Avery Dennison Corp (AVY) stock analysis

P/E above its 5-year median

Avery Dennison's P/E of 20.6 is above its own 5-year median of 20.5.

P/E above the industry

Avery Dennison's P/E of 20.6 is above the Paper and Allied Products median of 18.7.

EV/EBITDA against its history

Needs positive EBITDA and price history.

P/B above the industry

Avery Dennison's price-to-book of 6.14 is above the Paper and Allied Products median of 1.46.

Trading above fair value

The share price of $188.18 is above our fair value estimate of $158.27.

Margin of safety under 20%

The price is 18.9% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew -0.7% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -1.5% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -0.9% over the last twelve months, against a 5-year average of 4.4% a year.

Growing faster than the industry

Revenue grew 5.8% over the last twelve months; the Paper and Allied Products median is 0.8%.

Guidance issued

The latest outlook (full year 2026 reported EPS, Oct 29, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin improving

Gross margin was 29.0% over the last twelve months, against 28.6% a year earlier.

Return on equity over 15%

Return on equity was 31.2% over the last twelve months and averaged 33.6% over five years.

Return on invested capital

Needs operating income and invested capital.

Return on equity above the industry

Avery Dennison's return on equity of 31.2% is above the Paper and Allied Products median of 0.3%.

Earnings grew over 5 years

Net income grew 4.4% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 7.6% over the last twelve months, against a 5-year average of 7.8%.

Net margin above the industry

Avery Dennison's net margin of 7.6% is above the Paper and Allied Products median of 0.2%.

High debt

Debt is 158% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 143% five years ago to 158%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 33.5% of total debt.

Interest coverage

Interest expense is not reported separately.

Short-term assets cover short-term debts

Current assets are 1.13 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.19; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Avery Dennison paid dividends worth 2.1% of the share price over the last twelve months.

Yield below Treasuries

The 2.1% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Avery Dennison yields 2.1%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 41.7% of net income.

Covered by free cash flow

Dividends take 27.7% of free cash flow.