The Valspar Corp

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VAL : NYSE : Basic Materials
$102.05 | %
Today's Range: 101.9 - 102.35
Avg. Daily Volume: 511400.0
12/02/16 - 4:03 PM ET

Financial Analysis


VALSPAR 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. 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 0.72 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 increased by 17.77% 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 ($mil)1141.941149.13
EBITDA ($mil)209.57196.74
EBIT ($mil)186.09174.17
Net Income ($mil)116.99102.86


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)171.06344.28
Total Assets ($mil)4390.084578.02
Total Debt ($mil)1949.312339.21
Equity ($mil)1041.4884.21


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin39.6938.13
EBITDA Margin18.3517.12
Operating Margin16.315.16
Sales Turnover0.960.98
Return on Assets8.018.85
Return on Equity33.7845.82
Debt Q3 FY16 Q3 FY15
Current Ratio1.211.15
Debt/Capital0.650.73
Interest Expense23.0822.62
Interest Coverage8.067.7


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)79.3479.79
Div / share0.330.3
EPS1.441.25
Book value / share13.1311.08
Institutional Own % n/a n/a
Avg Daily Volume479187.0487698.0

Valuation


BUY. VALSPAR CORP's P/E ratio indicates a discount compared to an average of 28.02 for the Chemicals industry and a value on par with the S&P 500 average of 25.16. For additional comparison, its price-to-book ratio of 7.72 indicates a significant premium versus the S&P 500 average of 2.79 and a significant premium versus the industry average of 5.24. The current price-to-sales ratio is similar to the S&P 500 average, but it is 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 23.35 Peers 28.02   VAL 15.36 Peers 14.19

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

VAL is trading at a discount to its peers.

 

Average. 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 valuation on par 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 19.20 Peers 20.30   VAL 11.97 Peers 2.18

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.

 

Premium. 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 premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
VAL 7.72 Peers 5.24   VAL -10.70 Peers -5.71

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 significant premium to its peers.

 

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

However, VAL 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
VAL 1.90 Peers 2.21   VAL -6.01 Peers -5.71

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 discount to its industry on this measurement.

 

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

VAL significantly trails its peers on the basis of sales growth

 

 

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