The Valspar Corp

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VAL : NYSE : Basic Materials
$112.44 -0.01 | -0.0089%
Today's Range: 112.35 - 112.515
Avg. Daily Volume: 623900.0
04/26/17 - 3:59 PM ET

Financial Analysis


VALSPAR CORP's gross profit margin for the first quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. 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.

During the same period, stockholders' equity ("net worth") has increased by 24.99% 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 FY17 Q1 FY16
Net Sales ($mil)907.65885.76
EBITDA ($mil)109.13117.61
EBIT ($mil)85.1794.59
Net Income ($mil)40.7552.43


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)154.56153.06
Total Assets ($mil)4158.114175.24
Total Debt ($mil)1829.972046.73
Equity ($mil)1068.36854.73


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin36.9838.62
EBITDA Margin12.0213.27
Operating Margin9.3810.68
Sales Turnover1.011.02
Return on Assets8.28.33
Return on Equity31.9540.71
Debt Q1 FY17 Q1 FY16
Current Ratio1.271.23
Debt/Capital0.630.71
Interest Expense22.5422.42
Interest Coverage3.784.22


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)79.4679.01
Div / share0.370.33
EPS0.50.65
Book value / share13.4510.82
Institutional Own % n/a n/a
Avg Daily Volume623677.0543258.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 40.70 for the Chemicals industry and a value on par with the S&P 500 average of 24.92. For additional comparison, its price-to-book ratio of 8.35 indicates a significant premium versus the S&P 500 average of 2.99 and a significant premium versus the industry average of 6.15. 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 26.75 Peers 40.70   VAL 20.05 Peers 15.31

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

VAL 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.

VAL 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
VAL 22.57 Peers 20.77   VAL 8.33 Peers 1.31

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

VAL is trading at a premium to 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 8.35 Peers 6.15   VAL -1.18 Peers 4.17

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 2.12 Peers 2.39   VAL -1.21 Peers -0.96

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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