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Avery Dennison Announces Acquisition of Hanita Coatings

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Price movement

Avery Dennison (AVY) has a market cap of $6.6 billion. It fell 0.22% to close at $72.55 per share on December 13, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -0.90%, 4.9%, and 18.4%, respectively, on the same day.

AVY is trading 1.2% above its 20-day moving average, 0.07% below its 50-day moving average, and 1.1% 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 24.6% on December 13.

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

  • 3M (MMM) — $108.1 billion
  • Bemis Company (BMS) — $4.7 billion

Latest news on Avery Dennison

In a press release on December 13, 2016, Avery Dennison reported, “Avery Dennison Corporation (AVY) today announced it has agreed to acquire Hanita Coatings, a pressure-sensitive materials manufacturer of specialty films and laminates from Kibbutz Hanita Coatings and Tene Investment Funds for the purchase price of $75 million, subject to customary adjustments.”

According to Mitch Butier, Avery Dennison’s president and CEO, “We see clear opportunities to leverage our strong global organization and established brand to help accelerate Hanita Coatings’ product commercialization around the world,”

Butier added, “In addition to expanding our product portfolio and providing new growth opportunities, Hanita Coatings’ culture of innovation and long-standing commitment to R&D are a strong fit with our own company’s 80-year history of innovation in materials science.”

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Performance of Avery Dennison in 3Q16

Avery Dennison (AVY) 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 10 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.

The company’s current ratio fell to 1.0x, compared to 1.3x in 3Q15. Its debt-to-equity ratio rose to 3.4x in 3Q16, compared to 3.0x in 3Q15.

Projections

Avery Dennison (AVY) 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.

Next, let’s discuss ConAgra Brands (CAG).

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