NYSE:IFF

Stock Analysis Report

International Flavors & Fragrances

Executive Summary

International Flavors & Fragrances Inc., together with its subsidiaries, manufactures flavors and fragrances for use in various consumer products.

Rewards

Earnings are forecast to grow 11.64% per year

Earnings grew by 35.2% over the past year

Pays a high and reliable dividend of 2.32%

Risk Analysis

Debt is not well covered by operating cash flow

Shareholders have been diluted in the past year



Snowflake Analysis

Established dividend payer with acceptable track record.


Similar Companies

Estée Lauder Companies

NYSE:EL

Share Price & News

How has International Flavors & Fragrances's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

7.1%

IFF

3.1%

US Chemicals

2.0%

US Market


1 Year Return

-2.3%

IFF

-0.5%

US Chemicals

23.6%

US Market

Return vs Industry: IFF underperformed the US Chemicals industry which returned 1.6% over the past year.

Return vs Market: IFF underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

IFFIndustryMarket
7 Day7.1%3.1%2.0%
30 Day9.4%0.6%3.9%
90 Day14.5%6.4%12.0%
1 Year-0.05%-2.3%15.2%-0.5%26.2%23.6%
3 Year21.6%14.2%36.4%10.9%53.2%43.3%
5 Year36.8%23.7%50.2%18.1%75.7%56.3%

Price Volatility Vs. Market

How volatile is International Flavors & Fragrances's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is International Flavors & Fragrances undervalued compared to its fair value and its price relative to the market?

39.31x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: IFF ($129.3) is trading above our estimate of fair value ($127.28)

Significantly Below Fair Value: IFF is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: IFF is poor value based on its PE Ratio (37.7x) compared to the Chemicals industry average (20.8x).

PE vs Market: IFF is poor value based on its PE Ratio (37.7x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: IFF is poor value based on its PEG Ratio (3.2x)


Price to Book Ratio

PB vs Industry: IFF is overvalued based on its PB Ratio (2.3x) compared to the US Chemicals industry average (2.2x).


Next Steps

Future Growth

How is International Flavors & Fragrances forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

11.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: IFF's forecast earnings growth (11.6% per year) is above the savings rate (1.7%).

Earnings vs Market: IFF's earnings (11.6% per year) are forecast to grow slower than the US market (14.3% per year).

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

Revenue vs Market: IFF's revenue (4.4% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: IFF's revenue (4.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: IFF's Return on Equity is forecast to be low in 3 years time (11.6%).


Next Steps

Past Performance

How has International Flavors & Fragrances performed over the past 5 years?

-6.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: IFF has high quality earnings.

Growing Profit Margin: IFF's current net profit margins (7.6%) are lower than last year (7.8%).


Past Earnings Growth Analysis

Earnings Trend: IFF's earnings have declined by -6.1% per year over the past 5 years.

Accelerating Growth: IFF's earnings growth over the past year (35.2%) exceeds its 5-year average (-6.1% per year).

Earnings vs Industry: IFF earnings growth over the past year (35.2%) exceeded the Chemicals industry -17%.


Return on Equity

High ROE: IFF's Return on Equity (6.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is International Flavors & Fragrances's financial position?


Financial Position Analysis

Short Term Liabilities: IFF's short term assets ($2.9B) exceed its short term liabilities ($1.4B).

Long Term Liabilities: IFF's short term assets ($2.9B) do not cover its long term liabilities ($5.4B).


Debt to Equity History and Analysis

Debt Level: IFF's debt to equity ratio (71.1%) is considered high.

Reducing Debt: IFF's debt to equity ratio has increased from 57.5% to 71.1% over the past 5 years.

Debt Coverage: IFF's debt is not well covered by operating cash flow (14.1%).

Interest Coverage: IFF's interest payments on its debt are well covered by EBIT (5.6x coverage).


