
 .DS_Store
 .AppleDouble
diff --git a/esphome/components/ethernet/ethernet_component.cpp b/esphome/components/ethernet/ethernet_component.cpp
index 22007caafa..52c184eef6 100644
--- a/esphome/components/ethernet/ethernet_component.cpp
+++ b/esphome/components/ethernet/ethernet_component.cpp
@@ -25,6 +25,13 @@ static const char *const TAG = "ethernet";
 
 EthernetComponent *global_eth_component;
 
+#define ESPHL_ERROR_CHECK(err, message) \
+  if (err != ESP_OK) { \
+    ESP_LOGE(TAG, message ": (%d) %s", err, esp_err_to_name(err)); \
+    this->mark_failed(); \
+    return; \
+  }
+
 EthernetComponent::EthernetComponent() { global_eth_component = this; }
 void EthernetComponent::setup() {
   ESP_LOGCONFIG(TAG, "Setting up Ethernet...");
@@ -36,103 +43,6 @@ void EthernetComponent::setup() {
     this->power_pin_->setup();
   }
 
-  this->start_connect_();
-
-#ifdef USE_MDNS
-  network_setup_mdns();
-#endif
-}
-void EthernetComponent::loop() {
-  const uint32_t now = millis();
-  if (!this->connected_ && !this->last_connected_ && now - this->connect_begin_ > 15000) {
-    ESP_LOGW(TAG, "Connecting via ethernet failed! Re-connecting...");
-    this->start_connect_();
-    return;
-  }
-
-  if (this->connected_ == this->last_connected_)
-    // nothing changed
-    return;
-
-  if (this->connected_) {
-    // connection established
-    ESP_LOGI(TAG, "Connected via Ethernet!");
-    this->dump_connect_params_();
-    this->status_clear_warning();
-  } else {
-    // connection lost
-    ESP_LOGW(TAG, "Connection via Ethernet lost! Re-connecting...");
-    this->start_connect_();
-  }
-
-  this->last_connected_ = this->connected_;
-
-  network_tick_mdns();
-}
-void EthernetComponent::dump_config() {
-  ESP_LOGCONFIG(TAG, "Ethernet:");
-  this->dump_connect_params_();
-  LOG_PIN("  Power Pin: ", this->power_pin_);
-  ESP_LOGCONFIG(TAG, "  MDC Pin: %u", this->mdc_pin_);
-  ESP_LOGCONFIG(TAG, "  MDIO Pin: %u", this->mdio_pin_);
-  ESP_LOGCONFIG(TAG, "  Type: %s", this->type_ == ETHERNET_TYPE_LAN8720 ? "LAN8720" : "TLK110");
-}
-float EthernetComponent::get_setup_priority() const { return setup_priority::WIFI; }
-bool EthernetComponent::can_proceed() { return this->is_connected(); }
-IPAddress EthernetComponent::get_ip_address() {
-  tcpip_adapter_ip_info_t ip;
-  tcpip_adapter_get_ip_info(TCPIP_ADAPTER_IF_ETH, &ip);
-  return IPAddress(ip.ip.addr);
-}
-
-void EthernetComponent::on_wifi_event_(system_event_id_t event, system_event_info_t info) {
-  const char *event_name;
-
-  switch (event) {
-    case SYSTEM_EVENT_ETH_START:
-      event_name = "ETH started";
-      break;
-    case SYSTEM_EVENT_ETH_STOP:
-      event_name = "ETH stopped";
-      this->connected_ = false;
-      break;
-    case SYSTEM_EVENT_ETH_CONNECTED:
-      event_name = "ETH connected";
-      break;
-    case SYSTEM_EVENT_ETH_DISCONNECTED:
-      event_name = "ETH disconnected";
-      this->connected_ = false;
-      break;
-    case SYSTEM_EVENT_ETH_GOT_IP:
-      event_name = "ETH Got IP";
-      this->connected_ = true;
-      break;
-    default:
-      return;
-  }
-
-  ESP_LOGV(TAG, "[Ethernet event] %s (num=%d)", event_name, event);
-}
-
-#define ESPHL_ERROR_CHECK(err, message) \
-  if (err != ESP_OK) { \
-    ESP_LOGE(TAG, message ": %d", err); \
-    this->mark_failed(); \
-    return; \
-  }
-
-void EthernetComponent::start_connect_() {
-  this->connect_begin_ = millis();
-  this->status_set_warning();
-
-  esp_err_t err;
-  if (this->initialized_) {
-    // already initialized
-    err = esp_eth_enable();
-    ESPHL_ERROR_CHECK(err, "ETH enable error");
-    return;
-  }
-
   switch (this->type_) {
     case ETHERNET_TYPE_LAN8720: {
       memcpy(&this->eth_config, &phy_lan8720_default_ethernet_config, sizeof(eth_config_t));
@@ -160,16 +70,111 @@ void EthernetComponent::start_connect_() {
 
   tcpipInit();
 
