NYSE:AVY

Stock Analysis Report

Executive Summary

Avery Dennison Corporation produces and sells pressure-sensitive materials worldwide.


Snowflake Analysis

Reasonable growth potential with adequate balance sheet and pays a dividend.


Similar Companies

Share Price & News

How has Avery Dennison's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AVY's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

10.5%

AVY

9.6%

US Packaging

9.9%

US Market


1 Year Return

-11.2%

AVY

-16.4%

US Packaging

-11.9%

US Market

Return vs Industry: AVY exceeded the US Packaging industry which returned -16.4% over the past year.

Return vs Market: AVY matched the US Market which returned -11.5% over the past year.


Shareholder returns

AVYIndustryMarket
7 Day10.5%9.6%9.9%
30 Day-12.4%-12.3%-15.0%
90 Day-23.4%-22.4%-21.5%
1 Year-9.4%-11.2%-14.4%-16.4%-10.0%-11.9%
3 Year31.9%24.5%-3.6%-10.1%12.3%5.1%
5 Year109.8%89.3%5.9%-7.3%32.5%18.1%

Price Volatility Vs. Market

How volatile is Avery Dennison's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Avery Dennison undervalued compared to its fair value and its price relative to the market?

25.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AVY ($100.31) is trading below our estimate of fair value ($135.53)

Significantly Below Fair Value: AVY is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: AVY is poor value based on its PE Ratio (27.8x) compared to the Packaging industry average (14.9x).

PE vs Market: AVY is poor value based on its PE Ratio (27.8x) compared to the US market (13x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: AVY is overvalued based on its PB Ratio (6.9x) compared to the US Packaging industry average (2.4x).


Next Steps

Future Growth

How is Avery Dennison forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

21.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AVY's forecast earnings growth (21.6% per year) is above the savings rate (1.7%).

Earnings vs Market: AVY's earnings (21.6% per year) are forecast to grow faster than the US market (12.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: AVY's revenue (3.2% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: AVY's revenue (3.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AVY's Return on Equity is forecast to be high in 3 years time (35.9%)


Next Steps

Past Performance

How has Avery Dennison performed over the past 5 years?

1.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AVY has a large one-off loss of $494.7M impacting its December 28 2019 financial results.

Growing Profit Margin: AVY's current net profit margins (4.3%) are lower than last year (6.5%).


Past Earnings Growth Analysis

Earnings Trend: AVY's earnings have grown by 1.1% per year over the past 5 years.

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

Earnings vs Industry: AVY had negative earnings growth (-34.8%) over the past year, making it difficult to compare to the Packaging industry average (-5.6%).


Return on Equity

High ROE: Whilst AVY's Return on Equity (25.22%) is high, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is Avery Dennison's financial position?


Financial Position Analysis

Short Term Liabilities: AVY's short term assets ($2.3B) exceed its short term liabilities ($2.3B).

Long Term Liabilities: AVY's short term assets ($2.3B) exceed its long term liabilities ($2.0B).


Debt to Equity History and Analysis

Debt Level: AVY's debt to equity ratio (158.7%) is considered high.

Reducing Debt: AVY's debt to equity ratio has increased from 107.7% to 158.7% over the past 5 years.

Debt Coverage: AVY's debt is well covered by operating cash flow (39.1%).

Interest Coverage: AVY's interest payments on its debt are well covered by EBIT (10.8x coverage).


Balance Sheet

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

Debt Coverage by Assets: AVY's debt is covered by short term assets (assets are 1.2x debt).


Next Steps

Dividend

What is Avery Dennison's current dividend yield, its reliability and sustainability?

2.31%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: AVY's dividend (2.31%) is higher than the bottom 25% of dividend payers in the US market (1.98%).

High Dividend: AVY's dividend (2.31%) is low compared to the top 25% of dividend payers in the US market (5.45%).


Stability and Growth of Payments

Stable Dividend: AVY's dividend payments have been volatile in the past 10 years.

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (62.5%), AVY's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AVY's dividends in 3 years are forecast to be well covered by earnings (33.1% payout ratio).


Next Steps

Management

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

9.8yrs

Average management tenure


CEO

Mitch Butier (48yo)

3.83s

Tenure

US$8,495,032

Compensation

Mr. Mitchell R. Butier, also known as Mitch, has been the Chief Executive Officer of Avery Dennison Corporation since May 1, 2016 and as its President since November 1, 2014 and has been its Chairman of th ...


