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Mead Johnson Nutrition Company
MJN : NYSE : Consumer Goods

$82.21 | %
Today's Range: 0.00 - 0.00
Avg. Daily Volume: 2,079,300
04/15/14 - 4:05 PM ET

Financial Analysis


MEAD JOHNSON NUTRITION CO's gross profit margin for the fourth quarter of its fiscal year 2013 is essentially unchanged when compared to the same period a year ago. Sales and net income have grown, and although the growth in revenues has outpaced the average competitor within the industry, the net income growth has not. MEAD JOHNSON NUTRITION CO has weak liquidity. Currently, the Quick Ratio is 0.81 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has greatly increased by 1,460.42% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q4 FY13 Q4 FY12
Net Sales ($mil)1060.7981.1
EBITDA ($mil)241.4224.3
EBIT ($mil)220.4204.1
Net Income ($mil)153.2134.2


Balance Sheet Q4 FY13 Q4 FY12
Cash & Equiv. ($mil)1050.81042.1
Total Assets ($mil)3474.13258.2
Total Debt ($mil)1516.71710.2
Equity ($mil)291.818.7


Profitability Q4 FY13 Q4 FY12
Gross Profit Margin65.0263.12
EBITDA Margin22.7522.86
Operating Margin20.7820.8
Sales Turnover1.211.2
Return on Assets18.6918.55
Return on Equity222.583232.62
Debt Q4 FY13 Q4 FY12
Current Ratio1.191.47
Debt/Capital0.840.99
Interest Expense13.917.6
Interest Coverage15.8611.6


Share Data Q4 FY13 Q4 FY12
Shares outstanding (mil)202.0202.5
Div / share0.340.3
EPS0.750.66
Book value / share1.440.09
Institutional Own % n/a n/a
Avg Daily Volume1984241.01529561.0

Valuation


BUY. MEAD JOHNSON NUTRITION CO's P/E ratio indicates a premium compared to an average of 25.80 for the Food Products industry and a premium compared to the S&P 500 average of 18.29. For additional comparison, its price-to-book ratio of 58.12 indicates a significant premium versus the S&P 500 average of 2.52 and a significant premium versus the industry average of 7.13. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, MEAD JOHNSON NUTRITION CO proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
MJN 26.32 Peers 25.80   MJN 21.03 Peers 16.51

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

MJN is trading at a valuation on par with its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

MJN is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
MJN 20.68 Peers 19.66   MJN 1.95 Peers 1.69

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

MJN is trading at a premium to its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

MJN trades at a premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
MJN 58.12 Peers 7.13   MJN 7.77 Peers 62.01

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

MJN is trading at a significant premium to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, MJN is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
MJN 4.04 Peers 1.98   MJN 7.67 Peers 14.68

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

MJN is trading at a significant premium to its industry.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

MJN significantly trails its peers on the basis of sales growth

 

 

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