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Mead Johnson Nutrition Co
MJN : NYSE : Consumer Goods
$97.75 0.16 | 0.16%
Today's Range: 96.77 - 97.96
Avg. Daily Volume: 1,153,900
05/27/15 - 3:59 PM ET

Financial Analysis


MEAD JOHNSON NUTRITION CO's gross profit margin for the first quarter of its fiscal year 2015 is essentially unchanged when compared to the same period a year ago. Even though sales decreased, the net income has increased, representing an increase to the bottom line. MEAD JOHNSON NUTRITION CO has strong liquidity. Currently, the Quick Ratio is 1.53 which shows the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

At the same time, stockholders' equity ("net worth") has greatly increased by 92.97% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q1 FY15 Q1 FY14
Net Sales ($mil)1094.41113.3
EBITDA ($mil)322.3319.7
EBIT ($mil)298.2297.7
Net Income ($mil)207.4202.4


Balance Sheet Q1 FY15 Q1 FY14
Cash & Equiv. ($mil)1433.91090.0
Total Assets ($mil)3884.73541.2
Total Debt ($mil)1511.91514.1
Equity ($mil)667.5345.9


Profitability Q1 FY15 Q1 FY14
Gross Profit Margin66.2565.53
EBITDA Margin29.4428.71
Operating Margin27.2526.74
Sales Turnover1.131.21
Return on Assets18.6519.71
Return on Equity108.58201.85
Debt Q1 FY15 Q1 FY14
Current Ratio2.121.26
Debt/Capital0.690.81
Interest Expense16.414.8
Interest Coverage18.1820.11


Share Data Q1 FY15 Q1 FY14
Shares outstanding (mil)202.6202.1
Div / share0.410.38
EPS1.021.0
Book value / share3.291.71
Institutional Own % n/a n/a
Avg Daily Volume1141321.01117979.0

Valuation


BUY. MEAD JOHNSON NUTRITION CO's P/E ratio indicates a premium compared to an average of 27.00 for the Food Products industry and a premium compared to the S&P 500 average of 20.83. For additional comparison, its price-to-book ratio of 29.67 indicates a significant premium versus the S&P 500 average of 2.88 and a significant premium versus the industry average of 6.32. 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 27.46 Peers 27.00   MJN 22.74 Peers 16.60

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 22.16 Peers 21.47   MJN 2.11 Peers 2.17

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.

 

Average. 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 valuation on par to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
MJN 29.67 Peers 6.32   MJN 3.79 Peers 23.93

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 4.51 Peers 1.82   MJN 2.67 Peers 1.22

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.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

MJN has a sales growth rate that significantly exceeds its peers.

 

 

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