+  esp_err_t err;
   err = esp_eth_init(&this->eth_config);
-  if (err != ESP_OK) {
-    ESP_LOGE(TAG, "ETH init error: %d", err);
-    this->mark_failed();
-    return;
+  ESPHL_ERROR_CHECK(err, "ETH init error");
+  err = esp_eth_enable();
+  ESPHL_ERROR_CHECK(err, "ETH enable error");
+
+#ifdef USE_MDNS
+  network_setup_mdns();
+#endif
+}
+void EthernetComponent::loop() {
+  const uint32_t now = millis();
+
+  switch (this->state_) {
+    case EthernetComponentState::STOPPED:
+      if (this->started_) {
+        ESP_LOGI(TAG, "Starting ethernet connection");
+        this->state_ = EthernetComponentState::CONNECTING;
+        this->start_connect_();
+      }
+      break;
+    case EthernetComponentState::CONNECTING:
+      if (!this->started_) {
+        ESP_LOGI(TAG, "Stopped ethernet connection");
+        this->state_ = EthernetComponentState::STOPPED;
+      } else if (this->connected_) {
+        // connection established
+        ESP_LOGI(TAG, "Connected via Ethernet!");
+        this->state_ = EthernetComponentState::CONNECTED;
+
+        this->dump_connect_params_();
+        this->status_clear_warning();
+
+        network_tick_mdns();
+      } else if (now - this->connect_begin_ > 15000) {
+        ESP_LOGW(TAG, "Connecting via ethernet failed! Re-connecting...");
+        this->start_connect_();
+      }
+      break;
+    case EthernetComponentState::CONNECTED:
+      if (!this->started_) {
+        ESP_LOGI(TAG, "Stopped ethernet connection");
+        this->state_ = EthernetComponentState::STOPPED;
+      } else if (!this->connected_) {
+        ESP_LOGW(TAG, "Connection via Ethernet lost! Re-connecting...");
+        this->state_ = EthernetComponentState::CONNECTING;
+        this->start_connect_();
+      }
+      break;
+  }
+}
+void EthernetComponent::dump_config() {
+  ESP_LOGCONFIG(TAG, "Ethernet:");
+  this->dump_connect_params_();
+  LOG_PIN("  Power Pin: ", this->power_pin_);
+  ESP_LOGCONFIG(TAG, "  MDC Pin: %u", this->mdc_pin_);
+  ESP_LOGCONFIG(TAG, "  MDIO Pin: %u", this->mdio_pin_);
+  ESP_LOGCONFIG(TAG, "  Type: %s", this->type_ == ETHERNET_TYPE_LAN8720 ? "LAN8720" : "TLK110");
+}
+float EthernetComponent::get_setup_priority() const { return setup_priority::WIFI; }
+bool EthernetComponent::can_proceed() { return this->is_connected(); }
+IPAddress EthernetComponent::get_ip_address() {
+  tcpip_adapter_ip_info_t ip;
+  tcpip_adapter_get_ip_info(TCPIP_ADAPTER_IF_ETH, &ip);
+  return IPAddress(ip.ip.addr);
+}
+
+void EthernetComponent::on_wifi_event_(system_event_id_t event, system_event_info_t info) {
+  const char *event_name;
+
+  switch (event) {
+    case SYSTEM_EVENT_ETH_START:
+      event_name = "ETH started";
+      this->started_ = true;
+      break;
+    case SYSTEM_EVENT_ETH_STOP:
+      event_name = "ETH stopped";
+      this->started_ = false;
+      this->connected_ = false;
+      break;
+    case SYSTEM_EVENT_ETH_CONNECTED:
+      event_name = "ETH connected";
+      break;
+    case SYSTEM_EVENT_ETH_DISCONNECTED:
+      event_name = "ETH disconnected";
+      this->connected_ = false;
+      break;
+    case SYSTEM_EVENT_ETH_GOT_IP:
+      event_name = "ETH Got IP";
+      this->connected_ = true;
+      break;
+    default:
+      return;
   }
 
-  this->initialized_ = true;
+  ESP_LOGV(TAG, "[Ethernet event] %s (num=%d)", event_name, event);
+}
 
-  tcpip_adapter_set_hostname(TCPIP_ADAPTER_IF_ETH, App.get_name().c_str());
+void EthernetComponent::start_connect_() {
+  this->connect_begin_ = millis();
+  this->status_set_warning();
+
+  esp_err_t err;
+  err = tcpip_adapter_set_hostname(TCPIP_ADAPTER_IF_ETH, App.get_name().c_str());
+  ESPHL_ERROR_CHECK(err, "ETH set hostname error");
 
   tcpip_adapter_ip_info_t info;
   if (this->manual_ip_.has_value()) {
@@ -220,7 +225,7 @@ void EthernetComponent::eth_phy_power_enable_(bool enable) {
   delay(1);
   global_eth_component->orig_power_enable_fun_(enable);
 }
-bool EthernetComponent::is_connected() { return this->connected_ && this->last_connected_; }
+bool EthernetComponent::is_connected() { return this->state_ == EthernetComponentState::CONNECTED; }
 void EthernetComponent::dump_connect_params_() {
   tcpip_adapter_ip_info_t ip;
   tcpip_adapter_get_ip_info(TCPIP_ADAPTER_IF_ETH, &ip);
diff --git a/esphome/components/ethernet/ethernet_component.h b/esphome/components/ethernet/ethernet_component.h
index 2dbd8ccd9d..326cd1edea 100644
--- a/esphome/components/ethernet/ethernet_component.h
+++ b/esphome/components/ethernet/ethernet_component.h
@@ -26,6 +26,12 @@ struct ManualIP {
   IPAddress dns2;  ///< The second DNS server. 0.0.0.0 for default.
 };
 
+enum class EthernetComponentState {
+  STOPPED,
+  CONNECTING,
+  CONNECTED,
+};
+
 class EthernetComponent : public Component {
  public:
   EthernetComponent();
@@ -65,9 +71,9 @@ class EthernetComponent : public Component {
   eth_clock_mode_t clk_mode_{ETH_CLOCK_GPIO0_IN};
   optional<ManualIP> manual_ip_{};
 
-  bool initialized_{false};
+  bool started_{false};
   bool connected_{false};
-  bool last_connected_{false};
+  EthernetComponentState state_{EthernetComponentState::STOPPED};
   uint32_t connect_begin_;
   eth_config_t eth_config;
   eth_phy_power_enable_func orig_power_enable_fun_;