PARKER HANNIFIN CORP (PH) Stock Fundamental Analysis
NYSE:PH - New York Stock Exchange, Inc. - US7010941042 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to PH. PH was compared to 129 industry peers in the Machinery industry. PH scores excellent on profitability, 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.
PH had a positive operating cash flow in the past year.
Each year in the past 5 years PH has been profitable.
PH had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 11.17%, PH belongs to the best of the industry, outperforming 81.60% of the companies in the same industry.
PH has a better Return On Equity (24.08%) than 88.80% of its industry peers.
PH has a Return On Invested Capital of 14.21%. This is amongst the best in the industry. PH outperforms 82.40% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PH is in line with the industry average of 11.00%.
The 3 year average ROIC (11.38%) for PH is below the current ROIC(14.21%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.17% | ||
| ROE | 24.08% | ||
| ROIC | 14.21% |
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
PH has a Profit Margin of 15.87%. This is amongst the best in the industry. PH outperforms 91.20% of its industry peers.
PH's Profit Margin has improved in the last couple of years.
PH has a Operating Margin of 20.28%. This is amongst the best in the industry. PH outperforms 88.00% of its industry peers.
In the last couple of years the Operating Margin of PH has grown nicely.
PH's Gross Margin of 36.24% is fine compared to the rest of the industry. PH outperforms 64.00% of its industry peers.
In the last couple of years the Gross Margin of PH has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.28% | ||
| PM (TTM) | 15.87% | ||
| GM | 36.24% |
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.
Compared to 1 year ago, PH has about the same amount of shares outstanding.
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 5.60. 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 5.60, PH is in the better half of the industry, outperforming 78.40% of the companies in the same industry.
PH has a debt to FCF ratio of 2.74. This is a good value and a sign of high solvency as PH would need 2.74 years to pay back of all of its debts.
PH's Debt to FCF ratio of 2.74 is fine compared to the rest of the industry. PH outperforms 68.80% of its industry peers.
A Debt/Equity ratio of 0.51 indicates that PH is somewhat dependend on debt financing.
PH has a Debt to Equity ratio (0.51) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.51 | ||
| Debt/FCF | 2.74 | ||
| Altman-Z | 5.6 |
ROIC/WACC1.38
WACC10.31%
2.3 Liquidity
A Current Ratio of 1.06 indicates that PH should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.06, PH is doing worse than 89.60% of the companies in the same industry.
A Quick Ratio of 0.59 indicates that PH may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.59, PH is doing worse than 91.20% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.06 | ||
| Quick Ratio | 0.59 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.84% over the past year.
PH shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 16.50% yearly.
The Revenue has been growing slightly by 0.41% 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)7.84%
EPS 3Y19.18%
EPS 5Y16.5%
EPS Q2Q%6.18%
Revenue 1Y (TTM)0.41%
Revenue growth 3Y11.58%
Revenue growth 5Y6.83%
Sales Q2Q%-1.63%
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 7.87% on average per year.
The Revenue is expected to grow by 4.20% on average over the next years.
EPS Next Y8.45%
EPS Next 2Y9.21%
EPS Next 3Y8.97%
EPS Next 5Y7.87%
Revenue Next Year0.26%
Revenue Next 2Y2.77%
Revenue Next 3Y3.71%
Revenue Next 5Y4.2%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less 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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 25.64, which means the current valuation is very expensive for PH.
PH's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of PH to the average of the S&P500 Index (29.63), we can say PH is valued inline with the index average.
With a Price/Forward Earnings ratio of 22.02, PH is valued on the expensive side.
PH's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of PH to the average of the S&P500 Index (22.68), we can say PH is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.64 | ||
| Fwd PE | 22.02 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as PH.
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 | 26.04 | ||
| EV/EBITDA | 19.09 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates PH does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of PH may justify a higher PE ratio.
PEG (NY)3.03
PEG (5Y)1.55
EPS Next 2Y9.21%
EPS Next 3Y8.97%
5. Dividend
5.1 Amount
PH has a yearly dividend return of 0.94%, which is pretty low.
PH's Dividend Yield is comparable with the industry average which is at 1.65.
Compared to an average S&P500 Dividend Yield of 2.27, PH's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.94% |
5.2 History
The dividend of PH is nicely growing with an annual growth rate of 13.91%!
PH has been paying a dividend for at least 10 years, so it has a reliable track record.