CEO Compensation Analysis

Compensation vs Market: Mitch's total compensation ($USD8.50M) is about average for companies of similar size in the US market ($USD7.47M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Mitchell Butier
Chairman3.83yrsUS$8.50m0.26% $21.4m
Gregory Lovins
Senior VP & CFO3yrsUS$2.74m0.039% $3.3m
Susan Miller
Senior VP12yrsUS$3.12m0.024% $2.0m
Kamran Kian
Vice President of Global Operations & Supply Chain14.17yrsno datano data
Lori Bondar
VP, Controller9.75yrsno data0.025% $2.1m
Hassan Rmaile
GM of Global Graphics & Reflective Solutions and VP of Global Technology & Venturesno datano datano data
Nicholas Colisto
VP & Chief Information Officer2yrsno datano data
Cynthia Guenther
Vice President of Finance & Investor Relationsno datano datano data
Danny Allouche
Vice President of Strategy & Corporate Developmentno datano datano data
Anne Hill
Senior VP & Chief Human Resources Officer13yrsUS$2.21m0.038% $3.2m

9.8yrs

Average Tenure

52yo

Average Age

Experienced Management: AVY's management team is seasoned and experienced (9.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Mitchell Butier
Chairman3.83yrsUS$8.50m0.26% $21.4m
Patrick Thomas Siewert
Lead Independent Director14.92yrsUS$281.78k0.017% $1.4m
David E. Pyott
Lead Independent Director9.92yrsUS$298.91k0.021% $1.7m
Julia Stewart
Independent Director17.17yrsUS$276.78k0.022% $1.8m
Kenneth Hicks
Independent Director12.67yrsUS$261.78k0.030% $2.5m
Peter Barker
Independent Director17.17yrsUS$276.78k0.036% $3.0m
Bradley Alford
Independent Director9.92yrsUS$259.28k0.022% $1.8m
Anthony Anderson
Independent Director7.25yrsUS$251.78k0.0034% $287.4k
Martha Sullivan
Independent Director7yrsUS$261.78k0.016% $1.3m
Andres Lopez
Independent Director3yrsUS$251.78k0.0042% $346.7k

9.9yrs

Average Tenure

63yo

Average Age

Experienced Board: AVY's board of directors are considered experienced (9.9 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: AVY insiders have sold more shares than they have bought 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

Avery Dennison Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Avery Dennison Corporation
  • Ticker: AVY
  • Exchange: NYSE
  • Founded: 1935
  • Industry: Paper Packaging
  • Sector: Materials
  • Market Cap: US$8.355b
  • Shares outstanding: 83.30m
  • Website: https://www.averydennison.com

Number of Employees


Location

  • Avery Dennison Corporation
  • 207 Goode Avenue
  • Glendale
  • California
  • 91203
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AVYNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
AV3DB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
0HJRLSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
AV3BRSE (Berne Stock Exchange)YesCommon StockCHCHFJan 1968
A1VY34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 2 REPR 1 COMBRBRLJan 2020

Biography

Avery Dennison Corporation produces and sells pressure-sensitive materials worldwide. The company’s Label and Graphic Materials segment offers pressure-sensitive label and packaging materials; and graphics and reflective products under the Fasson, JAC, Avery Dennison, and Mactac brands, as well as durable cast and reflective films. It provides its products to the home and personal care, beer and beverage, durables, pharmaceutical, wine and spirits, and food market segments; architectural, commercial sign, digital printing, and other related market segments; construction, automotive, and fleet transportation market segments, as well as traffic and safety applications; and sign shops, commercial printers, and designers. The company’s Retail Branding and Information Solutions segment designs, manufactures, and sells brand embellishments, graphic tickets, tags and labels, and sustainable packaging solutions, as well as offers creative services; item-level radio-frequency identification solutions; visibility and loss prevention solutions; price ticketing and marking solutions; care, content, and country of origin compliance solutions; and brand protection and security solutions. It serves retailers, brand owners, apparel manufacturers, distributors, and industrial customers. The company’s Industrial and Healthcare Materials segment offers tapes; pressure-sensitive adhesive based materials and converted products; medical fasteners; and performance polymers under the Fasson, Avery Dennison, and Yongle brands. It serves automotive, electronics, building and construction, general industrial, personal care, and medical markets. The company was formerly known as Avery International Corporation and changed its name to Avery Dennison Corporation in 1990. Avery Dennison Corporation was founded in 1935 and is headquartered in Glendale, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/29 00:18
End of Day Share Price2020/03/27 00:00
Earnings2019/12/28
Annual Earnings2019/12/28


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.