NYSE:PH

Stock Analysis Report

Executive Summary

Parker-Hannifin Corporation manufactures and sells motion and control technologies and systems for various mobile, industrial, and aerospace markets worldwide.


Snowflake Analysis

Established dividend payer with moderate growth potential.


Similar Companies

Share Price & News

How has Parker-Hannifin's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PH has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-8.2%

PH

-5.6%

US Machinery

-7.4%

US Market


1 Year Return

9.5%

PH

2.8%

US Machinery

10.5%

US Market

Return vs Industry: PH exceeded the US Machinery industry which returned 2.8% over the past year.

Return vs Market: PH matched the US Market which returned 10.5% over the past year.


Shareholder returns

PHIndustryMarket
7 Day-8.2%-5.6%-7.4%
30 Day0.2%-3.5%-3.6%
90 Day-2.7%-5.4%-0.6%
1 Year11.7%9.5%4.7%2.8%12.8%10.5%
3 Year29.4%22.7%27.5%19.4%37.4%28.6%
5 Year76.3%60.1%55.7%37.3%61.3%43.6%

Price Volatility Vs. Market

How volatile is Parker-Hannifin's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Parker-Hannifin undervalued compared to its fair value and its price relative to the market?

7.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PH ($194.48) is trading below our estimate of fair value ($211.27)

Significantly Below Fair Value: PH is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: PH is good value based on its PE Ratio (18.3x) compared to the Machinery industry average (21x).

PE vs Market: PH is poor value based on its PE Ratio (18.3x) compared to the US market (17.2x).


Price to Earnings Growth Ratio

PEG Ratio: PH is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: PH is overvalued based on its PB Ratio (3.9x) compared to the US Machinery industry average (2.1x).


Next Steps

Future Growth

How is Parker-Hannifin forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?

14.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PH's forecast earnings growth (14.1% per year) is above the savings rate (1.7%).

Earnings vs Market: PH's earnings (14.1% per year) are forecast to grow faster than the US market (13.2% per year).

High Growth Earnings: PH's earnings are forecast to grow, but not significantly.

Revenue vs Market: PH's revenue (5% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: PH's revenue (5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PH's Return on Equity is forecast to be high in 3 years time (20.9%)


Next Steps

Past Performance

How has Parker-Hannifin performed over the past 5 years?

10.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PH has high quality earnings.

Growing Profit Margin: PH's current net profit margins (9.6%) are lower than last year (9.7%).


Past Earnings Growth Analysis

Earnings Trend: PH's earnings have grown by 10% per year over the past 5 years.

Accelerating Growth: PH's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: PH had negative earnings growth (-2.7%) over the past year, making it difficult to compare to the Machinery industry average (0.9%).


Return on Equity

High ROE: Whilst PH's Return on Equity (21.58%) is high, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is Parker-Hannifin's financial position?


Financial Position Analysis

Short Term Liabilities: PH's short term assets ($5.7B) exceed its short term liabilities ($4.1B).

Long Term Liabilities: PH's short term assets ($5.7B) do not cover its long term liabilities ($10.6B).


Debt to Equity History and Analysis

Debt Level: PH's debt to equity ratio (153.7%) is considered high.

Reducing Debt: PH's debt to equity ratio has increased from 51.7% to 153.7% over the past 5 years.

Debt Coverage: PH's debt is well covered by operating cash flow (20.7%).

Interest Coverage: PH's interest payments on its debt are well covered by EBIT (9.6x coverage).


Balance Sheet

Inventory Level: PH has a high level of physical assets or inventory.

Debt Coverage by Assets: PH's debt is not covered by short term assets (assets are 0.6x debt).


Next Steps

Dividend

What is Parker-Hannifin's current dividend yield, its reliability and sustainability?

1.81%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: PH's dividend (1.81%) is higher than the bottom 25% of dividend payers in the US market (1.52%).

High Dividend: PH's dividend (1.81%) is low compared to the top 25% of dividend payers in the US market (3.9%).


Stability and Growth of Payments

Stable Dividend: PH's dividends per share have been stable in the past 10 years.

Growing Dividend: PH's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (31.9%), PH's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: PH's dividends in 3 years are forecast to be well covered by earnings (27.4% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.0yrs

Average management tenure


CEO

Thomas Williams (60yo)

5yrs

Tenure

US$17,472,500

Compensation

Mr. Thomas L. Williams, also known as Tom, has been Chief Executive Officer, President and Director of CLARCOR Inc. since February 28, 2017. Mr. Williams has been the Chief Executive Officer of Parker-Hann ...