Balance Sheet

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

Debt Coverage by Assets: IFF's debt is not covered by short term assets (assets are 0.7x debt).


Next Steps

Dividend

What is International Flavors & Fragrances's current dividend yield, its reliability and sustainability?

2.22%

Current Dividend Yield


Dividend Yield vs Market

company2.2%marketbottom25%1.4%markettop25%3.7%industryaverage2.1%forecastin3Years2.3%

Current dividend yield vs market & industry

Notable Dividend: IFF's dividend (2.32%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: IFF's dividend (2.32%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (85.7%), IFF's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: IFF's dividends in 3 years are forecast to be well covered by earnings (44.9% payout ratio).


Next Steps

Management

What is the CEO of International Flavors & Fragrances's salary, the management and board of directors tenure and is there insider trading?

4.4yrs

Average management tenure


CEO

Andreas Fibig (57yo)

5.3yrs

Tenure

US$8,521,940

Compensation

Mr. Andreas Fibig serves as Director of Novo Nordisk A/S since March 22, 2018. He has been the Chief Executive Officer of International Flavors & Fragrances Inc. (IFF) since September 1, 2014.. He has been ...


CEO Compensation Analysis

Compensation vs Market: Andreas's total compensation ($USD8.52M) is about average for companies of similar size in the US market ($USD10.76M).

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


Management Age and Tenure

4.4yrs

Average Tenure

55yo

Average Age

Experienced Management: IFF's management team is considered experienced (4.4 years average tenure).


Board Age and Tenure

7.0yrs

Average Tenure

68yo

Average Age

Experienced Board: IFF's board of directors are considered experienced (7 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$8,729,84003 Jan 20
Winder Investment Pte Ltd
EntityCompany
Shares68,000
Max PriceUS$128.38
BuyUS$8,272,21002 Jan 20
Winder Investment Pte Ltd
EntityCompany
Shares65,000
Max PriceUS$127.88
BuyUS$12,521,36331 Dec 19
Winder Investment Pte Ltd
EntityCompany
Shares98,076
Max PriceUS$127.67
BuyUS$11,824,66730 Dec 19
Winder Investment Pte Ltd
EntityCompany
Shares94,057
Max PriceUS$126.13
BuyUS$3,816,18825 Feb 19
Winder Investment Pte Ltd
EntityCompany
Shares29,642
Max PriceUS$128.74
BuyUS$5,223,86322 Feb 19
Winder Investment Pte Ltd
EntityCompany
Shares40,000
Max PriceUS$131.67
BuyUS$6,451,79721 Feb 19
Winder Investment Pte Ltd
EntityCompany
Shares50,000
Max PriceUS$131.04
BuyUS$15,276,82820 Feb 19
Winder Investment Pte Ltd
EntityCompany
Shares114,000
Max PriceUS$134.97
BuyUS$11,368,92519 Feb 19
Winder Investment Pte Ltd
EntityCompany
Shares85,946
Max PriceUS$134.85

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 40.3%.


Management Team

  • Nicolas Mirzayantz (56yo)

    Divisional Chief Executive Officer of Scent

    • Tenure: 15.3yrs
    • Compensation: US$2.09m
  • Anne Chwat (60yo)

    Executive VP

    • Tenure: 8.8yrs
    • Compensation: US$1.76m
  • Francisco Fortanet (50yo)

    Executive Vice President of Operations

    • Tenure: 4.4yrs
  • Rich O'Leary (59yo)

    Executive VP & CFO

    • Tenure: 3.3yrs
    • Compensation: US$2.06m
  • Andreas Fibig (57yo)

    Chairman & CEO

    • Tenure: 5.3yrs
    • Compensation: US$8.52m
  • Michael DeVeau

    Head of Investor Relations and Communications & Divisional CFO of Scent

    • Matthias Haeni (53yo)

      Divisional Chief Executive Officer of Taste

      • Tenure: 5.8yrs
      • Compensation: US$4.29m
    • Gregory Yep (54yo)

