AVERY DENNISON CORP (AVY)
US0536111091 - Common Stock
We assign a fundamental rating of 6 out of 10 to AVY. AVY was compared to 24 industry peers in the Containers & Packaging industry. While AVY has a great profitability rating, there are some minor concerns on its financial health. AVY is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year AVY was profitable.
In the past year AVY had a positive cash flow from operations.
Each year in the past 5 years AVY has been profitable.
In the past 5 years AVY always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of AVY (7.97%) is better than 86.96% of its industry peers.
AVY's Return On Equity of 28.15% is amongst the best of the industry. AVY outperforms 86.96% of its industry peers.
The Return On Invested Capital of AVY (16.03%) is better than 95.65% of its industry peers.
AVY had an Average Return On Invested Capital over the past 3 years of 14.04%. This is significantly below the industry average of 382233.10%.
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
With an excellent Profit Margin value of 7.76%, AVY belongs to the best of the industry, outperforming 82.61% of the companies in the same industry.
In the last couple of years the Profit Margin of AVY has declined.
AVY has a better Operating Margin (12.72%) than 82.61% of its industry peers.
In the last couple of years the Operating Margin of AVY has grown nicely.
AVY has a better Gross Margin (29.00%) than 78.26% of its industry peers.
In the last couple of years the Gross Margin of AVY has remained more or less at the same level.
| 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.
The number of shares outstanding for AVY has been reduced compared to 1 year ago.
Compared to 5 years ago, AVY has less shares outstanding
The debt/assets ratio for AVY is higher compared to a year ago.
2.2 Solvency
AVY has an Altman-Z score of 3.74. This indicates that AVY is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of AVY (3.74) is better than 86.96% of its industry peers.
AVY has a debt to FCF ratio of 4.93. This is a neutral value as AVY would need 4.93 years to pay back of all of its debts.
The Debt to FCF ratio of AVY (4.93) is better than 86.96% of its industry peers.
A Debt/Equity ratio of 0.85 indicates that AVY is somewhat dependend on debt financing.
AVY's Debt to Equity ratio of 0.85 is fine compared to the rest of the industry. AVY outperforms 69.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.85 | ||
| Debt/FCF | 4.93 | ||
| Altman-Z | 3.74 |
ROIC/WACC1.99
WACC8.06%
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.
AVY's Current ratio of 0.92 is on the low side compared to the rest of the industry. AVY is outperformed by 91.30% of its industry peers.
AVY has a Quick 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 Quick ratio, with a value of 0.62, AVY is doing worse than 91.30% of the companies in the same industry.
The current and quick ratio evaluation for AVY is rather negative, while it does have 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.
The Earnings Per Share has been growing slightly by 6.53% on average over the past years.
Looking at the last year, AVY shows a small growth in Revenue. The Revenue has grown by 4.84% in the last year.
The Revenue has been growing slightly by 3.16% on average over the past years.
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
The Earnings Per Share is expected to grow by 9.70% on average over the next years. This is quite good.
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 Year5.05%
Revenue Next 2Y4.96%
Revenue Next 3Y4.92%
Revenue Next 5Y5.2%
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 accelerating.
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
AVY is valuated rather expensively with a Price/Earnings ratio of 19.50.
Compared to the rest of the industry, the Price/Earnings ratio of AVY indicates a slightly more expensive valuation: AVY is more expensive than 69.57% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of AVY to the average of the S&P500 Index (27.73), we can say AVY is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 17.70, the valuation of AVY can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AVY indicates a slightly more expensive valuation: AVY is more expensive than 69.57% of the companies listed in the same industry.
AVY is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.83, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.5 | ||
| Fwd PE | 17.7 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AVY is valued a bit more expensive than the industry average as 73.91% of the companies are valued more cheaply.
The rest of the industry has a similar Price/Free Cash Flow ratio as AVY.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.57 | ||
| EV/EBITDA | 12.66 |
4.3 Compensation for Growth
AVY's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of AVY 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)1.35
PEG (5Y)2.98
EPS Next 2Y12.94%
EPS Next 3Y12.26%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.78%, AVY has a reasonable but not impressive dividend return.
AVY's Dividend Yield is comparable with the industry average which is at 2.91.
Compared to the average S&P500 Dividend Yield of 2.24, AVY is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.78% |
5.2 History
On average, the dividend of AVY grows each year by 16.63%, which is quite nice.
AVY has paid a dividend for at least 10 years, which is 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 (12/20/2024, 8:04:00 PM)
After market: 188.13 0 (0%)188.13
+1.87 (+1%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryContainers & Packaging
Earnings (Last)
Earnings (Next)
Inst Owners91.16%
Inst Owner Change0.96%
Ins Owners1.08%
Ins Owner Change-0.42%
Market Cap15.12B
Analysts77.78
Price Target239.71 (27.42%)
Short Float %2.4%
Short Ratio3.64
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.78% |
Dividend Growth(5Y)16.63%
DP40.4%
Div Incr Years14
Div Non Decr Years14
Ex-Date
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)-2.23%
PT rev (3m)-2.82%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.71%
EPS NY rev (1m)0%
EPS NY rev (3m)0.02%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.54%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.19%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.5 | ||
| Fwd PE | 17.7 | ||
| P/S | 1.74 | ||
| P/FCF | 23.57 | ||
| P/OCF | 16.81 | ||
| P/B | 6.31 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.66 |
EPS(TTM)9.65
EY5.13%
EPS(NY)10.63
Fwd EY5.65%
FCF(TTM)7.98
FCFY4.24%
OCF(TTM)11.19
OCFY5.95%
SpS108.03
BVpS29.79
TBVpS-5
PEG (NY)1.35
PEG (5Y)2.98
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 | 3.74 |
F-Score8
WACC8.06%
ROIC/WACC1.99
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 Year5.05%
Revenue Next 2Y4.96%
Revenue Next 3Y4.92%
Revenue Next 5Y5.2%
EBIT growth 1Y25.1%
EBIT growth 3Y3.76%
EBIT growth 5Y4.84%
EBIT Next Year51.16%
EBIT Next 3Y20.27%
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%