Avery Dennison Corporation
Avery Dennison Corporation Fundamental Analysis
Avery Dennison Corporation (AVY) shows moderate financial fundamentals with a PE ratio of 19.29, profit margin of 7.77%, and ROE of 31.18%. The company generates $8.8B in annual revenue with moderate year-over-year growth of 4.68%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 53.3/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze AVY's fundamental strength across five key dimensions:
Efficiency Score
WeakAVY struggles to generate sufficient returns from assets.
Valuation Score
ExcellentAVY trades at attractive valuation levels.
Growth Score
ModerateAVY shows steady but slowing expansion.
Financial Health Score
ModerateAVY shows balanced financial health with some risks.
Profitability Score
ModerateAVY maintains healthy but balanced margins.
Key Financial Metrics
Is AVY Expensive or Cheap?
P/E Ratio
AVY trades at 19.29 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, AVY's PEG of -56.76 indicates potential undervaluation.
Price to Book
The market values Avery Dennison Corporation at 5.92 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 7.40 times EBITDA. This is generally considered low.
How Well Does AVY Make Money?
Net Profit Margin
For every $100 in sales, Avery Dennison Corporation keeps $7.77 as profit after all expenses.
Operating Margin
Core operations generate 12.47 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $31.18 in profit for every $100 of shareholder equity.
ROA
Avery Dennison Corporation generates $7.82 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Avery Dennison Corporation generates limited operating cash flow of $875.45M, signaling weaker underlying cash strength.
Free Cash Flow
Avery Dennison Corporation produces free cash flow of $707.59M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $9.20 in free cash annually.
FCF Yield
AVY converts 5.41% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
19.29
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-56.76
vs 25 benchmark
P/B Ratio
Price to book value ratio
5.92
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.49
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.66
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.13
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.31
vs 25 benchmark
ROA
Return on assets percentage
0.08
vs 25 benchmark
ROCE
Return on capital employed
0.18
vs 25 benchmark
How AVY Stacks Against Its Sector Peers
| Metric | AVY Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 19.29 | 25.96 | Better (Cheaper) |
| ROE | 31.18% | 1263.00% | Weak |
| Net Margin | 7.77% | -41827.00% (disorted) | Weak |
| Debt/Equity | 1.66 | 0.79 | Weak (High Leverage) |
| Current Ratio | 1.13 | 10.05 | Neutral |
| ROA | 7.82% | -1497918.00% (disorted) | Weak |
AVY outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Avery Dennison Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
29.39%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
142.58%
Industry Style: Cyclical, Value, Infrastructure
High GrowthFCF CAGR
31.39%
Industry Style: Cyclical, Value, Infrastructure
High Growth