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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Parker-Hannifin Corporation (XNYS:PH) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
PH
Name:
PARKER-HANNIFIN CORPORATION (XNYS:PH)
Sector:
376.16M
Industry:
Specialty Industrial Machinery
CEO:
Mr. Thomas Williams
Total Employees:
55,090
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -8.00% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF PARKER-HANNIFIN CORPORATION(PH) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SPECIALTY INDUSTRIAL MACHINERY INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
264.87
One Month Price Target:
$267.19
Six Month Price Target :
$278.8
Likely Price in One Year's Time:
Ticker:
$292.72
Likely Trading Range Today Under (Normal Volatility)
$263.86
Price Upper limit ($) :
$266.27
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$250.48
This week:
$232.69
This month :
$200.51
Other Primary facts
Market Cap:
34.24B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
128.40M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
18.42%
-16.69%
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:
$331.63
$300.85
$198.11
$228.89
Medium risk (<10%) entry points
Buy Call
Sell Call
$290.83
Buy Put:
Sell Put:
$284.26
$238.83
$245.48
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
PH
Sharpe Ratio:
2.37%
Comparison:
PH, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 25.20% higher than the industry
& ratio is 4.07% higher than the market/S&P 500 average
Average Returns/Yield of
PH
Daily returns:
0.07%
Weekly returns:
0.36%
Monthly returns:
1.45%
Yearly returns:
16.25%
Comparison of returns:
Average annual returns/yield (last 3 years) is 7.00% above industry average
Classification:
PH, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.87
Statistical test of Returns:
PH has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.68%
Weekly Volatility:
5.99%
Monthly Volatility:
11.99%
Yearly Volatility:
41.53%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.22%
Volatility in last five trading days has been -54.66% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.43%
Weekly VaR:
-12.15%
Monthly VaR:
-24.30%
How Much Can the price of
PH
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-21%
Worst case (decline):
-84.17%
This translates to price declining to:
$210.16
This translates to price declining to:
$41.92
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
PH is a 71.50% riskier investment compared to the market/S&P 500 & is 46.92% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -2.01% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
PH
Beta in relation to market/S&P 500--1.56
Expected beta in 1 year's time:
0.818
Expected beta in 3 year's time:
1.157
Unlevered (debt free) Beta:
0.99
Beta in relation to Nasdaq (XNAS):
0.966
Beta in relation to all global stocks::
1.047
Beta Comparison & Analysis
Beta of competitors/peers::
1.064
Beta is 47.08% higher than peers
Average Industry Beta:
1.281
Beta is 22.10% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
15.57%
Sustainable growth rate is 4.57% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.035
Alpha is -18.58% below industry average alpha yield
Alpha is 224% higher than market/& is unsustainably high
Analysis of Cost of Capital of
PH
Equity cost of capital:
0.139
Equity cost of capital is 16.27% above industry mean WACC
Unlevered (without debt) cost of capital:
8.78%
Before-tax cost of debt:
3.72%
After-tax cost of debt:
2.94%
Overall debt rating:
Upper medium A grade (third highest grade),CO8<=0.0429,"Medium BBB grade (Fourth highest grade)
Weighted average cost of capital (WACC):
2.94%
WACC is -73.33% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$121.75
Revenue growth rate per share of (3Y):
4
Annual revenue growth rate is -83.22% below industry average
EPS:
$12.93
Expected Annual growth rate of EPS (3Y):
6.46%
Expected future EPS growth rate is 111.68% higher than the Specialty Industrial Machinery industry
Free cash flow (FCF) per share:
$15.46
Balance sheet equity growth per share: 34.12%
Equity growth rate per share is 216.10% higher than the industry
Debt per share
$48.78
EBITDA per share
$23.18
Valuation Analysis Today of
PH
P/E Ratio:
26.28
P/E Ratio of Competitors/Peers:
24.23
P/E ratio is 8.49% higher than main peers & is -4.47% lower than the industry
Stock price/value with industry average P/E ratio: $355.76
PH is -25.55% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $62.36
Present value of the expected future dividends only: $50.00
P/S (Price to Sales ratio):
2.18
Price to sales ratio is -47.57% below the industry mean
P/B (Price to book value ratio):
4
Price to free cash flow: 17.14
Price to free cash flow ratio is -31.06% lower than the industry
