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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Avery Dennison Corporation (XNYS:AVY) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
AVY
Name:
AVERY DENNISON CORPORATION (XNYS:AVY)
Sector:
70.90M
Industry:
Business Equipment & Supplies
CEO:
Mr. Mitchell Butier
Total Employees:
36,000
Our Technological Advancement Rating
Our Rating:
-
-
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF AVERY DENNISON CORPORATION(AVY) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND BUSINESS EQUIPMENT & SUPPLIES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
184.73
One Month Price Target:
$185.74
Six Month Price Target :
$190.79
Likely Price in One Year's Time:
Ticker:
$196.84
Likely Trading Range Today Under (Normal Volatility)
$184.15
Price Upper limit ($) :
$185.6
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$176.1
This week:
$165.43
This month :
$146.14
Other Primary facts
Market Cap:
15.07B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
81.26M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
22.87%
-13.27%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$224.75
$206.23
$144.71
$163.23
Medium risk (<10%) entry points
Buy Call
Sell Call
$200.20
Buy Put:
Sell Put:
$196.25
$169.21
$173.21
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
AVY
Sharpe Ratio:
3.01%
Comparison:
AVY, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 0.00% lower than the industry
& ratio is 31.89% higher than the market/S&P 500 average
Average Returns/Yield of
AVY
Daily returns:
0.08%
Weekly returns:
0.39%
Monthly returns:
1.57%
Yearly returns:
18.81%
Comparison of returns:
Average annual returns/yield (last 3 years) is 0.00% below industry average
Classification:
AVY, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.4
Statistical test of Returns:
AVY has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.31%
Weekly Volatility:
5.17%
Monthly Volatility:
10.34%
Yearly Volatility:
35.83%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.84%
Volatility in last five trading days has been -63.79% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.67%
Weekly VaR:
-10.45%
Monthly VaR:
-20.89%
How Much Can the price of
AVY
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-18%
Worst case (decline):
-72.37%
This translates to price declining to:
$152.26
This translates to price declining to:
$51.04
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
AVY is a 47.45% riskier investment compared to the market/S&P 500 & is 26.32% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 0.00% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
AVY
Beta in relation to market/S&P 500--0.98
Expected beta in 1 year's time:
0.672
Expected beta in 3 year's time:
0.95
Unlevered (debt free) Beta:
0.474
Beta in relation to Nasdaq (XNAS):
0.743
Beta in relation to all global stocks::
0.751
Beta Comparison & Analysis
Beta of competitors/peers::
1.281
Beta is -23.79% lower than peers
Average Industry Beta:
0.976
Beta is 0.00% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
29.67%
Sustainable growth rate is 0.00% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.090
Alpha is 0.00% below industry average alpha yield
Alpha is 571% higher than market/& is unsustainably high
Analysis of Cost of Capital of
AVY
Equity cost of capital:
0.098
Equity cost of capital is 0.00% below industry mean WACC
Unlevered (without debt) cost of capital:
4.78%
Before-tax cost of debt:
2.25%
After-tax cost of debt:
1.78%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.78%
WACC is 0.00% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$107.15
Revenue growth rate per share of (3Y):
7.77
FALSE
EPS:
$8.73
Expected Annual growth rate of EPS (3Y):
34.34%
Expected future EPS growth rate is 0.00% lower than the Business Equipment & Supplies industry
Free cash flow (FCF) per share:
$7.93
Balance sheet equity growth per share: 28.44%
Equity growth rate per share is 0.00% lower than the industry
Debt per share
$34.14
EBITDA per share
$16.32
Valuation Analysis Today of
AVY
P/E Ratio:
20.19
P/E Ratio of Competitors/Peers:
24.29
P/E ratio is -16.86% lower than main peers & is 3.56% higher than the industry
Stock price/value with industry average P/E ratio: $170.21
AVY is 8.53% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $58.25
Present value of the expected future dividends only: $40.10
P/S (Price to Sales ratio):
1.72
Price to sales ratio is 0.47% above the industry mean
P/B (Price to book value ratio):
7.77
Price to free cash flow: 23.30
