AVERY DENNISON CORP (AVY) Stock Fundamental Analysis
NYSE:AVY - New York Stock Exchange, Inc. - US0536111091 - Common Stock - Currency: USD
Overall AVY gets a fundamental rating of 6 out of 10. We evaluated AVY against 22 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 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.
In the past 5 years AVY has always been profitable.
In the past 5 years AVY always reported a positive cash flow from operatings.
1.2 Ratios
AVY has a Return On Assets of 8.36%. This is amongst the best in the industry. AVY outperforms 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.
AVY has a better Return On Invested Capital (15.21%) than 100.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for AVY is significantly above the industry average of 7.58%.
The last Return On Invested Capital (15.21%) for AVY is above the 3 year average (14.25%), which is a sign of increasing profitability.
| 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
AVY has a better Profit Margin (7.98%) than 90.91% of its industry peers.
AVY's Profit Margin has improved in the last couple of years.
AVY's Operating Margin of 12.83% is amongst the best of the industry. AVY outperforms 81.82% of its industry peers.
In the last couple of years the Operating Margin of AVY has grown nicely.
With an excellent Gross Margin value of 28.79%, AVY belongs to the best of the industry, outperforming 81.82% 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 | 12.83% | ||
| 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
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.
The number of shares outstanding for AVY has been reduced compared to 5 years ago.
AVY has a better debt/assets ratio than last year.
2.2 Solvency
AVY has an Altman-Z score of 3.75. This indicates that AVY is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of AVY (3.75) is better than 90.91% 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.
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.
AVY has a Debt/Equity ratio of 1.19. This is a high value indicating a heavy dependency on external financing.
AVY has a better Debt to Equity ratio (1.19) than 63.64% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.19 | ||
| Debt/FCF | 6.02 | ||
| Altman-Z | 3.75 |
ROIC/WACC1.93
WACC7.88%
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 77.27% of its industry peers.
AVY has a Quick Ratio of 1.03. This is a bad value and indicates that AVY is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.68, AVY is not doing good in the industry: 72.73% 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
AVY shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.72%.
The Earnings Per Share has been growing slightly by 7.41% on average over the past years.
Looking at the last year, AVY shows a small growth in Revenue. The Revenue has grown by 3.57% in the last year.
Measured over the past years, AVY shows a small growth in Revenue. The Revenue has been growing by 4.37% on average per year.
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 7.39% yearly.
AVY is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.79% yearly.
EPS Next Y3.4%
EPS Next 2Y7.31%
EPS Next 3Y8.65%
EPS Next 5Y7.39%
Revenue Next Year1.01%
Revenue Next 2Y2.48%
Revenue Next 3Y3.19%
Revenue Next 5Y3.79%
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.
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
Based on the Price/Earnings ratio of 18.81, the valuation of AVY can be described as rather expensive.
AVY's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of AVY to the average of the S&P500 Index (26.55), we can say AVY is valued slightly cheaper.
With a Price/Forward Earnings ratio of 16.35, AVY is valued correctly.
Based on the Price/Forward Earnings ratio, AVY is valued a bit more expensive than 63.64% of the companies in the same industry.
AVY's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.81 | ||
| Fwd PE | 16.35 |
4.2 Price Multiples
AVY's Enterprise Value to EBITDA is on the same level as the industry average.
AVY's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. AVY is cheaper than 68.18% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.11 | ||
| EV/EBITDA | 12.08 |
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)5.54
PEG (5Y)2.54
EPS Next 2Y7.31%
EPS Next 3Y8.65%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.12%, AVY has a reasonable but not impressive dividend return.
AVY's Dividend Yield is comparable with the industry average which is at 3.14.
Compared to an average S&P500 Dividend Yield of 2.39, AVY has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.12% |
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 2Y7.31%
EPS Next 3Y8.65%
177.35
-2.74 (-1.52%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryContainers & Packaging
Earnings (Last)
Earnings (Next)
Inst Owners94.74%
Inst Owner Change-0.47%
Ins Owners0.55%
Ins Owner Change5.23%
Market Cap13.87B
Analysts73.68
Price Target198.36 (11.85%)
Short Float %3.51%
Short Ratio3.27
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.12% |
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)-5.2%
PT rev (3m)-7.82%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-5.8%
EPS NY rev (1m)-2.66%
EPS NY rev (3m)-3.62%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.83%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.81 | ||
| Fwd PE | 16.35 | ||
| P/S | 1.58 | ||
| P/FCF | 24.11 | ||
| P/OCF | 17.27 | ||
| P/B | 6.39 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.08 |
EPS(TTM)9.43
EY5.32%
EPS(NY)10.85
Fwd EY6.12%
FCF(TTM)7.35
FCFY4.15%
OCF(TTM)10.27
OCFY5.79%
SpS111.96
BVpS27.76
TBVpS-7.11
PEG (NY)5.54
PEG (5Y)2.54
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 | 3.75 |
F-Score8
WACC7.88%
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 Y3.4%
EPS Next 2Y7.31%
EPS Next 3Y8.65%
EPS Next 5Y7.39%
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 5Y3.79%
EBIT growth 1Y9.78%
EBIT growth 3Y1.58%
EBIT growth 5Y6.16%
EBIT Next Year27.88%
EBIT Next 3Y13.24%
EBIT Next 5Y8.81%
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%