AVERY DENNISON CORP (AVY) Stock Fundamental Analysis
NYSE:AVY - New York Stock Exchange, Inc. - US0536111091 - Common Stock - Currency: USD
AVY gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 24 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 has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
AVY had positive earnings in the past year.
AVY had a positive operating cash flow in the past year.
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
Looking at the Return On Assets, with a value of 7.97%, AVY belongs to the top of the industry, outperforming 91.30% of the companies in the same industry.
AVY has a Return On Equity of 28.15%. This is amongst the best in the industry. AVY outperforms 91.30% of its industry peers.
AVY's Return On Invested Capital of 16.03% is amongst the best of the industry. AVY outperforms 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 7.70%.
The 3 year average ROIC (14.04%) for AVY is below the current ROIC(16.03%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.97% | ||
| ROE | 28.15% | ||
| ROIC | 16.03% |
ROA(3y)8.31%
ROA(5y)7.92%
ROE(3y)33.12%
ROE(5y)32.4%
ROIC(3y)14.04%
ROIC(5y)15.14%
1.3 Margins
The Profit Margin of AVY (7.76%) is better than 82.61% of its industry peers.
AVY's Profit Margin has declined in the last couple of years.
AVY has a Operating Margin of 12.72%. This is amongst the best in the industry. AVY outperforms 82.61% of its industry peers.
In the last couple of years the Operating Margin of AVY has grown nicely.
Looking at the Gross Margin, with a value of 29.00%, AVY is in the better half of the industry, outperforming 78.26% 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 | 12.72% | ||
| PM (TTM) | 7.76% | ||
| GM | 29% |
OM growth 3Y-2.35%
OM growth 5Y1.63%
PM growth 3Y-8.98%
PM growth 5Y-1.63%
GM growth 3Y-0.44%
GM growth 5Y0.35%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so AVY is creating value.
AVY has less shares outstanding than it did 1 year ago.
AVY has less shares outstanding than it did 5 years ago.
The debt/assets ratio for AVY is higher compared to a year ago.
2.2 Solvency
AVY has an Altman-Z score of 3.79. This indicates that AVY is financially healthy and has little risk of bankruptcy at the moment.
AVY has a Altman-Z score of 3.79. This is amongst the best in the industry. AVY outperforms 91.30% of its industry peers.
The Debt to FCF ratio of AVY is 4.93, which is a neutral value as it means it would take AVY, 4.93 years of fcf income to pay off all of its debts.
AVY's Debt to FCF ratio of 4.93 is amongst the best of the industry. AVY outperforms 91.30% of its industry peers.
AVY has a Debt/Equity ratio of 0.85. This is a neutral value indicating AVY is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.85, AVY is in the better half of the industry, outperforming 73.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.85 | ||
| Debt/FCF | 4.93 | ||
| Altman-Z | 3.79 |
ROIC/WACC2
WACC8.01%
2.3 Liquidity
AVY has a Current Ratio of 0.92. This is a bad value and indicates that AVY is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.92, AVY is doing worse than 91.30% of the companies in the same industry.
A Quick Ratio of 0.62 indicates that AVY may have some problems paying its short term obligations.
With a Quick ratio value of 0.62, AVY is not doing good in the industry: 91.30% of the companies in the same industry are doing better.
AVY does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.92 | ||
| Quick Ratio | 0.62 |
3. Growth
3.1 Past
AVY shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 30.94%, which is quite impressive.
Measured over the past 5 years, AVY shows a small growth in Earnings Per Share. The EPS has been growing by 6.53% on average per year.
Looking at the last year, AVY shows a small growth in Revenue. The Revenue has grown by 4.84% in the last year.
AVY shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.16% yearly.
EPS 1Y (TTM)30.94%
EPS 3Y5.42%
EPS 5Y6.53%
EPS Q2Q%10.95%
Revenue 1Y (TTM)4.84%
Revenue growth 3Y6.26%
Revenue growth 5Y3.16%
Sales Q2Q%4.06%
3.2 Future
AVY is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.70% yearly.
AVY is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.20% yearly.
EPS Next Y14.45%
EPS Next 2Y12.94%
EPS Next 3Y12.26%
EPS Next 5Y9.7%
Revenue Next Year5%
Revenue Next 2Y4.78%
Revenue Next 3Y4.82%
Revenue Next 5Y5.2%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 18.91, which indicates a rather expensive current valuation of AVY.
Based on the Price/Earnings ratio, AVY is valued a bit more expensive than the industry average as 69.57% of the companies are valued more cheaply.
The average S&P500 Price/Earnings ratio is at 28.51. AVY is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 17.17, which indicates a rather expensive current valuation of AVY.
Based on the Price/Forward Earnings ratio, AVY is valued a bit more expensive than 69.57% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of AVY to the average of the S&P500 Index (93.88), we can say AVY is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.91 | ||
| Fwd PE | 17.17 |
4.2 Price Multiples
69.57% of the companies in the same industry are cheaper than AVY, based on the Enterprise Value to EBITDA ratio.
The rest of the industry has a similar Price/Free Cash Flow ratio as AVY.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.86 | ||
| EV/EBITDA | 13.03 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
AVY has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as AVY's earnings are expected to grow with 12.26% in the coming years.
PEG (NY)1.31
PEG (5Y)2.89
EPS Next 2Y12.94%
EPS Next 3Y12.26%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.82%, AVY has a reasonable but not impressive dividend return.
AVY's Dividend Yield is comparable with the industry average which is at 3.06.
AVY's Dividend Yield is comparable with the S&P500 average which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.82% |
5.2 History
The dividend of AVY is nicely growing with an annual growth rate of 16.63%!
