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 belongs to the best of the industry regarding profitability, 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.
PH had a positive operating cash flow in the past year.
Each year in the past 5 years PH has been profitable.
Each year in the past 5 years PH had a positive operating cash flow.
1.2 Ratios
PH has a Return On Assets of 11.73%. This is amongst the best in the industry. PH outperforms 86.72% of its industry peers.
PH has a Return On Equity of 25.34%. This is amongst the best in the industry. PH outperforms 91.41% of its industry peers.
With an excellent Return On Invested Capital value of 13.75%, PH belongs to the best of the industry, outperforming 83.59% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for PH is in line with the industry average of 10.31%.
The last Return On Invested Capital (13.75%) for PH is above the 3 year average (11.38%), which is a sign of increasing profitability.
| 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
PH has a Profit Margin of 17.14%. This is amongst the best in the industry. PH outperforms 93.75% of its industry peers.
PH's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 20.63%, PH belongs to the best of the industry, outperforming 89.84% of the companies in the same industry.
In the last couple of years the Operating Margin of PH has grown nicely.
PH has a better Gross Margin (36.64%) than 67.97% 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
PH has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
PH has about the same amout of shares outstanding than it did 1 year ago.
PH has more shares outstanding than it did 5 years ago.
The debt/assets ratio for PH has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 5.49 indicates that PH is not in any danger for bankruptcy at the moment.
The Altman-Z score of PH (5.49) is better than 78.13% 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 65.63% of its industry peers.
PH has a Debt/Equity ratio of 0.55. This is a neutral value indicating PH is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.55, PH is in line with its industry, outperforming 42.19% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 3 | ||
| Altman-Z | 5.49 |
ROIC/WACC1.4
WACC9.81%
2.3 Liquidity
PH has a Current Ratio of 1.21. This is a normal value and indicates that PH is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.21, PH is doing worse than 85.16% of the companies in the same industry.
PH has a Quick Ratio of 1.21. This is a bad value and indicates that PH is not financially healthy enough and could expect problems in meeting its short term obligations.
PH has a Quick ratio of 0.70. This is amonst the worse of the industry: PH underperforms 83.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.21 | ||
| Quick Ratio | 0.7 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.04% over the past year.
The Earnings Per Share has been growing by 16.50% on average over the past years. This is quite good.
PH shows a decrease in Revenue. In the last year, the revenue decreased by -0.23%.
PH shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.83% yearly.
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 7.49% on average per year.
Based on estimates for the next years, PH will show a small growth in Revenue. The Revenue will grow by 4.01% on average per year.
EPS Next Y8.25%
EPS Next 2Y8.18%
EPS Next 3Y8.39%
EPS Next 5Y7.49%
Revenue Next Year-0.52%
Revenue Next 2Y1.82%
Revenue Next 3Y3.13%
Revenue Next 5Y4.01%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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
PH is valuated rather expensively with a Price/Earnings ratio of 24.77.
Compared to the rest of the industry, the Price/Earnings ratio of PH is on the same level as its industry peers.
PH's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.82.
With a Price/Forward Earnings ratio of 22.04, PH is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PH is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of PH to the average of the S&P500 Index (21.76), we can say PH is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.77 | ||
| Fwd PE | 22.04 |
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 62.50% of the companies in the same industry.
PH's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.99 | ||
| EV/EBITDA | 18.75 |
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 PH 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 1.07%, PH has a reasonable but not impressive dividend return.
PH's Dividend Yield is a higher than the industry average which is at 1.83.
Compared to an average S&P500 Dividend Yield of 2.36, PH's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.07% |
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
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 2Y8.18%
EPS Next 3Y8.39%
654.96
-2.39 (-0.36%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners88.35%
Inst Owner Change2.87%
Ins Owners0.14%
Ins Owner Change2.63%
Market Cap84.33B
Analysts81.29
Price Target718.96 (9.77%)
Short Float %0.96%
Short Ratio1.25
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.07% |
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)-6.65%
PT rev (3m)-4.38%
EPS NQ rev (1m)-2.65%
EPS NQ rev (3m)-2.87%
EPS NY rev (1m)-0.16%
EPS NY rev (3m)-0.19%
Revenue NQ rev (1m)-2.2%
Revenue NQ rev (3m)-2.4%
Revenue NY rev (1m)-0.7%
Revenue NY rev (3m)-0.99%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.77 | ||
| Fwd PE | 22.04 | ||
| P/S | 4.26 | ||
| P/FCF | 26.99 | ||
| P/OCF | 23.78 | ||
| P/B | 6.3 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.75 |
EPS(TTM)26.44
EY4.04%
EPS(NY)29.71
Fwd EY4.54%
FCF(TTM)24.27
FCFY3.71%
OCF(TTM)27.54
OCFY4.2%
SpS153.73
BVpS104
TBVpS-34.49
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 | 5.49 |
F-Score8
WACC9.81%
ROIC/WACC1.4
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 5Y7.49%
Revenue 1Y (TTM)-0.23%
Revenue growth 3Y11.58%
Revenue growth 5Y6.83%
Sales Q2Q%-2.25%
Revenue Next Year-0.52%
Revenue Next 2Y1.82%
Revenue Next 3Y3.13%
Revenue Next 5Y4.01%
EBIT growth 1Y4.72%
EBIT growth 3Y17.83%
EBIT growth 5Y13.85%
EBIT Next Year23.54%
EBIT Next 3Y12.84%
EBIT Next 5Y8.69%
FCF growth 1Y33.3%
FCF growth 3Y8.06%
FCF growth 5Y14.22%
OCF growth 1Y31.91%
OCF growth 3Y9.54%
OCF growth 5Y14.36%