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 scores excellent on profitability, but there are some minor concerns on its financial health. 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.
In the past year AVY had a positive cash flow from operations.
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 (8.36%) than 95.45% of its industry peers.
AVY's Return On Equity of 32.20% is amongst the best of the industry. AVY outperforms 95.45% of its industry peers.
The Return On Invested Capital of AVY (15.21%) is better than 100.00% of its industry peers.
AVY had an Average Return On Invested Capital over the past 3 years of 14.25%. This is significantly above the industry average of 7.43%.
The 3 year average ROIC (14.25%) for AVY is below the current ROIC(15.21%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.36% | ||
| ROE | 32.2% | ||
| ROIC | 15.21% |
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 90.91% of the companies in the same industry.
AVY's Profit Margin has improved in the last couple of years.
AVY has a Operating Margin of 12.83%. This is amongst the best in the industry. AVY outperforms 81.82% of its industry peers.
In the last couple of years the Operating Margin of AVY has grown nicely.
The Gross Margin of AVY (28.79%) is better than 81.82% of its industry peers.
AVY's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.83% | ||
| 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), AVY is creating value.
AVY has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, AVY has less shares outstanding
AVY has a better debt/assets ratio than last year.
2.2 Solvency
AVY has an Altman-Z score of 3.77. This indicates that AVY is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 3.77, AVY belongs to the best of the industry, outperforming 90.91% of the companies in the same industry.
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.
Looking at the Debt to FCF ratio, with a value of 6.02, AVY belongs to the top of the industry, outperforming 90.91% of the companies in the same industry.
A Debt/Equity ratio of 1.19 is on the high side and indicates that AVY has dependencies on debt financing.
With a decent Debt to Equity ratio value of 1.19, AVY is doing good in the industry, outperforming 63.64% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.19 | ||
| Debt/FCF | 6.02 | ||
| Altman-Z | 3.77 |
ROIC/WACC1.93
WACC7.89%
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 Current ratio of 1.03. This is in the lower half of the industry: AVY underperforms 77.27% of its industry peers.
A Quick Ratio of 0.68 indicates that AVY may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.68, AVY is doing worse than 77.27% of the companies in the same industry.
| 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.
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 3.57%.
The Revenue has been growing slightly by 4.37% on average over the past years.
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
AVY is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.69% yearly.
The Revenue is expected to grow by 4.41% on average over the next years.
EPS Next Y6.22%
EPS Next 2Y8.89%
EPS Next 3Y9.72%
EPS Next 5Y7.69%
Revenue Next Year1.01%
Revenue Next 2Y2.48%
Revenue Next 3Y3.19%
Revenue Next 5Y4.41%
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.
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
AVY is valuated rather expensively with a Price/Earnings ratio of 19.31.
AVY's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 24.95, AVY is valued a bit cheaper.
The Price/Forward Earnings ratio is 16.31, which indicates a correct valuation of AVY.
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 68.18% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 20.99. AVY is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.31 | ||
| Fwd PE | 16.31 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AVY indicates a slightly more expensive valuation: AVY is more expensive than 68.18% of the companies listed in the same industry.
AVY's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. AVY is cheaper than 63.64% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.76 | ||
| EV/EBITDA | 12.19 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of AVY may justify a higher PE ratio.
PEG (NY)3.1
PEG (5Y)2.61
EPS Next 2Y8.89%
EPS Next 3Y9.72%
5. Dividend
5.1 Amount
AVY has a Yearly Dividend Yield of 2.17%. Purely for dividend investing, there may be better candidates out there.
AVY's Dividend Yield is comparable with the industry average which is at 3.32.
Compared to an average S&P500 Dividend Yield of 2.41, AVY has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.17% |
5.2 History
The dividend of AVY is nicely growing with an annual growth rate of 14.44%!
AVY has paid a dividend for at least 10 years, which is a reliable track record.
AVY has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)14.44%
Div Incr Years14
Div Non Decr Years14
5.3 Sustainability
AVY pays out 40.30% of its income as dividend. 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.
DP40.3%
EPS Next 2Y8.89%
EPS Next 3Y9.72%
182.13
-1.21 (-0.66%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryContainers & Packaging
Earnings (Last)
Earnings (Next)
Inst Owners94.74%
Inst Owner Change0.67%
Ins Owners0.55%
Ins Owner Change4.68%
Market Cap14.24B
Analysts75.79
Price Target198.36 (8.91%)
Short Float %3.06%
Short Ratio2.74
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.17% |
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)-7.82%
PT rev (3m)-13.9%
EPS NQ rev (1m)-2.91%
EPS NQ rev (3m)-5.74%
EPS NY rev (1m)-1.1%
EPS NY rev (3m)-5.15%
Revenue NQ rev (1m)-0.18%
Revenue NQ rev (3m)-0.96%
Revenue NY rev (1m)-0.78%
Revenue NY rev (3m)-1.62%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.31 | ||
| Fwd PE | 16.31 | ||
| P/S | 1.63 | ||
| P/FCF | 24.76 | ||
| P/OCF | 17.74 | ||
| P/B | 6.56 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.19 |
EPS(TTM)9.43
EY5.18%
EPS(NY)11.17
Fwd EY6.13%
FCF(TTM)7.35
FCFY4.04%
OCF(TTM)10.27
OCFY5.64%
SpS111.96
BVpS27.76
TBVpS-7.11
PEG (NY)3.1
PEG (5Y)2.61
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.36% | ||
| ROE | 32.2% | ||
| ROCE | 20.79% | ||
| ROIC | 15.21% | ||
| ROICexc | 15.78% | ||
| ROICexgc | 33.13% | ||
| OM | 12.83% | ||
| 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 | 1.8 | ||
| Cap/Depr | 72.79% | ||
| Cap/Sales | 2.6% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 55.91% | ||
| Profit Quality | 82.28% | ||
| Current Ratio | 1.03 | ||
| Quick Ratio | 0.68 | ||
| Altman-Z | 3.77 |
F-Score8
WACC7.89%
ROIC/WACC1.93
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 Year1.01%
Revenue Next 2Y2.48%
Revenue Next 3Y3.19%
Revenue Next 5Y4.41%
EBIT growth 1Y9.78%
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%