PARKER HANNIFIN CORP (PH) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:PH - US7010941042 - Common Stock
933.05 USD
+5.06 (+0.55%)
933.05 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to PH. PH was compared to 132 industry peers in the Machinery industry. PH has an excellent profitability rating, but there are some minor concerns on its financial health. While showing a medium growth rate, PH is valued expensive at the moment.
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.
- PH had positive earnings in each of the past 5 years.
- PH had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- The Return On Assets of PH (11.87%) is better than 84.85% of its industry peers.
- With an excellent Return On Equity value of 26.43%, PH belongs to the best of the industry, outperforming 93.94% of the companies in the same industry.
- Looking at the Return On Invested Capital, with a value of 14.75%, PH belongs to the top of the industry, outperforming 86.36% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for PH is above the industry average of 10.24%.
- The last Return On Invested Capital (14.75%) for PH is above the 3 year average (12.83%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.87% | ||
| ROE | 26.43% | ||
| ROIC | 14.75% |
ROA(3y)9.54%
ROA(5y)8.46%
ROE(3y)23.18%
ROE(5y)21.04%
ROIC(3y)12.83%
ROIC(5y)12.22%
1.3 Margins
- PH has a Profit Margin of 18.18%. This is amongst the best in the industry. PH outperforms 94.70% of its industry peers.
- PH's Profit Margin has improved in the last couple of years.
- The Operating Margin of PH (21.31%) is better than 91.67% of its industry peers.
- In the last couple of years the Operating Margin of PH has grown nicely.
- PH has a better Gross Margin (37.20%) than 70.45% of its industry peers.
- In the last couple of years the Gross Margin of PH has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.31% | ||
| PM (TTM) | 18.18% | ||
| GM | 37.2% |
OM growth 3Y5.19%
OM growth 5Y10.03%
PM growth 3Y28.96%
PM growth 5Y15.1%
GM growth 3Y3.36%
GM growth 5Y7.88%
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 less shares outstanding than it did 1 year ago.
- The number of shares outstanding for PH has been reduced compared to 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 6.31 indicates that PH is not in any danger for bankruptcy at the moment.
- PH has a better Altman-Z score (6.31) than 85.61% of its industry peers.
- PH has a debt to FCF ratio of 3.05. This is a good value and a sign of high solvency as PH would need 3.05 years to pay back of all of its debts.
- PH has a better Debt to FCF ratio (3.05) than 68.18% of its industry peers.
- PH has a Debt/Equity ratio of 0.54. This is a neutral value indicating PH is somewhat dependend on debt financing.
- With a Debt to Equity ratio value of 0.54, PH perfoms like the industry average, outperforming 46.21% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.54 | ||
| Debt/FCF | 3.05 | ||
| Altman-Z | 6.31 |
ROIC/WACC1.56
WACC9.48%
2.3 Liquidity
- PH has a Current Ratio of 1.07. This is a normal value and indicates that PH is financially healthy and should not expect problems in meeting its short term obligations.
- PH has a Current ratio of 1.07. This is amonst the worse of the industry: PH underperforms 86.36% of its industry peers.
- A Quick Ratio of 0.61 indicates that PH may have some problems paying its short term obligations.
- With a Quick ratio value of 0.61, PH is not doing good in the industry: 85.61% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.07 | ||
| Quick Ratio | 0.61 |
3. Growth
3.1 Past
- PH shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.73%, which is quite good.
- The Earnings Per Share has been growing by 20.50% on average over the past years. This is a very strong growth
- The Revenue has been growing slightly by 0.22% in the past year.
- Measured over the past years, PH shows a small growth in Revenue. The Revenue has been growing by 7.70% on average per year.
EPS 1Y (TTM)10.73%
EPS 3Y13.5%
EPS 5Y20.5%
EPS Q2Q%16.45%
Revenue 1Y (TTM)0.22%
Revenue growth 3Y7.76%
Revenue growth 5Y7.7%
Sales Q2Q%3.67%
3.2 Future
- PH is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.19% yearly.
- The Revenue is expected to grow by 5.48% on average over the next years.
EPS Next Y14.16%
EPS Next 2Y11.9%
EPS Next 3Y11.1%
EPS Next 5Y9.19%
Revenue Next Year6.92%
Revenue Next 2Y7.09%
Revenue Next 3Y6.64%
Revenue Next 5Y5.48%
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 32.88 indicates a quite expensive valuation of PH.
- 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 valuation a bit more expensive than the S&P500 average which is at 27.25.
- The Price/Forward Earnings ratio is 27.24, which means the current valuation is very expensive for PH.
- PH's Price/Forward Earnings is on the same level as the industry average.
- The average S&P500 Price/Forward Earnings ratio is at 25.98. PH is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.88 | ||
| Fwd PE | 27.24 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PH indicates a slightly more expensive valuation: PH is more expensive than 67.42% of the companies listed in the same industry.
- The rest of the industry has a similar Price/Free Cash Flow ratio as PH.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.78 | ||
| EV/EBITDA | 24.51 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- PH has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.32
PEG (5Y)1.6
EPS Next 2Y11.9%
EPS Next 3Y11.1%
5. Dividend
5.1 Amount
- PH has a yearly dividend return of 0.77%, which is pretty low.
- Compared to an average industry Dividend Yield of 1.01, PH pays a bit more dividend than its industry peers.
- With a Dividend Yield of 0.77, PH pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.77% |
5.2 History
- On average, the dividend of PH grows each year by 13.82%, 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)13.82%
Div Incr Years8
Div Non Decr Years34
5.3 Sustainability
- PH pays out 24.15% 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.
DP24.15%
EPS Next 2Y11.9%
EPS Next 3Y11.1%
PARKER HANNIFIN CORP / PH FAQ
What is the fundamental rating for PH stock?
ChartMill assigns a fundamental rating of 6 / 10 to PH.
What is the valuation status for PH stock?
ChartMill assigns a valuation rating of 2 / 10 to PARKER HANNIFIN CORP (PH). This can be considered as Overvalued.
How profitable is PARKER HANNIFIN CORP (PH) stock?
PARKER HANNIFIN CORP (PH) has a profitability rating of 9 / 10.
How financially healthy is PARKER HANNIFIN CORP?
The financial health rating of PARKER HANNIFIN CORP (PH) is 5 / 10.
Can you provide the expected EPS growth for PH stock?
The Earnings per Share (EPS) of PARKER HANNIFIN CORP (PH) is expected to grow by 14.16% in the next year.