Avery Dennison Corp

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AVY : NYSE : Consumer Goods
$78.31 up 0.53 | 0.68%
Today's Range: 77.77 - 78.45
Avg. Daily Volume: 631,700
09/28/16 - 4:02 PM ET

Financial Analysis


AVERY DENNISON CORP's gross profit margin for the second 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 0.79 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 decreased by 12.78% 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 FY16 Q2 FY15
Net Sales ($mil)1541.51516.0
EBITDA ($mil)194.5176.0
EBIT ($mil)164.9144.3
Net Income ($mil)80.063.7


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)233.9263.5
Total Assets ($mil)4294.84353.6
Total Debt ($mil)1161.91151.7
Equity ($mil)956.51096.7


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin30.0829.64
EBITDA Margin12.6111.6
Operating Margin10.79.52
Sales Turnover1.391.43
Return on Assets7.176.11
Return on Equity32.1324.37
Debt Q2 FY16 Q2 FY15
Current Ratio1.221.29
Debt/Capital0.550.51
Interest Expense16.216.4
Interest Coverage10.188.8


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)88.9391.57
Div / share0.410.37
EPS0.880.71
Book value / share10.7611.98
Institutional Own % n/a n/a
Avg Daily Volume675961.0712430.0

Valuation


BUY. AVERY DENNISON CORP's P/E ratio indicates a discount compared to an average of 31.09 for the Containers & Packaging industry and a value on par with the S&P 500 average of 25.19. For additional comparison, its price-to-book ratio of 7.33 indicates a significant premium versus the S&P 500 average of 2.82 and a discount versus the industry average of 7.77. 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 23.60 Peers 31.09   AVY 13.53 Peers 10.20

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

AVY is trading at a 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 17.92 Peers 18.21   AVY 0.70 Peers 1.20

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 7.33 Peers 7.77   AVY 16.37 Peers 30.48

Average. 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 valuation on par with 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 1.18 Peers 1.10   AVY -4.17 Peers 3.82

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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