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Fundamental analysis: Avery Dennison Corporation (AVY)

Awarener score: 6.9

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Good), the business stability (Very good) and growth (Modest), and the company's inclination to return cash to the stockholders (Very good).

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: 6.5

  • Business growth has been almost stagnant. It's been almost average when measured against peer companies.
  • Avery Dennison Corporation business trend stability is very good. The higher the stability, the lower the risk. It looks top-notch against rivals.

Margins score: 6.5

  • AVY profit margins -on goods and services sold- are usually hardly sufficient. They stand somewhat worse than rival companies.
  • Business profit on sales tends to be very good. It's similar 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 sufficient in relation to total revenues. They're still slightly worse than similar companies.
  • Profits -before income taxes- are usually good considering total sales, and remain similar to rivals.
  • Total net profit tends to be good when confronted to sales. Company stands almost average when measured against comparable firms.

Growth score: 7.1

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

Miscellaneous score: 8.7

  • AVY had to pay sparse income taxes in relation to profits made in the past years. It's been slightly better than peers.
  • Research and development expenses hardly consume a portion of revenues. It's below average when measured against competitors.
  • The company shows excellent business growth in relation to research and development efforts. It stands in a very weak position compared to rival companies.

Profitability score: 9.5

  • 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 huge proceeds -on the resources directly invested in the business-. They remain excellent in relation to similar companies.
  • Profitability -in relation to owned resources- is usually paramount. It ranks great 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 great when measured against comparable enterprises.

Usage of Funds score: 6.5

  • AVY usually uses a large portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is large. It stands great when measured against rival firms.
  • The company is usually somewhat investing in new property, plant, and equipment, to improve its operating capabilities, which is more than average in relation to industry peers.
  • In the past twelve months it paid some dividends, considering the current stock price. It came mediocre against competitors.
  • Has increased dividend payments in the past years. Business prospects may have improved. The company has behaved close to average when compared to similar firms.
  • The company usually uses some portion of genuine funds generated to pay dividends. Dividend payments should be safe, unless business prospects take a nosedive. Sustainability looks slightly better than comparable companies.
  • The company usually reduces the pool of investors, resulting in fewer mouths feeding on the pie of profits. It remains excellent in relation to peer enterprises.
  • Repurchase effectiveness metric is very complex. Run again in analytical mode if you 're interested in a technical explanation. It stands excellent in relation 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 weak when measured against competitors.

Balance Sheet score: 4.9

  • 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 substantially worse when measured against peer companies.
  • The company has somewhat lower short-term resources than short-term obligations. Unless it's part of the business model, there might some liquidity concerns. It turns to be lacking 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 slightly worse than rival firms.
  • Controlled resources take time to be turned into cash and equivalents, which is somewhat risky. It looks similar to rivals.
  • For every dollar of short-term obligations, the company has less than a dollar of cash and short-term receivables. It's lacking compared to peer firms.
  • For every dollar of short-term obligations, the company has extremely few cents of cash and equivalents, which is worse than most similar enterprises.
  • Usually, sales are on slightly higher than 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 lacking compared to similar companies.
  • Net interest expenses consume a minor portion of usual business earnings, and are easily bearable. It stands slightly worse than rival firms.
  • Business earnings have usually been reasonable when measured against loans taken. Cutting back reinvesting in the business, it could take more than five years to repay the obligations with current profitability. It ranks similar to comparable enterprises.
  • Revenues are quite good 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 a slight improvement compared to similar firms.
  • Resource exploitation is excellent when yearly sales are considered. This metric is normally tied to the industry where the firm belongs. It's still better than most peer companies.

Valuation score: 5.6

  • 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 good 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 slightly 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 better 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 almost 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 lacking 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 more than average in relation to 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 rather normal in relation to peer companies.

Total score: 6.9


AVY logos

Company at a glance: Avery Dennison Corporation (AVY)

Sector, industry: Industrials, Business Equipment & Supplies

Market Cap: 13.46 billions

Revenues TTM: 8.95 billions

Avery Dennison Corporation manufactures and markets pressure-sensitive materials and products in the United States, Europe, Asia, Latin America, and internationally. The company's Label and Graphic Materials segment offers pressure-sensitive label and packaging materials under the Fasson, JAC, and Avery Dennison brands; graphics products under the Avery Dennison and Mactac brands; and reflective products under the Avery Dennison brand. This segment provides its products to the home and personal care, beer and beverage, durables, pharmaceutical, wine and spirits, and food market segments; architectural, commercial sign, digital printing, and other related market segments; construction, automotive, and fleet transportation market segments; traffic and safety applications; and sign shops, commercial printers, and designers. The company's Retail Branding and Information Solutions segment offers brand embellishments, graphic tickets, tags and labels, and sustainable packaging solutions, as well as creative services; radio-frequency identification, visibility and loss prevention, brand protection and security, shelf-edge, and price ticketing and marking solutions; and care, content, and country of origin compliance solutions. It serves retailers, brand owners, apparel manufacturers, distributors, and industrial customers. The company's Industrial and Healthcare Materials segment provides tapes and other pressure-sensitive adhesive-based materials and converted products, mechanical fasteners, and performance polymers under the Fasson and Avery Dennison brands; and tapes under the Yongle brand for wire harnessing and cable wrapping. It serves automotive, electronics, building and construction, electrical, general industrial, personal care, and medical markets. The company was formerly known as Avery International Corporation and changed its name to Avery Dennison Corporation in 1990. Avery Dennison Corporation was founded in 1935 and is headquartered in Mentor, Ohio.

Awarener score: 6.9

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Good), the business stability (Very good) and growth (Modest), and the company's inclination to return cash to the stockholders (Very good).