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 128 industry peers in the Machinery industry. While PH has a great profitability rating, there are some minor concerns on its financial health. PH has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
PH had positive earnings in the past year.
PH had a positive operating cash flow in the past year.
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
With an excellent Return On Assets value of 11.73%, PH belongs to the best of the industry, outperforming 85.94% of the companies in the same industry.
PH's Return On Equity of 25.34% is amongst the best of the industry. PH outperforms 90.63% of its industry peers.
Looking at the Return On Invested Capital, with a value of 13.75%, PH belongs to the top of the industry, outperforming 81.25% of the companies in the same industry.
PH had an Average Return On Invested Capital over the past 3 years of 11.38%. This is in line with the industry average of 10.71%.
The last Return On Invested Capital (13.75%) for PH is above the 3 year average (11.38%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.73% | ||
| ROE | 25.34% | ||
| ROIC | 13.75% |
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's Profit Margin of 17.14% is amongst the best of the industry. PH outperforms 92.97% of its industry peers.
PH's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 20.63%, PH belongs to the top of the industry, outperforming 90.63% of the companies in the same industry.
PH's Operating Margin has improved in the last couple of years.
PH has a better Gross Margin (36.64%) than 67.19% of its industry peers.
In the last couple of years the Gross Margin of PH has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.63% | ||
| PM (TTM) | 17.14% | ||
| GM | 36.64% |
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
PH has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for PH remains at a similar level compared to 1 year ago.
PH has more shares outstanding than it did 5 years ago.
The debt/assets ratio for PH has been reduced compared to a year ago.
2.2 Solvency
PH has an Altman-Z score of 5.73. This indicates that PH is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of PH (5.73) is better than 80.47% of its industry peers.
The Debt to FCF ratio of PH is 3.00, which is a good value as it means it would take PH, 3.00 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 3.00, PH is doing good in the industry, outperforming 64.84% of the companies in the same industry.
PH has a Debt/Equity ratio of 0.55. This is a neutral value indicating PH is somewhat dependend on debt financing.
PH has a Debt to Equity ratio (0.55) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 3 | ||
| Altman-Z | 5.73 |
ROIC/WACC1.4
WACC9.85%
2.3 Liquidity
PH has a Current Ratio of 1.21. This is a normal value and indicates that PH is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.21, PH is doing worse than 84.38% of the companies in the same industry.
PH has a Quick Ratio of 1.21. This is a bad value and indicates that PH is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of PH (0.70) is worse than 85.94% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.21 | ||
| Quick Ratio | 0.7 |
3. Growth
3.1 Past
PH shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.04%.
Measured over the past years, PH shows a quite strong growth in Earnings Per Share. The EPS has been growing by 16.50% on average per year.
PH shows a decrease in Revenue. In the last year, the revenue decreased by -0.23%.
PH shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.83% yearly.
EPS 1Y (TTM)7.04%
EPS 3Y19.18%
EPS 5Y16.5%
EPS Q2Q%6.61%
Revenue 1Y (TTM)-0.23%
Revenue growth 3Y11.58%
Revenue growth 5Y6.83%
Sales Q2Q%-2.25%
3.2 Future
The Earnings Per Share is expected to grow by 6.84% on average over the next years.
PH is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.81% yearly.
EPS Next Y8.29%
EPS Next 2Y8.16%
EPS Next 3Y8.31%
EPS Next 5Y6.84%
Revenue Next Year-0.51%
Revenue Next 2Y1.82%
Revenue Next 3Y3.09%
Revenue Next 5Y3.81%
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
Based on the Price/Earnings ratio of 27.20, the valuation of PH can be described as expensive.
The rest of the industry has a similar Price/Earnings ratio as PH.
When comparing the Price/Earnings ratio of PH to the average of the S&P500 Index (27.28), we can say PH is valued inline with the index average.
The Price/Forward Earnings ratio is 24.21, which indicates a rather expensive current valuation of 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 21.76. PH is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.2 | ||
| Fwd PE | 24.21 |
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 64.06% of the companies listed in the same industry.
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 | 29.41 | ||
| EV/EBITDA | 20.01 |
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)3.28
PEG (5Y)1.65
EPS Next 2Y8.16%
EPS Next 3Y8.31%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.04%, PH has a reasonable but not impressive dividend return.
