AVERY DENNISON CORP (AVY)
US0536111091 - Common Stock
AVY gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 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 has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
AVY had positive earnings in the past year.
In the past year AVY had a positive cash flow from operations.
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's Return On Assets of 5.94% is fine compared to the rest of the industry. AVY outperforms 65.22% of its industry peers.
With an excellent Return On Equity value of 23.40%, AVY belongs to the best of the industry, outperforming 82.61% of the companies in the same industry.
With an excellent Return On Invested Capital value of 12.35%, AVY belongs to the best of the industry, outperforming 91.30% of the companies in the same industry.
AVY had an Average Return On Invested Capital over the past 3 years of 15.08%. This is significantly above the industry average of 8.35%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.94% | ||
| ROE | 23.4% | ||
| ROIC | 12.35% |
ROA(3y)9.31%
ROA(5y)8.5%
ROE(3y)37.72%
ROE(5y)37.46%
ROIC(3y)15.08%
ROIC(5y)16.18%
1.3 Margins
AVY's Profit Margin of 5.83% is in line compared to the rest of the industry. AVY outperforms 56.52% of its industry peers.
In the last couple of years the Profit Margin of AVY has grown nicely.
The Operating Margin of AVY (10.66%) is better than 65.22% of its industry peers.
AVY's Operating Margin has been stable in the last couple of years.
With a decent Gross Margin value of 26.35%, AVY is doing good in the industry, outperforming 78.26% of the companies in the same industry.
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 | 10.66% | ||
| PM (TTM) | 5.83% | ||
| GM | 26.35% |
OM growth 3Y0.5%
OM growth 5Y1.42%
PM growth 3Y24.94%
PM growth 5Y14.47%
GM growth 3Y-0.42%
GM growth 5Y-0.59%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), AVY is creating value.
Compared to 1 year ago, AVY has less shares outstanding
The number of shares outstanding for AVY has been reduced compared to 5 years ago.
Compared to 1 year ago, AVY has about the same debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.73 indicates that AVY is not in any danger for bankruptcy at the moment.
The Altman-Z score of AVY (3.73) is better than 91.30% of its industry peers.
The Debt to FCF ratio of AVY is 5.81, which is a neutral value as it means it would take AVY, 5.81 years of fcf income to pay off all of its debts.
AVY has a better Debt to FCF ratio (5.81) than 78.26% of its industry peers.
A Debt/Equity ratio of 1.26 is on the high side and indicates that AVY has dependencies on debt financing.
AVY has a Debt to Equity ratio (1.26) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.26 | ||
| Debt/FCF | 5.81 | ||
| Altman-Z | 3.73 |
ROIC/WACC1.59
WACC7.76%
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.
The Current ratio of AVY (1.03) is worse than 86.96% of its industry peers.
A Quick Ratio of 0.68 indicates that AVY may have some problems paying its short term obligations.
The Quick ratio of AVY (0.68) is worse than 82.61% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.03 | ||
| Quick Ratio | 0.68 |
3. Growth
3.1 Past
The earnings per share for AVY have decreased strongly by -23.47% in the last year.
Measured over the past years, AVY shows a quite strong growth in Earnings Per Share. The EPS has been growing by 12.80% on average per year.
Looking at the last year, AVY shows a decrease in Revenue. The Revenue has decreased by -9.97% in the last year.
AVY shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.45% yearly.
EPS 1Y (TTM)-23.47%
EPS 3Y11.56%
EPS 5Y12.8%
EPS growth Q2Q-14.63%
Revenue 1Y (TTM)-9.97%
Revenue growth 3Y8.53%
Revenue growth 5Y6.45%
Revenue growth Q2Q-9.44%
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 6.44% on average per year.
AVY is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.25% yearly.
EPS Next Y-11.31%
EPS Next 2Y4.71%
EPS Next 3Y7.47%
EPS Next 5Y6.44%
Revenue Next Year-7.05%
Revenue Next 2Y-0.3%
Revenue Next 3Y1.54%
Revenue Next 5Y2.25%
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 decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 26.55, AVY can be considered very expensive at the moment.
Based on the Price/Earnings ratio, AVY is valued more expensive than 82.61% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 24.69. AVY is around the same levels.
Based on the Price/Forward Earnings ratio of 19.51, the valuation of AVY can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AVY indicates a slightly more expensive valuation: AVY is more expensive than 73.91% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 19.79, AVY is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.55 | ||
| Fwd PE | 19.51 |
4.2 Price Multiples
91.30% of the companies in the same industry are cheaper than AVY, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, AVY is valued a bit more expensive than the industry average as 60.87% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.64 | ||
| EV/EBITDA | 15.94 |
4.3 Compensation for Growth
The decent profitability rating of AVY may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.07
EPS Next 2Y4.71%
EPS Next 3Y7.47%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.71%, AVY has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.09, AVY is paying slightly less dividend.
AVY's Dividend Yield is slightly below the S&P500 average, which is at 2.63.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.71% |
5.2 History
The dividend of AVY is nicely growing with an annual growth rate of 18.43%!
AVY has paid a dividend for at least 10 years, which is a reliable track record.
