AVERY DENNISON CORP (AVY) Stock Fundamental Analysis
NYSE:AVY - New York Stock Exchange, Inc. - US0536111091 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to AVY. AVY was compared to 23 industry peers in the Containers & Packaging industry. While AVY belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. AVY is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year AVY was profitable.
AVY had a positive operating cash flow in the past year.
In the past 5 years AVY has always been profitable.
AVY had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
AVY has a Return On Assets of 8.36%. This is amongst the best in the industry. AVY outperforms 86.96% of its industry peers.
AVY's Return On Equity of 32.20% is amongst the best of the industry. AVY outperforms 91.30% of its industry peers.
Looking at the Return On Invested Capital, with a value of 14.94%, AVY belongs to the top 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 7.70%.
The 3 year average ROIC (14.25%) for AVY is below the current ROIC(14.94%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.36% | ||
| ROE | 32.2% | ||
| ROIC | 14.94% |
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
Looking at the Profit Margin, with a value of 7.98%, AVY belongs to the top of the industry, outperforming 86.96% of the companies in the same industry.
AVY's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 12.60%, AVY is in the better half of the industry, outperforming 78.26% of the companies in the same industry.
AVY's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 28.79%, AVY belongs to the top of the industry, outperforming 82.61% of the companies in the same industry.
AVY's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.6% | ||
| PM (TTM) | 7.98% | ||
| GM | 28.79% |
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.
Compared to 1 year ago, AVY has less shares outstanding
AVY has less shares outstanding than it did 5 years ago.
AVY has a better debt/assets ratio than last year.
2.2 Solvency
AVY has an Altman-Z score of 3.69. This indicates that AVY is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of AVY (3.69) is better than 91.30% of its industry peers.
AVY has a debt to FCF ratio of 6.02. This is a slightly negative value and a sign of low solvency as AVY would need 6.02 years to pay back of all of its debts.
The Debt to FCF ratio of AVY (6.02) is better than 91.30% 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.
AVY has a Debt to Equity ratio of 1.19. This is in the better half of the industry: AVY outperforms 65.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.19 | ||
| Debt/FCF | 6.02 | ||
| Altman-Z | 3.69 |
ROIC/WACC1.96
WACC7.62%
2.3 Liquidity
AVY has a Current Ratio of 1.03. 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 (1.03) than 73.91% of its industry peers.
A Quick Ratio of 0.68 indicates that AVY may have some problems paying its short term obligations.
With a Quick ratio value of 0.68, AVY is not doing good in the industry: 73.91% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.03 | ||
| Quick Ratio | 0.68 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 5.72% over the past year.
AVY shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.41% yearly.
AVY shows a small growth in Revenue. In the last year, the Revenue has grown by 3.57%.
AVY shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.37% yearly.
EPS 1Y (TTM)5.72%
EPS 3Y1.83%
EPS 5Y7.41%
EPS Q2Q%0.44%
Revenue 1Y (TTM)3.57%
Revenue growth 3Y1.36%
Revenue growth 5Y4.37%
Sales Q2Q%-0.14%
3.2 Future
The Earnings Per Share is expected to grow by 7.69% on average over the next years.
AVY is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.41% yearly.
EPS Next Y6.22%
EPS Next 2Y8.89%
EPS Next 3Y9.72%
EPS Next 5Y7.69%
Revenue Next Year1.59%
Revenue Next 2Y2.87%
Revenue Next 3Y3.66%
Revenue Next 5Y4.41%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 17.97, which indicates a rather expensive current valuation of AVY.
The rest of the industry has a similar Price/Earnings ratio as AVY.
AVY's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.85.
Based on the Price/Forward Earnings ratio of 15.17, the valuation of AVY can be described as correct.
Based on the Price/Forward Earnings ratio, AVY is valued a bit more expensive than 65.22% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.77, AVY is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.97 | ||
| Fwd PE | 15.17 |
4.2 Price Multiples
65.22% of the companies in the same industry are cheaper than AVY, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AVY is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.27 | ||
| EV/EBITDA | 11.85 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
AVY has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.89
PEG (5Y)2.43
EPS Next 2Y8.89%
EPS Next 3Y9.72%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.19%, AVY has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.23, AVY has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.45, AVY has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.19% |
5.2 History
The dividend of AVY is nicely growing with an annual growth rate of 14.44%!
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
40.30% of the earnings are spent on dividend by AVY. This is a bit on the high side, but may be sustainable.
