PARKER HANNIFIN CORP (PH) Stock Fundamental Analysis
NYSE:PH - New York Stock Exchange, Inc. - US7010941042 - Common Stock - Currency: USD
Taking everything into account, PH scores 5 out of 10 in our fundamental rating. PH was compared to 128 industry peers in the Machinery industry. While PH belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. PH has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
PH had positive earnings in the past year.
PH had a positive operating cash flow in the past year.
Each year in the past 5 years PH has been profitable.
PH had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 11.73%, PH belongs to the best of the industry, outperforming 86.72% of the companies in the same industry.
PH has a Return On Equity of 25.34%. This is amongst the best in the industry. PH outperforms 90.63% of its industry peers.
The Return On Invested Capital of PH (13.75%) is better than 82.03% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PH is in line with the industry average of 10.69%.
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 92.97% of its industry peers.
In the last couple of years the Profit Margin of PH has grown nicely.
PH has a better Operating Margin (20.63%) than 90.63% of its industry peers.
In the last couple of years the Operating Margin of PH has grown nicely.
The Gross Margin of PH (36.64%) is better than 67.19% of its industry peers.
PH's Gross Margin has improved in the last couple of years.
| 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so PH is still creating some value.
PH has about the same amout of shares outstanding than it did 1 year ago.
Compared to 5 years ago, PH has more shares outstanding
The debt/assets ratio for PH has been reduced compared to a year ago.
2.2 Solvency
PH has an Altman-Z score of 5.51. This indicates that PH is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 5.51, PH is doing good in the industry, outperforming 78.91% of the companies in the same industry.
PH has a debt to FCF ratio of 3.00. This is a good value and a sign of high solvency as PH would need 3.00 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.00, PH is in the better half of the industry, outperforming 64.84% of the companies in the same industry.
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 comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 3 | ||
| Altman-Z | 5.51 |
ROIC/WACC1.39
WACC9.86%
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 83.59% of its industry peers.
A Quick Ratio of 0.70 indicates that PH may have some problems paying its short term obligations.
PH's Quick ratio of 0.70 is on the low side compared to the rest of the industry. PH is outperformed by 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 7.04%.
PH shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 16.50% yearly.
Looking at the last year, PH shows a decrease in Revenue. The Revenue has decreased by -0.23% in the last year.
The Revenue has been growing slightly by 6.83% on average over the past years.
EPS 1Y (TTM)7.04%
EPS 3Y19.18%
EPS 5Y16.5%
EPS Q2Q%6.61%
Revenue 1Y (TTM)-0.23%
Revenue growth 3Y11.58%
Revenue growth 5Y6.83%
Sales Q2Q%-2.25%
3.2 Future
Based on estimates for the next years, PH will show a small growth in Earnings Per Share. The EPS will grow by 6.84% on average per year.
PH is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.81% yearly.
EPS Next Y8.25%
EPS Next 2Y8.18%
EPS Next 3Y8.39%
EPS Next 5Y6.84%
Revenue Next Year-0.51%
Revenue Next 2Y1.84%
Revenue Next 3Y3.15%
Revenue Next 5Y3.81%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 24.74, the valuation of PH can be described as rather expensive.
The rest of the industry has a similar Price/Earnings ratio as PH.
When comparing the Price/Earnings ratio of PH to the average of the S&P500 Index (26.31), we can say PH is valued inline with the index average.
The Price/Forward Earnings ratio is 22.01, which indicates a rather expensive current valuation of PH.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PH is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.13, PH is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.74 | ||
| Fwd PE | 22.01 |
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 63.28% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PH is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.74 | ||
| EV/EBITDA | 18.86 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates PH does not grow enough to justify the current Price/Earnings ratio.
PH has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)3
PEG (5Y)1.5
EPS Next 2Y8.18%
EPS Next 3Y8.39%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.08%, PH has a reasonable but not impressive dividend return.
PH's Dividend Yield is a higher than the industry average which is at 1.91.
Compared to an average S&P500 Dividend Yield of 2.40, PH's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.08% |
5.2 History
On average, the dividend of PH grows each year by 13.91%, which is quite nice.
PH has paid a dividend for at least 10 years, which is a reliable track record.
PH has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)13.91%
Div Incr Years8
Div Non Decr Years34
5.3 Sustainability
PH pays out 24.78% of its income as dividend. This is a 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 2Y8.18%
EPS Next 3Y8.39%
654.09
-12.77 (-1.91%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners90.24%
Inst Owner Change2.91%
Ins Owners0.17%
Ins Owner Change2.63%
Market Cap83.58B
Analysts81.29
Price Target728.58 (11.39%)
Short Float %1.18%
Short Ratio1.75
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.08% |
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)1.34%
PT rev (3m)-5.66%
EPS NQ rev (1m)-0.42%
EPS NQ rev (3m)-3.01%
EPS NY rev (1m)-0.16%
EPS NY rev (3m)-0.19%
Revenue NQ rev (1m)-0.38%
Revenue NQ rev (3m)-2.4%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)-0.77%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.74 | ||
| Fwd PE | 22.01 | ||
| P/S | 4.22 | ||
| P/FCF | 26.74 | ||
| P/OCF | 23.57 | ||
| P/B | 6.24 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.86 |
EPS(TTM)26.44
EY4.04%
EPS(NY)29.71
Fwd EY4.54%
FCF(TTM)24.46
FCFY3.74%
OCF(TTM)27.75
OCFY4.24%
SpS154.9
BVpS104.8
TBVpS-34.76
PEG (NY)3
PEG (5Y)1.5
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 | 5.51 |
F-Score8
WACC9.86%
ROIC/WACC1.39
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)7.04%
EPS 3Y19.18%
EPS 5Y16.5%
EPS Q2Q%6.61%
EPS Next Y8.25%
EPS Next 2Y8.18%
EPS Next 3Y8.39%
EPS Next 5Y6.84%
Revenue 1Y (TTM)-0.23%
Revenue growth 3Y11.58%
Revenue growth 5Y6.83%
Sales Q2Q%-2.25%
Revenue Next Year-0.51%
Revenue Next 2Y1.84%
Revenue Next 3Y3.15%
Revenue Next 5Y3.81%
EBIT growth 1Y4.72%
EBIT growth 3Y17.83%
EBIT growth 5Y13.85%
EBIT Next Year23.82%
EBIT Next 3Y12.42%
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%