PH has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)13.91%
Div Incr Years8
Div Non Decr Years34
5.3 Sustainability
PH pays out 25.99% of its income as dividend. This is a sustainable payout ratio.
PH's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP25.99%
EPS Next 2Y9.21%
EPS Next 3Y8.97%
666.97
-28.49 (-4.1%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners88.35%
Inst Owner Change-88.21%
Ins Owners0.14%
Ins Owner Change-0.62%
Market Cap85.88B
Analysts81.33
Price Target772.33 (15.8%)
Short Float %0.8%
Short Ratio1.65
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.94% |
Yearly Dividend6.09
Dividend Growth(5Y)13.91%
DP25.99%
Div Incr Years8
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.11%
Min EPS beat(2)-1.98%
Max EPS beat(2)1.76%
EPS beat(4)3
Avg EPS beat(4)2.06%
Min EPS beat(4)-1.98%
Max EPS beat(4)5.69%
EPS beat(8)7
Avg EPS beat(8)6.64%
EPS beat(12)11
Avg EPS beat(12)6.27%
EPS beat(16)14
Avg EPS beat(16)6.37%
Revenue beat(2)0
Avg Revenue beat(2)-3.47%
Min Revenue beat(2)-4.13%
Max Revenue beat(2)-2.81%
Revenue beat(4)0
Avg Revenue beat(4)-2.65%
Min Revenue beat(4)-4.13%
Max Revenue beat(4)-0.9%
Revenue beat(8)1
Avg Revenue beat(8)-1.87%
Revenue beat(12)4
Avg Revenue beat(12)-0.92%
Revenue beat(16)5
Avg Revenue beat(16)-0.97%
PT rev (1m)2.58%
PT rev (3m)11.27%
EPS NQ rev (1m)-3.7%
EPS NQ rev (3m)-2.49%
EPS NY rev (1m)-0.32%
EPS NY rev (3m)-0.35%
Revenue NQ rev (1m)-3.73%
Revenue NQ rev (3m)-5.29%
Revenue NY rev (1m)-1.75%
Revenue NY rev (3m)-2.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.64 | ||
| Fwd PE | 22.02 | ||
| P/S | 4.31 | ||
| P/FCF | 26.04 | ||
| P/OCF | 23.14 | ||
| P/B | 6.55 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.09 |
EPS(TTM)26.01
EY3.9%
EPS(NY)30.28
Fwd EY4.54%
FCF(TTM)25.62
FCFY3.84%
OCF(TTM)28.82
OCFY4.32%
SpS154.61
BVpS101.88
TBVpS-36.37
PEG (NY)3.03
PEG (5Y)1.55
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.17% | ||
| ROE | 24.08% | ||
| ROCE | 18.12% | ||
| ROIC | 14.21% | ||
| ROICexc | 14.47% | ||
| ROICexgc | 77.49% | ||
| OM | 20.28% | ||
| PM (TTM) | 15.87% | ||
| GM | 36.24% | ||
| FCFM | 16.57% |
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-Score9
Asset Turnover0.7
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.51 | ||
| Debt/FCF | 2.74 | ||
| Debt/EBITDA | 1.35 | ||
| Cap/Depr | 45.14% | ||
| Cap/Sales | 2.07% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 74.96% | ||
| Profit Quality | 104.44% | ||
| Current Ratio | 1.06 | ||
| Quick Ratio | 0.59 | ||
| Altman-Z | 5.6 |
F-Score9
WACC10.31%
ROIC/WACC1.38
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)7.84%
EPS 3Y19.18%
EPS 5Y16.5%
EPS Q2Q%6.18%
EPS Next Y8.45%
EPS Next 2Y9.21%
EPS Next 3Y8.97%
EPS Next 5Y7.87%
Revenue 1Y (TTM)0.41%
Revenue growth 3Y11.58%
Revenue growth 5Y6.83%
Sales Q2Q%-1.63%
Revenue Next Year0.26%
Revenue Next 2Y2.77%
Revenue Next 3Y3.71%
Revenue Next 5Y4.2%
EBIT growth 1Y6.84%
EBIT growth 3Y17.83%
EBIT growth 5Y13.85%
EBIT Next Year24.56%
EBIT Next 3Y13.11%
EBIT Next 5Y8.97%
FCF growth 1Y49.78%
FCF growth 3Y8.06%
FCF growth 5Y14.22%
OCF growth 1Y47.71%
OCF growth 3Y9.54%
OCF growth 5Y14.36%