Avery Dennison Corp

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AVY : NYSE : Consumer Goods
$72.15 | %
Today's Range: 71.81 - 72.95
Avg. Daily Volume: 780600.0
01/13/17 - 4:01 PM ET

Financial Analysis


AVERY DENNISON CORP's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. AVERY DENNISON CORP has weak liquidity. Currently, the Quick Ratio is 0.62 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 1.22% 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 Q3 FY16 Q3 FY15
Net Sales ($mil)1508.71468.1
EBITDA ($mil)177.5168.2
EBIT ($mil)147.3137.8
Net Income ($mil)89.181.7


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)207.9189.2
Total Assets ($mil)4600.44248.9
Total Debt ($mil)1300.61053.6
Equity ($mil)1042.41055.3


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin29.6829.72
EBITDA Margin11.7611.45
Operating Margin9.769.39
Sales Turnover1.31.44
Return on Assets6.866.77
Return on Equity30.2327.26
Debt Q3 FY16 Q3 FY15
Current Ratio0.981.3
Debt/Capital0.560.5
Interest Expense15.515.6
Interest Coverage9.58.83


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)89.291.33
Div / share0.410.37
EPS0.980.87
Book value / share11.6911.56
Institutional Own % n/a n/a
Avg Daily Volume774130.0582587.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 36.90 for the Containers & Packaging industry and a discount compared to the S&P 500 average of 25.49. For additional comparison, its price-to-book ratio of 6.17 indicates a significant premium versus the S&P 500 average of 2.84 and a discount versus the industry average of 7.09. The current price-to-sales ratio is well below the S&P 500 average and is also below the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, AVERY DENNISON CORP proves to trade 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
AVY 20.91 Peers 36.90   AVY 11.66 Peers 48.52

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

AVY is trading at a significant discount to its peers.

 

Discount. 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.

AVY is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
AVY 16.54 Peers 18.28   AVY 0.61 Peers 4.01

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

AVY 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.

AVY 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
AVY 6.17 Peers 7.09   AVY 11.29 Peers 21.46

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

AVY is trading at a discount to its peers.

 

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

However, AVY 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
AVY 1.07 Peers 1.14   AVY -2.07 Peers 2.47

Average. 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.

AVY is trading at a valuation on par with its industry on this measurement.

 

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

AVY significantly trails its peers on the basis of sales growth

 

 

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