PARKER HANNIFIN CORP (PH) Stock Fundamental Analysis
NYSE:PH - New York Stock Exchange, Inc. - US7010941042 - Common Stock - Currency: USD
PH gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 127 industry peers in the Machinery industry. PH has an excellent profitability rating, but 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.
In the past 5 years PH has always been profitable.
In the past 5 years PH always reported a positive cash flow from operatings.
1.2 Ratios
PH's Return On Assets of 11.73% is amongst the best of the industry. PH outperforms 86.61% of its industry peers.
Looking at the Return On Equity, with a value of 25.34%, PH belongs to the top of the industry, outperforming 90.55% of the companies in the same industry.
The Return On Invested Capital of PH (13.75%) is better than 81.10% 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 10.78%.
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
With an excellent Profit Margin value of 17.14%, PH belongs to the best of the industry, outperforming 92.91% of the companies in the same industry.
In the last couple of years the Profit Margin of PH has grown nicely.
The Operating Margin of PH (20.63%) is better than 90.55% of its industry peers.
In the last couple of years the Operating Margin of PH has grown nicely.
Looking at the Gross Margin, with a value of 36.64%, PH is in the better half of the industry, outperforming 66.93% of the companies in the same industry.
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.
The number of shares outstanding for PH has been increased compared to 5 years ago.
Compared to 1 year ago, PH has an improved debt to assets ratio.
2.2 Solvency
PH has an Altman-Z score of 5.79. This indicates that PH is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.79, PH belongs to the top of the industry, outperforming 80.31% 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.
With a decent Debt to FCF ratio value of 3.00, PH is doing good in the industry, outperforming 64.57% of the companies in the same industry.
A Debt/Equity ratio of 0.55 indicates that PH is somewhat dependend on debt financing.
PH's Debt to Equity ratio of 0.55 is in line compared to the rest of the industry. PH outperforms 40.94% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 3 | ||
| Altman-Z | 5.79 |
ROIC/WACC1.42
WACC9.68%
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.
With a Current ratio value of 1.21, PH is not doing good in the industry: 85.04% of the companies in the same industry are doing better.
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 86.61% 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%.
The Earnings Per Share has been growing by 16.50% on average over the past years. This is quite good.
The Revenue has decreased by -0.23% in the past year.
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 6.84% on average per year.
The Revenue is expected to grow by 3.81% on average over the next years.
EPS Next Y8.59%
EPS Next 2Y8.25%
EPS Next 3Y8.28%
EPS Next 5Y6.84%
Revenue Next Year-0.48%
Revenue Next 2Y1.84%
Revenue Next 3Y3.07%
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.
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
A Price/Earnings ratio of 27.33 indicates a quite expensive valuation of PH.
PH's Price/Earnings ratio is in line with the industry average.
PH is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.50, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 24.29, the valuation of PH can be described as rather expensive.
PH's Price/Forward Earnings ratio is in line with the industry average.
PH's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 36.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.33 | ||
| Fwd PE | 24.29 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, PH is valued a bit more expensive than the industry average as 63.78% of the companies are valued more cheaply.
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 | 29.55 | ||
| EV/EBITDA | 20.31 |
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)3.18
PEG (5Y)1.66
EPS Next 2Y8.25%
EPS Next 3Y8.28%
5. Dividend
5.1 Amount
PH has a Yearly Dividend Yield of 1.01%.
Compared to an average industry Dividend Yield of 1.83, PH pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.35, PH's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.01% |
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 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 2Y8.25%
EPS Next 3Y8.28%
722.58
-0.68 (-0.09%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners90.24%
Inst Owner Change0.08%
Ins Owners0.17%
Ins Owner Change2.63%
Market Cap92.33B
Analysts80.63
Price Target727.82 (0.73%)
Short Float %1.58%
Short Ratio3.14
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.01% |
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)-0.11%
PT rev (3m)-5.5%
EPS NQ rev (1m)0.1%
EPS NQ rev (3m)-2.59%
EPS NY rev (1m)0.31%
EPS NY rev (3m)0.08%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)-2.16%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)-0.66%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.33 | ||
| Fwd PE | 24.29 | ||
| P/S | 4.66 | ||
| P/FCF | 29.55 | ||
| P/OCF | 26.04 | ||
| P/B | 6.9 | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.31 |
EPS(TTM)26.44
EY3.66%
EPS(NY)29.75
Fwd EY4.12%
FCF(TTM)24.46
FCFY3.38%
OCF(TTM)27.75
OCFY3.84%
SpS154.9
BVpS104.8
TBVpS-34.76
PEG (NY)3.18
PEG (5Y)1.66
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 | 5.79 |
F-Score8
WACC9.68%
ROIC/WACC1.42
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 Y8.59%
EPS Next 2Y8.25%
EPS Next 3Y8.28%
EPS Next 5Y6.84%
Revenue 1Y (TTM)-0.23%
Revenue growth 3Y11.58%
Revenue growth 5Y6.83%
Sales Q2Q%-2.25%
Revenue Next Year-0.48%
Revenue Next 2Y1.84%
Revenue Next 3Y3.07%
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%