The Valspar Corp

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VAL : NYSE : Basic Materials
$105.69 up 0.23 | 0.22%
Today's Range: 105.42 - 105.78
Avg. Daily Volume: 431,200
08/29/16 - 11:55 AM ET

Financial Analysis


VALSPAR CORP's gross profit margin for the second quarter of its fiscal year 2016 has increased when compared to the same period a year ago. Sales and net income have dropped, although the growth in net income underperformed the average competitor within the industry, the revenue growth did not. 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 increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has increased by 11.11% 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 ($mil)1056.81079.29
EBITDA ($mil)184.84179.75
EBIT ($mil)160.17158.16
Net Income ($mil)80.0390.31


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)101.01147.81
Total Assets ($mil)4346.473978.86
Total Debt ($mil)2040.241786.35
Equity ($mil)968.21871.37


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin40.7938.55
EBITDA Margin17.4916.65
Operating Margin15.1614.65
Sales Turnover0.981.15
Return on Assets7.7610.05
Return on Equity34.8745.92
Debt Q2 FY16 Q2 FY15
Current Ratio1.261.14
Debt/Capital0.680.67
Interest Expense22.7920.24
Interest Coverage7.037.81


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)79.2680.57
Div / share0.330.3
EPS0.991.09
Book value / share12.2210.82
Institutional Own % n/a n/a
Avg Daily Volume432234.01061572.0

Valuation


BUY. The current P/E ratio indicates a premium compared to an average of 25.17 for the Chemicals industry and a value on par with the S&P 500 average of 25.13. For additional comparison, its price-to-book ratio of 8.65 indicates a significant premium versus the S&P 500 average of 2.82 and a significant premium versus the industry average of 5.83. The current price-to-sales ratio is similar to the S&P 500 average, but it is below the industry average, indicating a discount. After reviewing these and other key valuation criteria, VALSPAR CORP proves to trade at a premium 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 25.46 Peers 25.17   VAL 19.08 Peers 15.92

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

VAL is trading at a valuation on par with 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 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 20.14 Peers 21.01   VAL NM Peers 1.78

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.

 

Neutral. 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's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
VAL 8.65 Peers 5.83   VAL -12.64 Peers 89.08

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 1.97 Peers 2.34   VAL -7.50 Peers -7.38

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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