      Executive VP and Chief Global Scientific & Sustainability Officer

      • Tenure: 3.6yrs
    • Susana Suarez-Gonzalez (49yo)

      Executive VP & Chief Human Resources Officer

      • Tenure: 3.2yrs
    • Vic Verma

      Senior VP & Chief Information Officer

      • Tenure: 0.7yrs

    Board Members

    • Dale Morrison (70yo)

      Lead Independent Director

      • Compensation: US$262.60k
    • Katherine Hudson (72yo)

      Independent Director

      • Tenure: 11.3yrs
      • Compensation: US$242.60k
    • Marcello Bottoli (57yo)

      Independent Director

      • Tenure: 12.5yrs
      • Compensation: US$242.60k
    • Christina Gold (71yo)

      Independent Director

      • Tenure: 7yrs
      • Compensation: US$255.15k
    • Michael Ducker (65yo)

      Independent Director

      • Tenure: 5.3yrs
      • Compensation: US$232.60k
    • John Ferraro (63yo)

      Independent Director

      • Tenure: 4.7yrs
      • Compensation: US$260.10k
    • Linda Buck (72yo)

      Independent Director

      • Tenure: 12.5yrs
      • Compensation: US$232.60k
    • Roger Ferguson (68yo)

      Independent Director

      • Tenure: 10yrs
      • Compensation: US$247.60k
    • Andreas Fibig (57yo)

      Chairman & CEO

      • Tenure: 5.3yrs
      • Compensation: US$8.52m
    • Shekhar Mitra

      Member of Scientific Advisory Board

      • Tenure: 4.8yrs

    Company Information

    International Flavors & Fragrances Inc.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: International Flavors & Fragrances Inc.
    • Ticker: IFF
    • Exchange: NYSE
    • Founded: 1833
    • Industry: Specialty Chemicals
    • Sector: Materials
    • Market Cap: US$14.402b
    • Shares outstanding: 106.78m
    • Website: https://www.iff.com

    Number of Employees


    Location

    • International Flavors & Fragrances Inc.
    • 521 West 57th Street
    • New York
    • New York
    • 10019
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    IFFNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
    IFFDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
    IFFENXTPA (Euronext Paris)YesCommon StockFREURJan 1968
    0RF3LSE (London Stock Exchange)YesCommon StockGBEURJan 1968
    IFFTASE (The Tel-Aviv Stock Exchange)YesCommon StockILILSJan 1968

    Biography

    International Flavors & Fragrances Inc., together with its subsidiaries, manufactures flavors and fragrances for use in various consumer products. It operates through three segments: Taste, Scent, and Frutarom. The Taste segment offers flavor compounds primarily to the food and beverage industries for use in consumer products, such as prepared foods, beverages, dairy, food, and sweet products. The Scent segment provides fragrance compounds, which include fine fragrances comprising perfumes and colognes, as well as consumer fragrances for personal care, household products, and beauty care; fragrance ingredients comprising synthetic and natural ingredients that could be combined with other materials to create fragrance and consumer compounds; and cosmetic active ingredients consisting of active and functional ingredients, botanicals, and delivery systems to support its customers’ cosmetic and personal care product lines. This segment serves perfume and toiletries manufacturers in the cosmetics industry; and manufacturers of soaps, detergents, fabric care, household cleaners, and air fresheners in the household products industry. The Frutarom segment creates and manufactures a naturals-focused suite of flavor compounds, functional foods, and specialty fine ingredients to small, local, and regional customers. The company has operations in Europe, Africa, the Middle East, Greater Asia, North America, and Latin America. The company has a strategic collaboration with Neptune Wellness Solutions Inc. to co-develop hemp-derived CBD products for the United States market. International Flavors & Fragrances Inc. was founded in 1833 and is headquartered in New York, New York. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/18 23:37
    End of Day Share Price2020/01/17 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    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.