Parker-Hannifin Corp (PH) stock analysis

P/E above its 5-year median

Parker-Hannifin's P/E of 33.4 is above its own 5-year median of 27.8.

P/E above the industry

Parker-Hannifin's P/E of 33.4 is above the Fabricated Metal Products, except Machinery and Transportation Equipment median of 22.3.

EV/EBITDA above its 5-year median

Parker-Hannifin's EV/EBITDA of 25.8 is above its 5-year median of 20.9.

P/B above the industry

Parker-Hannifin's price-to-book of 7.68 is above the Fabricated Metal Products, except Machinery and Transportation Equipment median of 2.80.

Trading above fair value

The share price of $972.90 is above our fair value estimate of $595.28.

Margin of safety under 20%

The price is 63.4% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 4.1% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 21.1% a year over the last three fiscal years.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing faster than the industry

Revenue grew 11.9% over the last twelve months; the Fabricated Metal Products, except Machinery and Transportation Equipment median is 11.5%.

Guidance raised

Parker-Hannifin raised its fiscal year ending June 30, 2026 Organic sales growth outlook on Apr 30, 2026.

Gross margin improving

Gross margin was 37.7% over the last twelve months, against 37.0% a year earlier.

Return on equity

Needs positive equity and five years of results.

Return on capital over 10%

Return on invested capital was 15.0%, above the 10% that usually covers the cost of capital.

Return on equity against the industry

Needs positive equity.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin against its history

Needs five years of revenue and net income.

Net margin against the industry

Needs revenue and net income.

High debt

Debt is 91.7% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 78.4% five years ago to 91.7%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 29.6% of total debt.

Interest well covered

Operating income covers interest expense 11.9 times.

Short-term assets don't cover short-term debts

Current assets are 0.94 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 4.62; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Parker-Hannifin paid dividends worth 0.6% of the share price over the last twelve months.

Yield below Treasuries

The 0.6% 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; Parker-Hannifin yields 0.6%.

Dividend not cut

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

Earnings cover

Needs dividends paid and net income.

Covered by free cash flow

Dividends take 24.9% of free cash flow.