AVY has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)18.43%
Div Incr Years12
Div Non Decr Years12
5.3 Sustainability
52.22% of the earnings are spent on dividend by AVY. This is a bit on the high side, but may be sustainable.
AVY's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP52.22%
EPS Next 2Y4.71%
EPS Next 3Y7.47%
AVERY DENNISON CORP
NYSE:AVY (12/1/2023, 11:36:06 AM)
195.705
+1.21 (+0.62%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryContainers & Packaging
Earnings (Last)10-25 2023-10-25/bmo
Earnings (Next)01-31 2024-01-31/amc
Inst Owners90.47%
Inst Owner Change0.67%
Ins Owners0.89%
Ins Owner Change-1.36%
Market Cap15.76B
Analysts85
Price Target203.64 (4.05%)
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.71% |
Dividend Growth(5Y)18.43%
DP52.22%
Div Incr Years12
Div Non Decr Years12
Ex-Date12-05 2023-12-05 (0.81)
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.65%
Min EPS beat(2)-4.33%
Max EPS beat(2)-0.96%
EPS beat(4)1
Avg EPS beat(4)-5.81%
Min EPS beat(4)-19.29%
Max EPS beat(4)1.35%
Revenue beat(2)0
Avg Revenue beat(2)-4.08%
Min Revenue beat(2)-4.27%
Max Revenue beat(2)-3.89%
Revenue beat(4)0
Avg Revenue beat(4)-5.45%
Min Revenue beat(4)-7.54%
Max Revenue beat(4)-3.89%
PT rev (1m)-3.45%
PT rev (3m)0.58%
EPS NQ rev (1m)-6.28%
EPS NQ rev (3m)-7.14%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.84%
Revenue NQ rev (1m)-4.33%
Revenue NQ rev (3m)-5.15%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.52%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.55 | ||
| Fwd PE | 19.51 | ||
| P/S | 1.9 | ||
| P/FCF | 27.64 | ||
| P/OCF | 18.33 | ||
| P/B | 7.64 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.94 |
EPS(TTM)7.37
EY3.77%
EPS(NY)10.03
Fwd EY5.13%
FCF(TTM)7.08
FCFY3.62%
OCF(TTM)10.68
OCFY5.46%
SpS102.82
BVpS25.63
TBVpS-9.6
PEG (NY)N/A
PEG (5Y)2.07
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.94% | ||
| ROE | 23.4% | ||
| ROCE | 16.38% | ||
| ROIC | 12.35% | ||
| ROICexc | 12.85% | ||
| ROICexgc | 28.4% | ||
| OM | 10.66% | ||
| PM (TTM) | 5.83% | ||
| GM | 26.35% | ||
| FCFM | 6.89% |
ROA(3y)9.31%
ROA(5y)8.5%
ROE(3y)37.72%
ROE(5y)37.46%
ROIC(3y)15.08%
ROIC(5y)16.18%
ROICexc(3y)15.72%
ROICexc(5y)17.12%
ROICexgc(3y)31.37%
ROICexgc(5y)31.43%
ROCE(3y)20.4%
ROCE(5y)22.14%
ROICexcg growth 3Y4.12%
ROICexcg growth 5Y5.32%
ROICexc growth 3Y-6.89%
ROICexc growth 5Y-1.2%
OM growth 3Y0.5%
OM growth 5Y1.42%
PM growth 3Y24.94%
PM growth 5Y14.47%
GM growth 3Y-0.42%
GM growth 5Y-0.59%
F-Score5
Asset Turnover1.02
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.26 | ||
| Debt/FCF | 5.81 | ||
| Debt/EBITDA | 2.21 | ||
| Cap/Depr | 98.24% | ||
| Cap/Sales | 3.5% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 73.02% | ||
| Profit Quality | 118.1% | ||
| Current Ratio | 1.03 | ||
| Quick Ratio | 0.68 | ||
| Altman-Z | 3.73 |
F-Score5
WACC7.76%
ROIC/WACC1.59
Cap/Depr(3y)106.88%
Cap/Depr(5y)121.22%
Cap/Sales(3y)3.22%
Cap/Sales(5y)3.38%
Profit Quality(3y)96%
Profit Quality(5y)98.45%
Growth
EPS 1Y (TTM)-23.47%
EPS 3Y11.56%
EPS 5Y12.8%
EPS growth Q2Q-14.63%
EPS Next Y-11.31%
EPS Next 2Y4.71%
EPS Next 3Y7.47%
EPS Next 5Y6.44%
Revenue 1Y (TTM)-9.97%
Revenue growth 3Y8.53%
Revenue growth 5Y6.45%
Revenue growth Q2Q-9.44%
Revenue Next Year-7.05%
Revenue Next 2Y-0.3%
Revenue Next 3Y1.54%
Revenue Next 5Y2.25%
EBIT growth 1Y-22.45%
EBIT growth 3Y9.07%
EBIT growth 5Y7.96%
EBIT Next Year12.34%
EBIT Next 3Y11.75%
EBIT Next 5Y7.9%
FCF growth 1Y-30.36%
FCF growth 3Y10.63%
FCF growth 5Y9.56%
OCF growth 1Y-19.81%
OCF growth 3Y8.78%
OCF growth 5Y8.28%