AVY has been paying a dividend for at least 10 years, so it has a reliable track record.
AVY has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)16.63%
Div Incr Years14
Div Non Decr Years14
5.3 Sustainability
40.40% 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.
DP40.4%
EPS Next 2Y12.94%
EPS Next 3Y12.26%
AVERY DENNISON CORP
NYSE:AVY (1/30/2025, 8:05:48 PM)
After market: 182.49 0 (0%)182.49
-10.42 (-5.4%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryContainers & Packaging
Earnings (Last)
Earnings (Next)
Inst Owners94.36%
Inst Owner Change-0.5%
Ins Owners0.71%
Ins Owner Change-0.46%
Market Cap14.66B
Analysts77.78
Price Target239.71 (31.36%)
Short Float %2.49%
Short Ratio3.62
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.82% |
Yearly Dividend3.18
Dividend Growth(5Y)16.63%
DP40.4%
Div Incr Years14
Div Non Decr Years14
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.71%
Min EPS beat(2)-0.77%
Max EPS beat(2)6.18%
EPS beat(4)3
Avg EPS beat(4)7.49%
Min EPS beat(4)-0.77%
Max EPS beat(4)19.29%
EPS beat(8)4
Avg EPS beat(8)0.84%
EPS beat(12)6
Avg EPS beat(12)2.08%
EPS beat(16)10
Avg EPS beat(16)3.86%
Revenue beat(2)1
Avg Revenue beat(2)-0.16%
Min Revenue beat(2)-1.74%
Max Revenue beat(2)1.42%
Revenue beat(4)1
Avg Revenue beat(4)-0.39%
Min Revenue beat(4)-1.74%
Max Revenue beat(4)1.42%
Revenue beat(8)1
Avg Revenue beat(8)-2.92%
Revenue beat(12)3
Avg Revenue beat(12)-1.71%
Revenue beat(16)7
Avg Revenue beat(16)0.11%
PT rev (1m)0%
PT rev (3m)-2.23%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.13%
EPS NY rev (1m)0%
EPS NY rev (3m)0.02%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.22%
Revenue NY rev (1m)-0.05%
Revenue NY rev (3m)-0.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.91 | ||
| Fwd PE | 17.17 | ||
| P/S | 1.69 | ||
| P/FCF | 22.86 | ||
| P/OCF | 16.3 | ||
| P/B | 6.13 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.03 |
EPS(TTM)9.65
EY5.29%
EPS(NY)10.63
Fwd EY5.82%
FCF(TTM)7.98
FCFY4.37%
OCF(TTM)11.19
OCFY6.13%
SpS108.03
BVpS29.79
TBVpS-5
PEG (NY)1.31
PEG (5Y)2.89
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.97% | ||
| ROE | 28.15% | ||
| ROCE | 21.64% | ||
| ROIC | 16.03% | ||
| ROICexc | 16.73% | ||
| ROICexgc | 39.07% | ||
| OM | 12.72% | ||
| PM (TTM) | 7.76% | ||
| GM | 29% | ||
| FCFM | 7.39% |
ROA(3y)8.31%
ROA(5y)7.92%
ROE(3y)33.12%
ROE(5y)32.4%
ROIC(3y)14.04%
ROIC(5y)15.14%
ROICexc(3y)14.53%
ROICexc(5y)15.92%
ROICexgc(3y)32.29%
ROICexgc(5y)31.12%
ROCE(3y)19.32%
ROCE(5y)20.86%
ROICexcg growth 3Y5.24%
ROICexcg growth 5Y0.73%
ROICexc growth 3Y-6.08%
ROICexc growth 5Y-5.64%
OM growth 3Y-2.35%
OM growth 5Y1.63%
PM growth 3Y-8.98%
PM growth 5Y-1.63%
GM growth 3Y-0.44%
GM growth 5Y0.35%
F-Score8
Asset Turnover1.03
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.85 | ||
| Debt/FCF | 4.93 | ||
| Debt/EBITDA | 1.44 | ||
| Cap/Depr | 83.02% | ||
| Cap/Sales | 2.97% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 63.55% | ||
| Profit Quality | 95.15% | ||
| Current Ratio | 0.92 | ||
| Quick Ratio | 0.62 | ||
| Altman-Z | 3.79 |
F-Score8
WACC8.01%
ROIC/WACC2
Cap/Depr(3y)103.23%
Cap/Depr(5y)111.97%
Cap/Sales(3y)3.32%
Cap/Sales(5y)3.34%
Profit Quality(3y)99.9%
Profit Quality(5y)111.34%
High Growth Momentum
Growth
EPS 1Y (TTM)30.94%
EPS 3Y5.42%
EPS 5Y6.53%
EPS Q2Q%10.95%
EPS Next Y14.45%
EPS Next 2Y12.94%
EPS Next 3Y12.26%
EPS Next 5Y9.7%
Revenue 1Y (TTM)4.84%
Revenue growth 3Y6.26%
Revenue growth 5Y3.16%
Sales Q2Q%4.06%
Revenue Next Year5%
Revenue Next 2Y4.78%
Revenue Next 3Y4.82%
Revenue Next 5Y5.2%
EBIT growth 1Y25.1%
EBIT growth 3Y3.76%
EBIT growth 5Y4.84%
EBIT Next Year51.05%
EBIT Next 3Y20.15%
EBIT Next 5Y13.13%
FCF growth 1Y12.43%
FCF growth 3Y0.51%
FCF growth 5Y21.86%
OCF growth 1Y0.03%
OCF growth 3Y3.21%
OCF growth 5Y12.52%