AVERY DENNISON CORP (AVY) Stock Fundamental Analysis
NYSE:AVY - New York Stock Exchange, Inc. - US0536111091 - Common Stock - Currency: USD
AVY gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 22 industry peers in the Containers & Packaging industry. AVY gets an excellent profitability rating and is at the same time showing great financial health properties. AVY is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
AVY had positive earnings in the past year.
AVY had a positive operating cash flow in the past year.
AVY had positive earnings in each of the past 5 years.
In the past 5 years AVY always reported a positive cash flow from operatings.
1.2 Ratios
AVY has a better Return On Assets (8.30%) than 95.45% of its industry peers.
The Return On Equity of AVY (32.29%) is better than 95.45% of its industry peers.
With an excellent Return On Invested Capital value of 14.89%, AVY belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for AVY is significantly above the industry average of 7.54%.
The last Return On Invested Capital (14.89%) for AVY is above the 3 year average (14.25%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.3% | ||
| ROE | 32.29% | ||
| ROIC | 14.89% |
ROA(3y)8.01%
ROA(5y)8.49%
ROE(3y)30.46%
ROE(5y)33.45%
ROIC(3y)14.25%
ROIC(5y)14.29%
1.3 Margins
AVY's Profit Margin of 8.14% is amongst the best of the industry. AVY outperforms 86.36% of its industry peers.
AVY's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 12.82%, AVY belongs to the best of the industry, outperforming 81.82% of the companies in the same industry.
In the last couple of years the Operating Margin of AVY has grown nicely.
The Gross Margin of AVY (28.57%) is better than 77.27% of its industry peers.
In the last couple of years the Gross Margin of AVY has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.82% | ||
| PM (TTM) | 8.14% | ||
| GM | 28.57% |
OM growth 3Y0.21%
OM growth 5Y1.72%
PM growth 3Y-2.93%
PM growth 5Y13.39%
GM growth 3Y1.67%
GM growth 5Y1.42%
2. Health
2.1 Basic Checks
AVY has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for AVY has been reduced compared to 1 year ago.
Compared to 5 years ago, AVY has less shares outstanding
The debt/assets ratio for AVY has been reduced compared to a year ago.
2.2 Solvency
AVY has an Altman-Z score of 3.58. This indicates that AVY is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.58, AVY belongs to the top of the industry, outperforming 90.91% of the companies in the same industry.
AVY has a debt to FCF ratio of 5.90. This is a neutral value as AVY would need 5.90 years to pay back of all of its debts.
The Debt to FCF ratio of AVY (5.90) is better than 90.91% of its industry peers.
A Debt/Equity ratio of 1.19 is on the high side and indicates that AVY has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.19, AVY is in the better half of the industry, outperforming 63.64% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.19 | ||
| Debt/FCF | 5.9 | ||
| Altman-Z | 3.58 |
ROIC/WACC1.95
WACC7.63%
2.3 Liquidity
AVY has a Current Ratio of 1.04. This is a normal value and indicates that AVY is financially healthy and should not expect problems in meeting its short term obligations.
AVY has a worse Current ratio (1.04) than 86.36% of its industry peers.
A Quick Ratio of 0.70 indicates that AVY may have some problems paying its short term obligations.
The Quick ratio of AVY (0.70) is worse than 72.73% of its industry peers.
AVY does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.04 | ||
| Quick Ratio | 0.7 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 0.11% over the past year.
Measured over the past 5 years, AVY shows a small growth in Earnings Per Share. The EPS has been growing by 7.41% on average per year.
AVY shows a small growth in Revenue. In the last year, the Revenue has grown by 1.66%.
The Revenue has been growing slightly by 4.37% on average over the past years.
EPS 1Y (TTM)0.11%
EPS 3Y1.83%
EPS 5Y7.41%
EPS Q2Q%0%
Revenue 1Y (TTM)1.66%
Revenue growth 3Y1.36%
Revenue growth 5Y4.37%
Sales Q2Q%-0.66%
3.2 Future
Based on estimates for the next years, AVY will show a small growth in Earnings Per Share. The EPS will grow by 7.39% on average per year.
AVY is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.79% yearly.
EPS Next Y3.47%
EPS Next 2Y7.4%
EPS Next 3Y8.67%
EPS Next 5Y7.39%
Revenue Next Year1.21%
Revenue Next 2Y2.52%
Revenue Next 3Y3.18%
Revenue Next 5Y3.79%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
AVY is valuated rather expensively with a Price/Earnings ratio of 17.75.
AVY's Price/Earnings is on the same level as the industry average.
AVY's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.24.
A Price/Forward Earnings ratio of 15.40 indicates a correct valuation of AVY.
AVY's Price/Forward Earnings is on the same level as the industry average.
AVY's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 36.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.75 | ||
| Fwd PE | 15.4 |
4.2 Price Multiples
AVY's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, AVY is valued a bit cheaper than the industry average as 72.73% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.68 | ||
| EV/EBITDA | 11.42 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates AVY does not grow enough to justify the current Price/Earnings ratio.
AVY has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)5.11
PEG (5Y)2.4
EPS Next 2Y7.4%
EPS Next 3Y8.67%
5. Dividend
5.1 Amount
AVY has a Yearly Dividend Yield of 2.24%. Purely for dividend investing, there may be better candidates out there.
AVY's Dividend Yield is comparable with the industry average which is at 3.17.
Compared to an average S&P500 Dividend Yield of 2.40, AVY has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.24% |
5.2 History
On average, the dividend of AVY grows each year by 14.44%, which is quite nice.
AVY has been paying a dividend for at least 10 years, so it has a reliable track record.
