PARKER HANNIFIN CORP (PH) Stock Fundamental Analysis
NYSE:PH - New York Stock Exchange, Inc. - US7010941042 - Common Stock - Currency: USD
Overall PH gets a fundamental rating of 5 out of 10. We evaluated PH against 128 industry peers in the Machinery industry. While PH has a great profitability rating, there are some minor concerns on its financial health. PH is valued expensive and it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year PH was profitable.
In the past year PH had a positive cash flow from operations.
PH had positive earnings in 4 of the past 5 years.
PH had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
The Return On Assets of PH (11.73%) is better than 86.72% of its industry peers.
The Return On Equity of PH (25.34%) is better than 90.63% of its industry peers.
PH has a Return On Invested Capital of 13.75%. This is amongst the best in the industry. PH outperforms 80.47% of its industry peers.
PH had an Average Return On Invested Capital over the past 3 years of 11.38%. This is in line with the industry average of 10.71%.
The 3 year average ROIC (11.38%) for PH is below the current ROIC(13.75%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.73% | ||
| ROE | 25.34% | ||
| ROIC | 13.75% |
ROA(3y)7.24%
ROA(5y)7.28%
ROE(3y)19.53%
ROE(5y)19.82%
ROIC(3y)11.38%
ROIC(5y)10.72%
1.3 Margins
The Profit Margin of PH (17.14%) is better than 92.19% of its industry peers.
PH's Profit Margin has improved in the last couple of years.
PH has a better Operating Margin (20.63%) than 91.41% of its industry peers.
PH's Operating Margin has improved in the last couple of years.
PH's Gross Margin of 36.64% is fine compared to the rest of the industry. PH outperforms 67.97% of its industry peers.
In the last couple of years the Gross Margin of PH has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.63% | ||
| PM (TTM) | 17.14% | ||
| GM | 36.64% |
OM growth 3Y5.61%
OM growth 5Y6.57%
PM growth 3Y5.45%
PM growth 5Y6.21%
GM growth 3Y2.6%
GM growth 5Y7.21%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), PH is creating some value.
There is no outstanding debt for PH. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
An Altman-Z score of 5.80 indicates that PH is not in any danger for bankruptcy at the moment.
PH's Altman-Z score of 5.80 is amongst the best of the industry. PH outperforms 81.25% of its industry peers.
The Debt to FCF ratio of PH is 3.00, which is a good value as it means it would take PH, 3.00 years of fcf income to pay off all of its debts.
PH has a better Debt to FCF ratio (3.00) than 67.19% of its industry peers.
A Debt/Equity ratio of 0.55 indicates that PH is somewhat dependend on debt financing.
PH has a Debt to Equity ratio (0.55) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 3 | ||
| Altman-Z | 5.8 |
ROIC/WACC1.46
WACC9.41%
2.3 Liquidity
A Current Ratio of 1.21 indicates that PH should not have too much problems paying its short term obligations.
PH's Current ratio of 1.21 is on the low side compared to the rest of the industry. PH is outperformed by 85.16% of its industry peers.
A Quick Ratio of 0.70 indicates that PH may have some problems paying its short term obligations.
PH has a worse Quick ratio (0.70) than 85.94% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.21 | ||
| Quick Ratio | 0.7 |
3. Growth
3.1 Past
PH shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.76%.
The Earnings Per Share has been growing by 20.50% on average over the past years. This is a very strong growth
EPS 1Y (TTM)7.76%
EPS 3Y13.5%
EPS 5Y20.5%
EPS Q2Q%13.59%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%1.08%
3.2 Future
PH is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.61% yearly.
Based on estimates for the next years, PH will show a small growth in Revenue. The Revenue will grow by 4.91% on average per year.
EPS Next Y8.74%
EPS Next 2Y8.54%
EPS Next 3Y7.93%
EPS Next 5Y6.61%
Revenue Next Year4.52%
Revenue Next 2Y5.03%
Revenue Next 3Y4.56%
Revenue Next 5Y4.91%
3.3 Evolution
The EPS 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
Based on the Price/Earnings ratio of 26.60, the valuation of PH can be described as expensive.
PH's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of PH to the average of the S&P500 Index (26.48), we can say PH is valued inline with the index average.
With a Price/Forward Earnings ratio of 24.46, PH is valued on the expensive side.
The rest of the industry has a similar Price/Forward Earnings ratio as PH.
The average S&P500 Price/Forward Earnings ratio is at 34.04. PH is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.6 | ||
| Fwd PE | 24.46 |
4.2 Price Multiples
PH's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. PH is more expensive than 64.84% of the companies in the same industry.
PH's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.76 | ||
| EV/EBITDA | 20.36 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PH has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)3.04
PEG (5Y)1.3
EPS Next 2Y8.54%
EPS Next 3Y7.93%
5. Dividend
5.1 Amount
With a yearly dividend of 0.99%, PH is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.91, PH pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.39, PH's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.99% |
5.2 History
The dividend of PH is nicely growing with an annual growth rate of 13.91%!
PH has paid a dividend for at least 10 years, which is a reliable track record.
PH has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)13.91%
Div Incr Years8
Div Non Decr Years34
5.3 Sustainability
24.78% of the earnings are spent on dividend by PH. This is a low number and sustainable payout ratio.