The dividend of AVY is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP40.3%
EPS Next 2Y8.89%
EPS Next 3Y9.72%
169.41
-1.7 (-0.99%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryContainers & Packaging
Earnings (Last)
Earnings (Next)
Inst Owners94.74%
Inst Owner Change1.08%
Ins Owners0.55%
Ins Owner Change4.1%
Market Cap13.38B
Analysts77.78
Price Target209.25 (23.52%)
Short Float %2.84%
Short Ratio2.67
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.19% |
Yearly Dividend3.46
Dividend Growth(5Y)14.44%
DP40.3%
Div Incr Years14
Div Non Decr Years14
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.32%
Min EPS beat(2)-1.77%
Max EPS beat(2)-0.87%
EPS beat(4)1
Avg EPS beat(4)0.69%
Min EPS beat(4)-1.77%
Max EPS beat(4)6.18%
EPS beat(8)3
Avg EPS beat(8)2.75%
EPS beat(12)5
Avg EPS beat(12)1.12%
EPS beat(16)8
Avg EPS beat(16)2.14%
Revenue beat(2)0
Avg Revenue beat(2)-1.07%
Min Revenue beat(2)-1.19%
Max Revenue beat(2)-0.95%
Revenue beat(4)1
Avg Revenue beat(4)-0.62%
Min Revenue beat(4)-1.74%
Max Revenue beat(4)1.42%
Revenue beat(8)1
Avg Revenue beat(8)-1.49%
Revenue beat(12)1
Avg Revenue beat(12)-2.2%
Revenue beat(16)5
Avg Revenue beat(16)-0.53%
PT rev (1m)-2.76%
PT rev (3m)-12.71%
EPS NQ rev (1m)-2.98%
EPS NQ rev (3m)-7.32%
EPS NY rev (1m)-1.1%
EPS NY rev (3m)-5.83%
Revenue NQ rev (1m)-0.66%
Revenue NQ rev (3m)-3.9%
Revenue NY rev (1m)-0.47%
Revenue NY rev (3m)-2.93%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.97 | ||
| Fwd PE | 15.17 | ||
| P/S | 1.53 | ||
| P/FCF | 23.27 | ||
| P/OCF | 16.67 | ||
| P/B | 6.16 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.85 |
EPS(TTM)9.43
EY5.57%
EPS(NY)11.17
Fwd EY6.59%
FCF(TTM)7.28
FCFY4.3%
OCF(TTM)10.16
OCFY6%
SpS110.84
BVpS27.49
TBVpS-7.04
PEG (NY)2.89
PEG (5Y)2.43
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.36% | ||
| ROE | 32.2% | ||
| ROCE | 20.42% | ||
| ROIC | 14.94% | ||
| ROICexc | 15.5% | ||
| ROICexgc | 32.54% | ||
| OM | 12.6% | ||
| PM (TTM) | 7.98% | ||
| GM | 28.79% | ||
| FCFM | 6.57% |
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-Score8
Asset Turnover1.05
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.19 | ||
| Debt/FCF | 6.02 | ||
| Debt/EBITDA | 1.82 | ||
| Cap/Depr | 72.79% | ||
| Cap/Sales | 2.6% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 56.7% | ||
| Profit Quality | 82.28% | ||
| Current Ratio | 1.03 | ||
| Quick Ratio | 0.68 | ||
| Altman-Z | 3.69 |
F-Score8
WACC7.62%
ROIC/WACC1.96
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)5.72%
EPS 3Y1.83%
EPS 5Y7.41%
EPS Q2Q%0.44%
EPS Next Y6.22%
EPS Next 2Y8.89%
EPS Next 3Y9.72%
EPS Next 5Y7.69%
Revenue 1Y (TTM)3.57%
Revenue growth 3Y1.36%
Revenue growth 5Y4.37%
Sales Q2Q%-0.14%
Revenue Next Year1.59%
Revenue Next 2Y2.87%
Revenue Next 3Y3.66%
Revenue Next 5Y4.41%
EBIT growth 1Y7.83%
EBIT growth 3Y1.58%
EBIT growth 5Y6.16%
EBIT Next Year30.24%
EBIT Next 3Y14.03%
EBIT Next 5Y9.97%
FCF growth 1Y9.8%
FCF growth 3Y-3.37%
FCF growth 5Y7.39%
OCF growth 1Y-4.06%
OCF growth 3Y-3.56%
OCF growth 5Y4.69%