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Fundamental analysis: Avery Dennison Corporation (AVY)

Awarener score: 6.5

Conclusion

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 6.0

• Business has been slightly shrinking. It's been similar to peer companies.
• Avery Dennison Corporation business trend stability is very good. The higher the stability, the lower the risk. It looks better than most rivals.

Margins score: 6.3

• AVY profit margins -on goods and services sold- are usually meagre. They stand mediocre against rival companies.
• Business profit on sales tends to be good. It's encouraging in relation to competitors.
• Profits on sales made -available to repay debt and purchase properties- are usually sufficient. They remain lacking compared to peers.
• Earnings -before income taxes and interests on loans taken- tend to be good in relation to total revenues. They're still somewhat worse than similar companies.
• Profits -before income taxes- are usually good considering total sales, and remain almost average when measured against rivals.
• Total net profit tends to be good when confronted to sales. Company stands almost average when measured against comparable firms.

Growth score: 7.7

• Avery Dennison Corporation profit -on goods and services sold- has been growing at a very low pace. It's been close to average when compared to competitors.
• In recent years, earnings growth -on operations- have been almost stagnant, which has been somewhat worse than comparable firms.
• Profits -available to repay debt and purchase properties- have been growing at an excellent pace, which compares encouraging in relation to peer enterprises.
• Earnings -before income taxes and interests on loans taken- have been growing at an extremely fast tempo. It turns to be a slight improvement compared to similar stocks.
• In past years, profits -before income taxes- grew at an extremely fast speed. It was well ranked against rivals.
• In the previous years, growth trend on total net profit has been excellent, and similar to peer companies.
• Earnings per share have grown at an excellent rhythm in past years. It's been rather normal in relation to industry peers.

Miscellaneous score: 6.0

• AVY had to pay sparse income taxes in relation to profits made in the past years. It's been slightly better than peers.
• The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
• We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 9.2

• Avery Dennison Corporation usually gets excellent returns on the resources it controls. It proves more than average in relation to peer firms.
• The company normally gets excellent proceeds -on the resources directly invested in the business-. They remain impressive in relation to similar companies.
• Profitability -in relation to owned resources- is usually paramount. It ranks top tier when measured against competitors.
• In the past, got excellent returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's encouraging in relation to comparable enterprises.

Usage of Funds score: 6.4

• AVY usually uses a significant portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is abundant. It stands encouraging in relation to rival firms.
• The company is usually somewhat investing in new property, plant, and equipment, to improve its operating capabilities, which is encouraging in relation to industry peers.
• In the past twelve months it paid run-of-the-mill dividends, considering the current stock price. It came mediocre against competitors.
• Has somewhat increased dividend payments in the past years. Business prospects may have improved. The company has behaved rather normal in relation to similar firms.
• Dividend payments usually represent a modest portion of genuine funds generation and shouldn't be at risk. Sustainability looks somewhat better than comparable companies.
• The company usually reduces the pool of investors, resulting in fewer mouths feeding on the pie of profits. It remains in good shape compared to peer enterprises.
• Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands in good shape compared to rivals.
• The company uses a significant portion of genuine fund generation to reward investors, which can probably be sustained for as long as business doesn't turn sour. It still looks almost average when measured against competitors.

Balance Sheet score: 5.1

• Avery Dennison Corporation intangible assets (like brands and goodwill) represent a very large portion of resources controlled, according to accounting books. There could be major difficulties in liquidating them if the company ever gets in financial distress. It happens to be weak when measured against peer companies.
• The company has somewhat more short-term resources than short-term obligations. Liquidity concerns might not be that important. It turns to be in a weak position compared to similar firms.
• A significant part of resources controlled were provided for with financial debt. Creditors have almost as many claims on the company as shareholders. It remains mediocre against rival firms.
• Controlled resources take time to be turned into cash and equivalents, which is somewhat risky. It looks almost average when measured against rivals.
• For every dollar of short-term obligations, the company has almost another of cash and short-term receivables. It's in a weak position compared to peer firms.
• For every dollar of short-term obligations, the company has very few cents of cash and equivalents, which is bottom tier against similar enterprises.
• Usually, sales are on a two-months credit. It still ranks weak when measured against peers.
• Normally has approximately somewhat more than two months of sales worth in inventory. It comes up as lacking compared to competitors.
• On average, it takes higher than four months from the purchase to charging customers. It happens to be somewhat worse than peers.
• On average pays suppliers approximately three months after the purchase. It ranks great when measured against industry peers.
• The company pays its suppliers roughly one month before charging its customers, so there's sparse money invested in working capital. It's close to average when compared to similar companies.
• Net interest expenses consume a minor portion of usual business earnings, and are easily bearable. It stands slightly better than rival firms.
• Business earnings have usually been quite good when measured against loans taken. Cutting back reinvesting in the business, it could take around three years to repay the obligations with current profitability. It ranks almost average when measured against comparable enterprises.
• Revenues are reasonable in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. The more property, plant, and equipment used, the more the company must reinvest to fight obsolescence, which usually means less available funds for the shareholders in the long run. It looks lacking compared to similar firms.
• Resource exploitation is very good when yearly sales are considered. This metric is normally tied to the industry where the firm belongs. It's still somewhat better than peer companies.

Valuation score: 5.5

• Avery Dennison Corporation looks somewhat expensive in relation to profits and financial position. It happens to be almost average when measured against competitors.
• Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains a disappointment compared to peers.
• In the past twelve months, the company generated some slightly better free funds in relation to the stock price, which stands slightly worse than similar companies.
• The company usually generates reasonably more than enough genuine funds to cover up for its business needs. Surplus cash may be used to repay loans, to eventually buy new businesses, or to reward investors. Considering the financial position and stock price, the current valuation might be fair. It's still below average when measured against industry firms.
• In the past twelve months, the company has barely rewarded investors, considering both dividends and share on the pie of earnings. It came up close to average when compared to peer ventures.
• The company is somewhat indebted, loan repayment needs to be taken into account. It looks slightly worse than similar enterprises.
• Considering the past twelve months, traditional Price-to-Earnings relation is somewhat high. Improvement expectations are already in the stock price, which presents some risks. It ranks below average when measured against peer companies.
• Comparing the current stock price with the past twelve-months revenues gives a roughly two to one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks in a very weak position compared to rival firms.
• The relation between the stock price and accounting book value is really high, which may be good or bad depending on context. Run again in analytic mode if you want to dig deeper. The company remains worse than most peer firms.
• In the past twelve months, the operating business earned some money when compared to the current stock price and financial position. It happens to be almost average when measured against industry peers.
• In an alternate metric of bang for the buck, the company has usually shown a good earnings power ability when measured against the current stock price and financial position. It's still close to average when compared to peer companies.

Total score: 6.5

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Awarener score: 6.5

Conclusion

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