AVY has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)14.44%
Div Incr Years14
Div Non Decr Years14
5.3 Sustainability
AVY pays out 39.97% of its income as dividend. This is a sustainable payout ratio.
AVY's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP39.97%
EPS Next 2Y7.4%
EPS Next 3Y8.67%
167.35
+1.53 (+0.92%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryContainers & Packaging
Earnings (Last)
Earnings (Next)
Inst Owners96.24%
Inst Owner Change-1%
Ins Owners0.63%
Ins Owner Change5.22%
Market Cap13.05B
Analysts73.33
Price Target199.43 (19.17%)
Short Float %2.46%
Short Ratio2.78
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.24% |
Yearly Dividend3.46
Dividend Growth(5Y)14.44%
DP39.97%
Div Incr Years14
Div Non Decr Years14
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.85%
Min EPS beat(2)-1.77%
Max EPS beat(2)0.07%
EPS beat(4)1
Avg EPS beat(4)-0.83%
Min EPS beat(4)-1.77%
Max EPS beat(4)0.07%
EPS beat(8)4
Avg EPS beat(8)3.3%
EPS beat(12)5
Avg EPS beat(12)0.25%
EPS beat(16)8
Avg EPS beat(16)1.63%
Revenue beat(2)0
Avg Revenue beat(2)-1.46%
Min Revenue beat(2)-1.96%
Max Revenue beat(2)-0.95%
Revenue beat(4)0
Avg Revenue beat(4)-1.46%
Min Revenue beat(4)-1.96%
Max Revenue beat(4)-0.95%
Revenue beat(8)1
Avg Revenue beat(8)-1.24%
Revenue beat(12)1
Avg Revenue beat(12)-2.35%
Revenue beat(16)4
Avg Revenue beat(16)-1.3%
PT rev (1m)1.27%
PT rev (3m)-4.69%
EPS NQ rev (1m)-2.44%
EPS NQ rev (3m)-7.38%
EPS NY rev (1m)0.04%
EPS NY rev (3m)-2.59%
Revenue NQ rev (1m)0.31%
Revenue NQ rev (3m)-0.58%
Revenue NY rev (1m)0.17%
Revenue NY rev (3m)-0.38%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.75 | ||
| Fwd PE | 15.4 | ||
| P/S | 1.49 | ||
| P/FCF | 21.68 | ||
| P/OCF | 16.04 | ||
| P/B | 5.93 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.42 |
EPS(TTM)9.43
EY5.63%
EPS(NY)10.87
Fwd EY6.49%
FCF(TTM)7.72
FCFY4.61%
OCF(TTM)10.44
OCFY6.24%
SpS112.05
BVpS28.23
TBVpS-6.96
PEG (NY)5.11
PEG (5Y)2.4
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.3% | ||
| ROE | 32.29% | ||
| ROCE | 20.35% | ||
| ROIC | 14.89% | ||
| ROICexc | 15.49% | ||
| ROICexgc | 32.2% | ||
| OM | 12.82% | ||
| PM (TTM) | 8.14% | ||
| GM | 28.57% | ||
| FCFM | 6.89% |
ROA(3y)8.01%
ROA(5y)8.49%
ROE(3y)30.46%
ROE(5y)33.45%
ROIC(3y)14.25%
ROIC(5y)14.29%
ROICexc(3y)14.91%
ROICexc(5y)14.95%
ROICexgc(3y)33.61%
ROICexgc(5y)31.22%
ROCE(3y)19.49%
ROCE(5y)19.77%
ROICexcg growth 3Y5.53%
ROICexcg growth 5Y1.48%
ROICexc growth 3Y3.87%
ROICexc growth 5Y-4.31%
OM growth 3Y0.21%
OM growth 5Y1.72%
PM growth 3Y-2.93%
PM growth 5Y13.39%
GM growth 3Y1.67%
GM growth 5Y1.42%
F-Score6
Asset Turnover1.02
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.19 | ||
| Debt/FCF | 5.9 | ||
| Debt/EBITDA | 1.83 | ||
| Cap/Depr | 67.24% | ||
| Cap/Sales | 2.42% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 56.7% | ||
| Profit Quality | 84.67% | ||
| Current Ratio | 1.04 | ||
| Quick Ratio | 0.7 | ||
| Altman-Z | 3.58 |
F-Score6
WACC7.63%
ROIC/WACC1.95
Cap/Depr(3y)91.68%
Cap/Depr(5y)98.6%
Cap/Sales(3y)3.15%
Cap/Sales(5y)3.16%
Profit Quality(3y)98.07%
Profit Quality(5y)98.94%
High Growth Momentum
Growth
EPS 1Y (TTM)0.11%
EPS 3Y1.83%
EPS 5Y7.41%
EPS Q2Q%0%
EPS Next Y3.47%
EPS Next 2Y7.4%
EPS Next 3Y8.67%
EPS Next 5Y7.39%
Revenue 1Y (TTM)1.66%
Revenue growth 3Y1.36%
Revenue growth 5Y4.37%
Sales Q2Q%-0.66%
Revenue Next Year1.21%
Revenue Next 2Y2.52%
Revenue Next 3Y3.18%
Revenue Next 5Y3.79%
EBIT growth 1Y3.93%
EBIT growth 3Y1.58%
EBIT growth 5Y6.16%
EBIT Next Year27.88%
EBIT Next 3Y13.24%
EBIT Next 5Y8.81%
FCF growth 1Y33.96%
FCF growth 3Y-3.37%
FCF growth 5Y7.39%
OCF growth 1Y7.35%
OCF growth 3Y-3.56%
OCF growth 5Y4.69%