The dividend of PH is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP24.78%
EPS Next 2Y8.54%
EPS Next 3Y7.93%
727.74
+2.38 (+0.33%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners90.31%
Inst Owner Change-1.62%
Ins Owners0.16%
Ins Owner Change2.66%
Market Cap92.99B
Analysts80.63
Price Target758.25 (4.19%)
Short Float %1.48%
Short Ratio3.31
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.99% |
Yearly Dividend6.09
Dividend Growth(5Y)13.91%
DP24.78%
Div Incr Years8
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.02%
Min EPS beat(2)0.28%
Max EPS beat(2)1.76%
EPS beat(4)3
Avg EPS beat(4)1.44%
Min EPS beat(4)-1.98%
Max EPS beat(4)5.69%
EPS beat(8)7
Avg EPS beat(8)4.81%
EPS beat(12)11
Avg EPS beat(12)6.22%
EPS beat(16)14
Avg EPS beat(16)6.05%
Revenue beat(2)0
Avg Revenue beat(2)-3.78%
Min Revenue beat(2)-4.13%
Max Revenue beat(2)-3.42%
Revenue beat(4)0
Avg Revenue beat(4)-2.82%
Min Revenue beat(4)-4.13%
Max Revenue beat(4)-0.9%
Revenue beat(8)0
Avg Revenue beat(8)-2.69%
Revenue beat(12)4
Avg Revenue beat(12)-1.01%
Revenue beat(16)5
Avg Revenue beat(16)-1.03%
PT rev (1m)3.5%
PT rev (3m)5.21%
EPS NQ rev (1m)0.16%
EPS NQ rev (3m)-2.51%
EPS NY rev (1m)0.27%
EPS NY rev (3m)0.15%
Revenue NQ rev (1m)0.23%
Revenue NQ rev (3m)-2.03%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)-0.61%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.6 | ||
| Fwd PE | 24.46 | ||
| P/S | 4.7 | ||
| P/FCF | 29.76 | ||
| P/OCF | 26.22 | ||
| P/B | 6.94 | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.36 |
EPS(TTM)27.36
EY3.76%
EPS(NY)29.75
Fwd EY4.09%
FCF(TTM)24.46
FCFY3.36%
OCF(TTM)27.75
OCFY3.81%
SpS154.9
BVpS104.8
TBVpS-34.76
PEG (NY)3.04
PEG (5Y)1.3
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.73% | ||
| ROE | 25.34% | ||
| ROCE | 17.53% | ||
| ROIC | 13.75% | ||
| ROICexc | 13.99% | ||
| ROICexgc | 63.29% | ||
| OM | 20.63% | ||
| PM (TTM) | 17.14% | ||
| GM | 36.64% | ||
| FCFM | 15.79% |
ROA(3y)7.24%
ROA(5y)7.28%
ROE(3y)19.53%
ROE(5y)19.82%
ROIC(3y)11.38%
ROIC(5y)10.72%
ROICexc(3y)11.63%
ROICexc(5y)11.05%
ROICexgc(3y)46.12%
ROICexgc(5y)42.17%
ROCE(3y)15.73%
ROCE(5y)14.4%
ROICexcg growth 3Y14.15%
ROICexcg growth 5Y6.29%
ROICexc growth 3Y4.37%
ROICexc growth 5Y-2.26%
OM growth 3Y5.61%
OM growth 5Y6.57%
PM growth 3Y5.45%
PM growth 5Y6.21%
GM growth 3Y2.6%
GM growth 5Y7.21%
F-Score8
Asset Turnover0.68
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 3 | ||
| Debt/EBITDA | 1.49 | ||
| Cap/Depr | 46.34% | ||
| Cap/Sales | 2.13% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 71.03% | ||
| Profit Quality | 92.11% | ||
| Current Ratio | 1.21 | ||
| Quick Ratio | 0.7 | ||
| Altman-Z | 5.8 |
F-Score8
WACC9.41%
ROIC/WACC1.46
Cap/Depr(3y)43.31%
Cap/Depr(5y)41.69%
Cap/Sales(3y)1.82%
Cap/Sales(5y)1.72%
Profit Quality(3y)132.61%
Profit Quality(5y)137.14%
High Growth Momentum
Growth
EPS 1Y (TTM)7.76%
EPS 3Y13.5%
EPS 5Y20.5%
EPS Q2Q%13.59%
EPS Next Y8.74%
EPS Next 2Y8.54%
EPS Next 3Y7.93%
EPS Next 5Y6.61%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%1.08%
Revenue Next Year4.52%
Revenue Next 2Y5.03%
Revenue Next 3Y4.56%
Revenue Next 5Y4.91%
EBIT growth 1Y4.72%
EBIT growth 3Y17.83%
EBIT growth 5Y13.85%
EBIT Next Year23.45%
EBIT Next 3Y12.34%
EBIT Next 5Y8.11%
FCF growth 1Y33.3%
FCF growth 3Y8.06%
FCF growth 5Y14.22%
OCF growth 1Y31.91%
OCF growth 3Y9.54%
OCF growth 5Y14.36%