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As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of Avery Dennison Corporation (NYSE:AVY), it is a company with robust financial health as well as a excellent growth outlook. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Avery Dennison here.
Reasonable growth potential with adequate balance sheet
One reason why investors are attracted to AVY is its earnings growth potential in the near future of 44% underlying the notable 52% return on equity over the next few years leading up to 2022. AVY is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. AVY appears to have made good use of debt, producing operating cash levels of 0.23x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
Next Steps:
For Avery Dennison, I’ve put together three fundamental factors you should look at:
- Historical Performance: What has AVY’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Valuation: What is AVY worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether AVY is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of AVY? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.