Net income growth rate (3Y):
69.71%
Net income growth rate is 5079.16% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 7.85%
Dividend yeild: 1.67%
Previous Dividend: $1.33
Previous adjusted dividend: $1.33
Previous Dividend: $4.42
Expected next dividend best case: $1.45
Expected next dividend worst case: $1.21
Average dividend payment (long-term): $0.98
Average dividend increase/decrease (growth rate) % per period: 4.62%
Expected next dividend payment date: 09/01/2022
Expected next dividend record date: 08/11/2022
Expected next dividend declaration date: 27/07/2022
Previous dividend payment date: 06/03/2022
Previous dividend record date: 13/05/2022
Previous dividend declaration date: 28/04/2022
Dividend History:
2022-05-12--$1.33
2021-11-10--$1.03
2021-05-06--$1.03
2022-02-10--$1.03
2021-08-26--$1.03
2021-02-09--$0.88
Dividend growth rate is 32.49% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
73.77%
Net debt to equity ratio:
71.70%
Debt to assets ratio:
30.95%
Net debt to assets ratio:
30.08%
Debt-to-asset ratio is -42.63% below industry average
Ability to repay debt:
Interest coverage ratio:
12.19
Interest coverage ratio is -37.56% less than industry average
Looking forward:
Debt growth rate:
-22.18%
Annual debt growth is -130% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.01%
Analysis of Key Statistics
Correlation of price movement with the market:
0.792
Statistical significance of correlation:
PH has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.635
Stock price is 24.64% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.635
Correlation of price movement with Nasdaq (^IXIC):
0.007
Covariance of price movement with the market:
0.011
Kurtosis
9.534
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.115
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
PH
Gross Profit Margin Ratio:
112%
Operating Profit Margin Ratio:
17.78%
Operating profit margin is -173.44% lower than the industry
Net Profit Margin Ratio:
112%
Effective Tax Rate:
21.39%
Effective tax rate is 14.46% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
19.93%
Return on equity (ROE) is 493.25% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
8.36%
Return on assets (ROA) is 78.20% higher than the industry
Financial Leverage:
1.4x
Current Ratio:
1.72
Current ratio is -43.22% below industry average
Cash Conversion Cycle (days):
22.2
Cash conversion cycle is -63.91% below industry average
The remaining useful life of property plant & equipment is: 4.7 years
Stock based compensation to net income ratio:
3.41%
In-depth Efficiency Analysis
Revenue generated per employee:
283.8K
Each employee generates -93% less revenue than industry average revenue per employee
EBITDA generated per employee:
54.0K
Each employee generates -93% less EBITDA than industry average revenue per employee
Profit generated per employee:
30.7K
Each employee generates -92% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
6.8K
Each employee generates -87% less free cash flow than industry average revenue per employee
Assets/Capital per employee
265.1K
Each employee generates -87% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
PH
REPUBLIC SERVICES, INC. (XNYS:RSG)
L3HARRIS TECHNOLOGIES, INC. (XNYS:LHX)
Enbridge Inc. (XNYS:ENBA)
FERGUSON PLC (XNYS:FERG)
CARRIER GLOBAL CORPORATION (XNYS:CARR)
Trane Technologies plc (XNYS:TT)
ROCKWELL AUTOMATION, INC. (XNYS:ROK)
TRANSDIGM GROUP INCORPORATED (XNYS:TDG)
OTIS WORLDWIDE CORPORATION (XNYS:OTIS)
Current Analyst Ratings
Strong buy�25%
Buy�29%
Hold�29%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
15.63B
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:
11.24B
4.39B
-
42.59M
1.61B
-
-
1.61B
2.00M
244.24M
578.90M
2.98B
2.78B
1.69B
2.15B
460.66M
1.69B
Statement of Cash Flow
Date:
Period:
145.52M
Differed Income Tax :
- 40027.00K
Stock Based Compensation :
57.67M
Change in Working Capital :
- 224192.00K
Accounts Receivables:
74.07M
Other Working Capital:
- 15651.00K
Other Non-Cash Items:
34.23M
Net Cash Provided by Operating Activities:
424.36M
Investments in PP&E:
- 30.00K
Net Acquisitions:
-
Purchases of Investments:
- 7456.00K
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):
9/30/21
2022
Q1
478.58M
40.16M
518.74M
2.43B
2.26B
422.59M
5.63B
2.22B
8.01B
3.43B
800.21M
145.97M
-
14.61B
-
20.24B
1.64B
302.31M
279.17M
-
1.34B
3.28B
6.26B
1.62B
8.45B
-
11.73B
90.52M
15.23B
- 1605490.0K
- 5228051.00K
September 30, 2021 at 6:00:00 AM
12.85B
8.49B
20.22B
840.37M
6.57B
6.1B
5.31M
- 39773.00K
- 41947.00K
- 596.00K
-
- 245820.00K
- 132921.00K
- 41613.00K
- 420950.00K
- 997.00K
- 39535.00K
693.58M
733.12M
424.36M
- 48203.00K
376.16M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
PH
2023
2024
2025
2026
2027
$356.77
$394.28
$435.74
$481.56
$532.19