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 23 industry peers in the Containers & Packaging industry. AVY gets an excellent profitability rating and is at the same time showing great financial health properties. AVY is valied quite expensively at the moment, while 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.
In the past 5 years AVY has always been profitable.
Each year in the past 5 years AVY had a positive operating cash flow.
1.2 Ratios
The Return On Assets of AVY (8.39%) is better than 86.96% of its industry peers.
AVY has a better Return On Equity (30.48%) than 91.30% of its industry peers.
AVY's Return On Invested Capital of 14.73% is amongst the best of the industry. AVY outperforms 100.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AVY is significantly above the industry average of 7.71%.
The 3 year average ROIC (14.25%) for AVY is below the current ROIC(14.73%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.39% | ||
| ROE | 30.48% | ||
| ROIC | 14.73% |
ROA(3y)8.01%
ROA(5y)8.49%
ROE(3y)30.46%
ROE(5y)33.45%
ROIC(3y)14.25%
ROIC(5y)14.29%
1.3 Margins
The Profit Margin of AVY (8.05%) is better than 86.96% of its industry peers.
In the last couple of years the Profit Margin of AVY has grown nicely.
The Operating Margin of AVY (12.74%) is better than 82.61% of its industry peers.
AVY's Operating Margin has improved in the last couple of years.
The Gross Margin of AVY (28.90%) is better than 82.61% of its industry peers.
AVY's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.74% | ||
| PM (TTM) | 8.05% | ||
| GM | 28.9% |
OM growth 3Y0.21%
OM growth 5Y1.72%
PM growth 3Y-2.93%
PM growth 5Y13.39%
GM growth 3Y1.67%
GM growth 5Y1.42%
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
Compared to 1 year ago, AVY has an improved debt to assets ratio.
2.2 Solvency
AVY has an Altman-Z score of 3.70. This indicates that AVY is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.70, AVY belongs to the top of the industry, outperforming 91.30% of the companies in the same industry.
The Debt to FCF ratio of AVY is 4.51, which is a neutral value as it means it would take AVY, 4.51 years of fcf income to pay off all of its debts.
AVY has a Debt to FCF ratio of 4.51. This is amongst the best in the industry. AVY outperforms 95.65% of its industry peers.
AVY has a Debt/Equity ratio of 1.11. This is a high value indicating a heavy dependency on external financing.
AVY has a better Debt to Equity ratio (1.11) than 65.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.11 | ||
| Debt/FCF | 4.51 | ||
| Altman-Z | 3.7 |
ROIC/WACC1.9
WACC7.75%
2.3 Liquidity
A Current Ratio of 1.08 indicates that AVY should not have too much problems paying its short term obligations.
The Current ratio of AVY (1.08) is worse than 78.26% of its industry peers.
A Quick Ratio of 0.73 indicates that AVY may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.73, AVY is in line with its industry, outperforming 43.48% of the companies in the same industry.
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 | 1.08 | ||
| Quick Ratio | 0.73 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 13.09% over the past year.
Measured over the past 5 years, AVY shows a small growth in Earnings Per Share. The EPS has been growing by 7.41% on average per year.
Looking at the last year, AVY shows a small growth in Revenue. The Revenue has grown by 4.68% in the last year.
Measured over the past years, AVY shows a small growth in Revenue. The Revenue has been growing by 4.37% on average per year.
EPS 1Y (TTM)13.09%
EPS 3Y1.83%
EPS 5Y7.41%
EPS Q2Q%-8.81%
Revenue 1Y (TTM)4.68%
Revenue growth 3Y1.36%
Revenue growth 5Y4.37%
Sales Q2Q%3.56%
3.2 Future
The Earnings Per Share is expected to grow by 7.69% on average over the next years.
Based on estimates for the next years, AVY will show a small growth in Revenue. The Revenue will grow by 4.41% on average per year.
EPS Next Y7.4%
EPS Next 2Y9.32%
EPS Next 3Y9.87%
EPS Next 5Y7.69%
Revenue Next Year1.8%
Revenue Next 2Y3.05%
Revenue Next 3Y3.66%
Revenue Next 5Y4.41%
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 stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 18.14, AVY is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of AVY indicates a slightly more expensive valuation: AVY is more expensive than 60.87% of the companies listed in the same industry.
AVY's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.29.
The Price/Forward Earnings ratio is 16.89, which indicates a correct valuation of AVY.
Based on the Price/Forward Earnings ratio, AVY is valued a bit more expensive than the industry average as 65.22% of the companies are valued more cheaply.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.08, AVY is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.14 | ||
| Fwd PE | 16.89 |
4.2 Price Multiples
65.22% of the companies in the same industry are cheaper than AVY, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AVY is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.3 | ||
| EV/EBITDA | 11.43 |
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 AVY may justify a higher PE ratio.
PEG (NY)2.45
PEG (5Y)2.45
EPS Next 2Y9.32%
EPS Next 3Y9.87%
5. Dividend
5.1 Amount
AVY has a Yearly Dividend Yield of 2.06%. Purely for dividend investing, there may be better candidates out there.
AVY's Dividend Yield is comparable with the industry average which is at 3.59.
Compared to an average S&P500 Dividend Yield of 2.52, AVY has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.06% |
5.2 History
The dividend of AVY is nicely growing with an annual growth rate of 14.44%!
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)14.44%
Div Incr Years14
Div Non Decr Years14
5.3 Sustainability
39.37% of the earnings are spent on dividend by AVY. This is a low number and sustainable payout ratio.
