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Valspar Corp
VAL : NYSE : Basic Materials
$82.82 | %
Today's Range: 82.68 - 83.73
Avg. Daily Volume: 561,800
07/02/15 - 4:01 PM ET

Financial Analysis


VALSPAR CORP's gross profit margin for the second quarter of its fiscal year 2015 has increased 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. VALSPAR CORP has weak liquidity. Currently, the Quick Ratio is 0.69 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 16.84% 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 Q2 FY15 Q2 FY14
Net Sales ($mil)1079.291155.83
EBITDA ($mil)179.75176.42
EBIT ($mil)158.16151.93
Net Income ($mil)90.3185.96


Balance Sheet Q2 FY15 Q2 FY14
Cash & Equiv. ($mil)147.81119.47
Total Assets ($mil)3978.864092.16
Total Debt ($mil)1786.351649.09
Equity ($mil)871.371047.87


Profitability Q2 FY15 Q2 FY14
Gross Profit Margin38.5535.78
EBITDA Margin16.6515.26
Operating Margin14.6513.14
Sales Turnover1.141.06
Return on Assets10.057.25
Return on Equity45.9228.32
Debt Q2 FY15 Q2 FY14
Current Ratio1.141.03
Debt/Capital0.670.61
Interest Expense20.2415.76
Interest Coverage7.819.64


Share Data Q2 FY15 Q2 FY14
Shares outstanding (mil)80.5783.77
Div / share0.30.26
EPS1.090.99
Book value / share10.8212.51
Institutional Own % n/a n/a
Avg Daily Volume578499.0487019.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 24.44 for the Chemicals industry and a discount compared to the S&P 500 average of 20.55. Conducting a second comparison, its price-to-book ratio of 7.80 indicates a significant premium versus the S&P 500 average of 2.84 and a premium versus the industry average of 6.94. The price-to-sales ratio is below the S&P 500 average and is well below the industry average, indicating a discount. The valuation analysis reveals that, VALSPAR CORP seems to be trading at a discount 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
VAL 17.75 Peers 24.44   VAL 20.42 Peers 15.50

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

VAL is trading at a significant discount to 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.

VAL 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
VAL 16.09 Peers 18.89   VAL 1.21 Peers 2.81

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

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

 

Discount. 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.

VAL trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
VAL 7.80 Peers 6.94   VAL 41.36 Peers 35.61

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.

VAL is trading at a premium to its peers.

 

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

VAL is expected to have an earnings growth rate that exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
VAL 1.50 Peers 2.32   VAL 4.56 Peers 4.54

Discount. 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.

VAL is trading at a significant discount to its industry on this measurement.

 

Average. Comparing a company's sales growth to its industry helps to determine if the company is adding or losing market share.

VAL is keeping pace with its peers on the basis of sales growth.

 

 

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