Avery Dennison Corp

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AVY : NYSE : Consumer Goods
$72.60 | %
Today's Range: 72.03 - 72.93
Avg. Daily Volume: 752,000
07/22/16 - 4:02 PM ET

Financial Analysis


AVERY DENNISON CORP's gross profit margin for the first quarter of its fiscal year 2016 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. AVERY DENNISON CORP has weak liquidity. Currently, the Quick Ratio is 0.76 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

During the same period, stockholders' equity ("net worth") has decreased by 5.62% 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 Q1 FY16 Q1 FY15
Net Sales ($mil)1485.51528.0
EBITDA ($mil)188.7162.8
EBIT ($mil)144.4129.6
Net Income ($mil)89.671.9


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)191.1213.3
Total Assets ($mil)4249.44312.6
Total Debt ($mil)1228.21211.0
Equity ($mil)968.31026.0


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin31.4330.31
EBITDA Margin12.710.65
Operating Margin9.728.48
Sales Turnover1.391.46
Return on Assets6.875.69
Return on Equity30.1624.13
Debt Q1 FY16 Q1 FY15
Current Ratio1.181.22
Debt/Capital0.560.54
Interest Expense15.815.8
Interest Coverage9.148.2


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)89.2890.83
Div / share0.370.35
EPS0.980.77
Book value / share10.8511.3
Institutional Own % n/a n/a
Avg Daily Volume751412.01004438.0

Valuation


BUY. AVERY DENNISON CORP's P/E ratio indicates a discount compared to an average of 32.69 for the Containers & Packaging industry and a value on par with the S&P 500 average of 25.03. To use another comparison, its price-to-book ratio of 6.76 indicates a significant premium versus the S&P 500 average of 2.80 and a significant discount versus the industry average of 10.75. The current price-to-sales ratio is well below the S&P 500 average, but above the industry average. 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 23.14 Peers 32.69   AVY 14.38 Peers 10.05

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.

 

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.

AVY 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
AVY 17.06 Peers 16.95   AVY 0.77 Peers 1.42

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

AVY is trading at a premium to 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 6.76 Peers 10.75   AVY 20.53 Peers -4.86

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 significant discount to its peers.

 

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

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

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
AVY 1.11 Peers 1.04   AVY -6.09 Peers -1.15

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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