CEO Compensation Analysis

Compensation vs Market: Thomas's total compensation ($USD17.47M) is above average for companies of similar size in the US market ($USD10.82M).

Compensation vs Earnings: Thomas's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Thomas Williams
Chairman & CEO5yrsUS$17.47m0.10% $26.9m
Lee Banks
President5.1yrsUS$11.77m0.082% $21.4m
Catherine Suever
Executive VP of Finance & Administration and CFO2.8yrsUS$6.91m0.021% $5.5m
Robert Malone
VP & President of Filtration Group5.2yrsUS$4.07m0.017% $4.5m
Jennifer Parmentier
VP & President of Motion Systems Group0yrsUS$3.77m0.0097% $2.5m
Robin Davenport
Vice President of Corporate Finance5.3yrsno datano data
M. Maxwell
VP and Chief Technology & Innovation Officer0yrsno data0.021% $5.4m
Dinu Parel
VP & Chief Information Officer1.3yrsno data0.00062% $161.6k
Joseph Leonti
VP, General Counsel & Secretary5.6yrsUS$2.90m0.014% $3.6m
Michael O'Hara
Vice President of Global Sales & Marketing2.3yrsno datano data

5.0yrs

Average Tenure

56yo

Average Age

Experienced Management: PH's management team is seasoned and experienced (5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Thomas Williams
Chairman & CEO5yrsUS$17.47m0.10% $26.9m
Lee Banks
President5.1yrsUS$11.77m0.082% $21.4m
Candy Obourn
Independent Director18.1yrsUS$296.30k0.0076% $2.0m
Robert Bohn
Independent Director9.5yrsUS$270.97k0.0080% $2.1m
Joseph Scaminace
Independent Director15.3yrsUS$280.97k0.0087% $2.3m
James Wainscott
Lead Director0yrsUS$336.30k0.0094% $2.5m
Linda Harty
Independent Director13.1yrsUS$297.30k0.0099% $2.6m
Åke Svensson
Independent Director9.5yrsUS$272.97k0.0059% $1.5m
James Verrier
Independent Director3.8yrsUS$272.98k0.0022% $560.5k
Kevin Lobo
Independent Director6.5yrsUS$277.97k0.0051% $1.3m

9.5yrs

Average Tenure

61.5yo

Average Age

Experienced Board: PH's board of directors are considered experienced (9.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: PH insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Parker-Hannifin Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Parker-Hannifin Corporation
  • Ticker: PH
  • Exchange: NYSE
  • Founded: 1917
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Market Cap: US$26.072b
  • Shares outstanding: 128.36m
  • Website: https://www.parker.com

Number of Employees


Location

  • Parker-Hannifin Corporation
  • 6035 Parkland Boulevard
  • Cleveland
  • Ohio
  • 44124
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PHNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
PARDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
0KFZLSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
PH *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
PARETLX (Eurotlx)YesCommon StockITEURJan 1968
P1HC34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 4 REPR 1 COMBRBRLJan 2020

Biography

Parker-Hannifin Corporation manufactures and sells motion and control technologies and systems for various mobile, industrial, and aerospace markets worldwide. It operates in two segments, Diversified Industrial and Aerospace Systems. The Diversified Industrial segment offers static and dynamic sealing devices; filters, systems, and diagnostics solutions to monitor and remove contaminants from fuel, air, oil, water, and other liquids and gases; connectors, which control, transmit, and contain fluid; control solutions for extreme corrosion resistance, temperatures, pressures, and precise flow; and hydraulic, pneumatic, and electromechanical components and systems for builders and users of mobile and industrial machinery and equipment. This segment sells its products to original equipment manufacturers (OEMs) and distributors who serve the replacement markets in manufacturing, packaging, processing, transportation, mobile construction, refrigeration and air conditioning, agricultural, and military machinery and equipment industries. The Aerospace Systems segment offers products for use in commercial and military airframe and engine programs, such as control actuation systems and components, engine systems and components, fluid conveyance systems and components, fuel systems and components, fuel tank inerting systems, hydraulic systems and components, lubrication components, pneumatic control components, power conditioning and management systems, thermal management products, and wheels and brakes, as well as fluid metering, delivery, and atomization devices. This segment markets its products directly to OEMs and end users. The company markets its products through direct-sales employees, independent distributors, and sales representatives. Parker-Hannifin Corporation was founded in 1917 and is headquartered in Cleveland, Ohio. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/26 00:21
End of Day Share Price2020/02/25 00:00
Earnings2019/12/31
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.