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Avery Dennison Announces a Partnership with Apex Clean Energy

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Price movement

Avery Dennison (AVY) rose 1.8% to close at $72.62 per share during the first week of December 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 1.8%, 2.8%, and 18.5%, respectively, on December 9, 2016.

AVY is trading 1.8% above its 20-day moving average, 0.21% below its 50-day moving average, and 0.88% below its 200-day moving average.

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Related ETF and peers

The Vanguard Materials ETF (VAW) invests 0.93% of its holdings in Avery Dennison. The YTD price movement of VAW was 25.7% on December 9.

The market caps of Avery Dennison’s competitors are as follows:

  • 3M Company (MMM) — $107.9 billion
  • Bemis Company (BMS) — $4.7 billion

Latest news on Avery Dennison

In a press release on December 5, 2016, Avery Dennison reported, “Global labeling and packaging materials manufacturer Avery Dennison Corporation [AVY] has signed a wind power purchase agreement [PPA] with Apex Clean Energy to offset 50 percent of the company’s U.S.-based greenhouse gas emissions derived from electricity consumption, signaling commitment by Avery Dennison to renewable energy and energy efficient practices and technology.”

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The release also noted, “Under the agreement with Apex’s Perryton Wind, a 299.91 MW [megawatt] wind energy project to be located in Ochiltree County, Texas, Avery Dennison will purchase 20 MW of renewable energy capacity. The PPA is a key component of Avery Dennison’s 2025 sustainability goal to reduce absolute greenhouse gas emissions from its operations by at least three percent annually, and by at least 26 percent overall, between 2015 and 2015, made as part of the company’s new participation in World Wildlife Fund’s [WWF] Climate Savers Program.”

Performance of Avery Dennison in 3Q16

Avery Dennison reported 3Q16 net sales of $1.51 billion, a rise of 2.7% from $1.47 billion in 3Q15. Sales from the company’s Pressure-Sensitive Materials and Retail Branding and Information Solutions segments rose 3.7% and 1.1%, respectively. Sales from its Vancive Medical Technologies segment fell 20.5% between 3Q15 and 3Q16. The company’s gross profit margin expanded ten basis points during the same period.

AVY’s net income and EPS (earnings per share) rose to $89.1 million and $0.98, respectively, in 3Q16, compared to $81.7 million and $0.88, respectively, in 3Q15. Its cash and cash equivalents and inventories rose 31.7% and 10.3%, respectively, between 3Q15 and 3Q16.

Its current ratio fell to 1.0x, and its debt-to-equity ratio rose to 3.4x in 3Q16, compared to 1.3x and 3.0x, respectively, in 3Q15.

Projections

Avery Dennison projects EPS of $3.50–$3.55 for 2016. It also expects adjusted EPS of $3.95–$4.00, which excludes $0.15 per share for restructuring charges and other items and $0.30 per share for non-cash charges to settle its US pension obligations for 2016.

In the next part of the series, we’ll take a look at Wolverine Worldwide (WWW).

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