AVY's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP39.37%
EPS Next 2Y9.32%
EPS Next 3Y9.87%
170.85
+2.7 (+1.61%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryContainers & Packaging
Earnings (Last)
Earnings (Next)
Inst Owners94.74%
Inst Owner Change0%
Ins Owners0.55%
Ins Owner Change4.1%
Market Cap13.49B
Analysts77.78
Price Target215.18 (25.95%)
Short Float %1.92%
Short Ratio2.06
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.06% |
Yearly Dividend3.46
Dividend Growth(5Y)14.44%
DP39.37%
Div Incr Years14
Div Non Decr Years14
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-0.82%
Min EPS beat(2)-0.87%
Max EPS beat(2)-0.77%
EPS beat(4)2
Avg EPS beat(4)2.45%
Min EPS beat(4)-0.87%
Max EPS beat(4)6.18%
EPS beat(8)4
Avg EPS beat(8)3.14%
EPS beat(12)6
Avg EPS beat(12)2.06%
EPS beat(16)9
Avg EPS beat(16)3.33%
Revenue beat(2)0
Avg Revenue beat(2)-1.46%
Min Revenue beat(2)-1.74%
Max Revenue beat(2)-1.19%
Revenue beat(4)1
Avg Revenue beat(4)-0.61%
Min Revenue beat(4)-1.74%
Max Revenue beat(4)1.42%
Revenue beat(8)1
Avg Revenue beat(8)-2.13%
Revenue beat(12)2
Avg Revenue beat(12)-1.95%
Revenue beat(16)6
Avg Revenue beat(16)-0.13%
PT rev (1m)0%
PT rev (3m)-10.23%
EPS NQ rev (1m)-0.08%
EPS NQ rev (3m)-6.08%
EPS NY rev (1m)0.11%
EPS NY rev (3m)-4.79%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-4.28%
Revenue NY rev (1m)-0.27%
Revenue NY rev (3m)-2.95%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.14 | ||
| Fwd PE | 16.89 | ||
| P/S | 1.54 | ||
| P/FCF | 19.3 | ||
| P/OCF | 14.37 | ||
| P/B | 5.83 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.43 |
EPS(TTM)9.42
EY5.51%
EPS(NY)10.12
Fwd EY5.92%
FCF(TTM)8.85
FCFY5.18%
OCF(TTM)11.89
OCFY6.96%
SpS110.87
BVpS29.28
TBVpS-5.31
PEG (NY)2.45
PEG (5Y)2.45
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.39% | ||
| ROE | 30.48% | ||
| ROCE | 20.13% | ||
| ROIC | 14.73% | ||
| ROICexc | 15.66% | ||
| ROICexgc | 32.89% | ||
| OM | 12.74% | ||
| PM (TTM) | 8.05% | ||
| GM | 28.9% | ||
| FCFM | 7.98% |
ROA(3y)8.01%
ROA(5y)8.49%
ROE(3y)30.46%
ROE(5y)33.45%
ROIC(3y)14.25%
ROIC(5y)14.29%
ROICexc(3y)14.91%
ROICexc(5y)14.95%
ROICexgc(3y)33.61%
ROICexgc(5y)31.22%
ROCE(3y)19.49%
ROCE(5y)19.77%
ROICexcg growth 3Y5.53%
ROICexcg growth 5Y1.48%
ROICexc growth 3Y3.87%
ROICexc growth 5Y-4.31%
OM growth 3Y0.21%
OM growth 5Y1.72%
PM growth 3Y-2.93%
PM growth 5Y13.39%
GM growth 3Y1.67%
GM growth 5Y1.42%
F-Score9
Asset Turnover1.04
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.11 | ||
| Debt/FCF | 4.51 | ||
| Debt/EBITDA | 1.79 | ||
| Cap/Depr | 76.81% | ||
| Cap/Sales | 2.74% | ||
| Interest Coverage | 9.98 | ||
| Cash Conversion | 65.76% | ||
| Profit Quality | 99.16% | ||
| Current Ratio | 1.08 | ||
| Quick Ratio | 0.73 | ||
| Altman-Z | 3.7 |
F-Score9
WACC7.75%
ROIC/WACC1.9
Cap/Depr(3y)91.68%
Cap/Depr(5y)98.6%
Cap/Sales(3y)3.15%
Cap/Sales(5y)3.16%
Profit Quality(3y)98.07%
Profit Quality(5y)98.94%
High Growth Momentum
Growth
EPS 1Y (TTM)13.09%
EPS 3Y1.83%
EPS 5Y7.41%
EPS Q2Q%-8.81%
EPS Next Y7.4%
EPS Next 2Y9.32%
EPS Next 3Y9.87%
EPS Next 5Y7.69%
Revenue 1Y (TTM)4.68%
Revenue growth 3Y1.36%
Revenue growth 5Y4.37%
Sales Q2Q%3.56%
Revenue Next Year1.8%
Revenue Next 2Y3.05%
Revenue Next 3Y3.66%
Revenue Next 5Y4.41%
EBIT growth 1Y15.73%
EBIT growth 3Y1.58%
EBIT growth 5Y6.16%
EBIT Next Year30.24%
EBIT Next 3Y14.03%
EBIT Next 5Y9.97%
FCF growth 1Y29.23%
FCF growth 3Y-3.37%
FCF growth 5Y7.39%
OCF growth 1Y13.66%
OCF growth 3Y-3.56%
OCF growth 5Y4.69%