Parker-Hannifin Corporation
Parker-Hannifin Corporation Fundamental Analysis
Parker-Hannifin Corporation (PH) shows moderate financial fundamentals with a PE ratio of 36.37, profit margin of 17.29%, and ROE of 25.65%. The company generates $20.5B in annual revenue with weak year-over-year growth of -0.40%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 66.6/100 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 PH's fundamental strength across five key dimensions:
Efficiency Score
ExcellentPH demonstrates superior asset utilization.
Valuation Score
ModeratePH shows balanced valuation metrics.
Growth Score
ModeratePH shows steady but slowing expansion.
Financial Health Score
ExcellentPH maintains a strong and stable balance sheet.
Profitability Score
ExcellentPH achieves industry-leading margins.
Key Financial Metrics
Is PH Expensive or Cheap?
P/E Ratio
PH trades at 36.37 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, PH's PEG of -15.24 indicates potential undervaluation.
Price to Book
The market values Parker-Hannifin Corporation at 8.99 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 21.72 times EBITDA. This signals the market has high growth expectations.
How Well Does PH Make Money?
Net Profit Margin
For every $100 in sales, Parker-Hannifin Corporation keeps $17.29 as profit after all expenses.
Operating Margin
Core operations generate 20.98 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $25.65 in profit for every $100 of shareholder equity.
ROA
Parker-Hannifin Corporation generates $11.59 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Parker-Hannifin Corporation produces operating cash flow of $3.74B, showing steady but balanced cash generation.
Free Cash Flow
Parker-Hannifin Corporation generates strong free cash flow of $3.34B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $26.46 in free cash annually.
FCF Yield
PH converts 2.60% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
36.37
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-15.24
vs 25 benchmark
P/B Ratio
Price to book value ratio
8.99
vs 25 benchmark
P/S Ratio
Price to sales ratio
6.29
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.69
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.18
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.26
vs 25 benchmark
ROA
Return on assets percentage
0.12
vs 25 benchmark
ROCE
Return on capital employed
0.18
vs 25 benchmark
How PH Stacks Against Its Sector Peers
| Metric | PH Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 36.37 | 26.76 | Worse (Expensive) |
| ROE | 25.65% | 1300.00% | Weak |
| Net Margin | 17.29% | -29570.00% (disorted) | Strong |
| Debt/Equity | 0.69 | 0.79 | Neutral |
| Current Ratio | 1.18 | 10.68 | Neutral |
| ROA | 11.59% | -1545134.00% (disorted) | Strong |
PH outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Parker-Hannifin Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
45.07%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
194.04%
Industry Style: Cyclical, Value, Infrastructure
High GrowthFCF CAGR
82.50%
Industry Style: Cyclical, Value, Infrastructure
High Growth