PH's Dividend Yield is a higher than the industry average which is at 1.88.
Compared to an average S&P500 Dividend Yield of 2.42, PH's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.04% |
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
24.78% of the earnings are spent on dividend by PH. This is a low number and sustainable payout ratio.
PH's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP24.78%
EPS Next 2Y8.16%
EPS Next 3Y8.31%
719.15
+7.69 (+1.08%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners90.24%
Inst Owner Change2.91%
Ins Owners0.17%
Ins Owner Change2.63%
Market Cap91.89B
Analysts81.29
Price Target727.82 (1.21%)
Short Float %1.41%
Short Ratio2.64
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.04% |
Yearly Dividend6.09
Dividend Growth(5Y)13.91%
DP24.78%
Div Incr Years8
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.02%
Min EPS beat(2)0.28%
Max EPS beat(2)1.76%
EPS beat(4)3
Avg EPS beat(4)1.44%
Min EPS beat(4)-1.98%
Max EPS beat(4)5.69%
EPS beat(8)7
Avg EPS beat(8)4.81%
EPS beat(12)11
Avg EPS beat(12)6.22%
EPS beat(16)14
Avg EPS beat(16)6.05%
Revenue beat(2)0
Avg Revenue beat(2)-3.78%
Min Revenue beat(2)-4.13%
Max Revenue beat(2)-3.42%
Revenue beat(4)0
Avg Revenue beat(4)-2.82%
Min Revenue beat(4)-4.13%
Max Revenue beat(4)-0.9%
Revenue beat(8)0
Avg Revenue beat(8)-2.69%
Revenue beat(12)4
Avg Revenue beat(12)-1.01%
Revenue beat(16)5
Avg Revenue beat(16)-1.03%
PT rev (1m)1.23%
PT rev (3m)-6.07%
EPS NQ rev (1m)-0.03%
EPS NQ rev (3m)-2.86%
EPS NY rev (1m)0.04%
EPS NY rev (3m)-0.15%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.32%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)-0.77%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.2 | ||
| Fwd PE | 24.21 | ||
| P/S | 4.64 | ||
| P/FCF | 29.41 | ||
| P/OCF | 25.91 | ||
| P/B | 6.86 | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.01 |
EPS(TTM)26.44
EY3.68%
EPS(NY)29.7
Fwd EY4.13%
FCF(TTM)24.46
FCFY3.4%
OCF(TTM)27.75
OCFY3.86%
SpS154.9
BVpS104.8
TBVpS-34.76
PEG (NY)3.28
PEG (5Y)1.65
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.73% | ||
| ROE | 25.34% | ||
| ROCE | 17.53% | ||
| ROIC | 13.75% | ||
| ROICexc | 13.99% | ||
| ROICexgc | 63.29% | ||
| OM | 20.63% | ||
| PM (TTM) | 17.14% | ||
| GM | 36.64% | ||
| FCFM | 15.79% |
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-Score8
Asset Turnover0.68
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 3 | ||
| Debt/EBITDA | 1.49 | ||
| Cap/Depr | 46.34% | ||
| Cap/Sales | 2.13% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 71.03% | ||
| Profit Quality | 92.11% | ||
| Current Ratio | 1.21 | ||
| Quick Ratio | 0.7 | ||
| Altman-Z | 5.73 |
F-Score8
WACC9.85%
ROIC/WACC1.4
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)7.04%
EPS 3Y19.18%
EPS 5Y16.5%
EPS Q2Q%6.61%
EPS Next Y8.29%
EPS Next 2Y8.16%
EPS Next 3Y8.31%
EPS Next 5Y6.84%
Revenue 1Y (TTM)-0.23%
Revenue growth 3Y11.58%
Revenue growth 5Y6.83%
Sales Q2Q%-2.25%
Revenue Next Year-0.51%
Revenue Next 2Y1.82%
Revenue Next 3Y3.09%
Revenue Next 5Y3.81%
EBIT growth 1Y4.72%
EBIT growth 3Y17.83%
EBIT growth 5Y13.85%
EBIT Next Year23.82%
EBIT Next 3Y12.42%
EBIT Next 5Y8.11%
FCF growth 1Y33.3%
FCF growth 3Y8.06%
FCF growth 5Y14.22%
OCF growth 1Y31.91%
OCF growth 3Y9.54%
OCF growth 5Y14.36%