-
Net income growth rate (3Y):
61.34%
Net income growth rate is 0.00% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 7.71%
Dividend yeild: 1.51%
Previous Dividend: $0.75
Previous adjusted dividend: $0.75
Previous Dividend: $2.79
Expected next dividend best case: $0.80
Expected next dividend worst case: $0.70
Average dividend payment (long-term): $0.64
Average dividend increase/decrease (growth rate) % per period: 2.69%
Expected next dividend payment date: 13/09/2022
Expected next dividend record date: 30/08/2022
-
Previous dividend payment date: 15/06/2022
Previous dividend record date: 06/01/2022
-
Dividend History:
2022-05-31--$0.75
2021-11-30--$0.68
2021-06-01--$0.68
2022-03-01--$0.68
2021-08-31--$0.68
2021-03-02--$0.62
Dividend growth rate is -77.76% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
143.53%
Net debt to equity ratio:
161.53%
Debt to assets ratio:
34.08%
Net debt to assets ratio:
38.35%
Debt-to-asset ratio is -55.07% below industry average
Ability to repay debt:
Interest coverage ratio:
18.02
Interest coverage ratio is 18.84% more than industry average
Looking forward:
Debt growth rate:
46.67%
Annual debt growth is 0% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.07%
Analysis of Key Statistics
Correlation of price movement with the market:
0.714
Statistical significance of correlation:
AVY has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.714
Stock price is 0.00% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.714
Correlation of price movement with Nasdaq (^IXIC):
0.014
Covariance of price movement with the market:
0.019
Kurtosis
16.706
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
0.955
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
AVY
Gross Profit Margin Ratio:
108%
Operating Profit Margin Ratio:
12.24%
Operating profit margin is 39.09% higher than the industry
Net Profit Margin Ratio:
108%
Effective Tax Rate:
26.37%
Effective tax rate is 5.31% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
37.71%
Return on equity (ROE) is -10.71% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
8.95%
Return on assets (ROA) is -3.55% lower than the industry
Financial Leverage:
1.5x
Current Ratio:
1.06
Current ratio is -0.97% below industry average
Cash Conversion Cycle (days):
-2.5
Cash conversion cycle is -103.27% below industry average
The remaining useful life of property plant & equipment is: 11.6 years
Stock based compensation to net income ratio:
1.52%
In-depth Efficiency Analysis
Revenue generated per employee:
241.8K
Each employee generates 0% less revenue than industry average revenue per employee
EBITDA generated per employee:
36.8K
Each employee generates 0% less EBITDA than industry average revenue per employee
Profit generated per employee:
20.2K
Each employee generates 0% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
2.0K
Each employee generates 0% less free cash flow than industry average revenue per employee
Assets/Capital per employee
145.7K
Each employee generates 0% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
AVY
JACOBS SOLUTIONS INC. (XNYS:J)
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION (XNYS:WAB)
IDEX CORPORATION (XNYS:IEX)
KSU-P
AerCap Holdings NV (XNYS:AER)
China Southern Airlines Company Limited (XNYS:ZNH)
HEI-A
HEICO CORPORATION (XNYS:HEI)
MASCO CORPORATION (XNYS:MAS)
Current Analyst Ratings
Strong buy�13%
Buy�8%
Hold�17%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
8.71B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
6.35B
2.36B
-
-
1.29B
-
-
1.29B
-
73.60M
261.70M
1.33B
1.07B
728.80M
993.40M
262.00M
728.80M
Statement of Cash Flow
Date:
Period:
72.00M
Differed Income Tax :
1.90M
Stock Based Compensation :
11.10M
Change in Working Capital :
- 179600.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
22.60M
Net Cash Provided by Operating Activities:
126.20M
Investments in PP&E:
- 49700.00K
Net Acquisitions:
- 33400.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
147.10M
-
147.10M
1.55B
960.90M
234.90M
2.89B
1.48B
1.89B
910.80M
-
128.80M
837.40M
5.24B
-
8.14B
1.37B
494.90M
-
-
855.80M
2.72B
2.77B
465.00M
3.48B
-
6.21B
124.10M
4.02B
- 260000.0K
- 1954800.00K
March 31, 2022 at 6:00:00 AM
7.64B
1.93B
8.14B
-
3.27B
3.1B
-
- 3500.00K
- 86600.00K
- 1900.00K
-
- 151500.00K
- 56200.00K
154.50M
- 55100.00K
- 100.00K
- 15600.00K
147.10M
162.70M
126.20M
- 55300.00K
70.90M
Our Proprietary Portfolio Rating
Our Rating:
-
Price Forecast/Expected Price in Next 5 Years of
AVY
2023
2024
2025
2026
2027
$253.44
$270.06
$287.77
$306.64
$326.75