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Avery Dennison Hits 52-Week High on Dividend Hike, Solid Q1


Shares of Avery Dennison Corporation AVY crafted a 52-week high of $84.57 on May 16, before closing lower at $84.31, backed by the recent dividend hike and strong first-quarter earnings.

Avery Dennison has a market cap of roughly $7.5 billion. The average volume of shares traded in the last three months is around 649K. The stock delivered a solid one-year return of around 13.3%.

The company beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average positive surprise of 5.53%.

Avery Dennison Corporation Price and Consensus

Avery Dennison Corporation Price and Consensus | Avery Dennison Corporation Quote

Price Movement

Year to date, Avery Dennison has outperformed the Zacks classified Office Supplies & Forms sub-industry with respect to price performance. The stock rallied 13.3%, while the industry recorded gain of 4.3% over the same time frame.

Driving Factors

Avery Dennison’s shares have been on a rising trend after the company posted impressive first-quarter 2017 results on Apr 26. In the quarter, earnings and revenues improved on a year-over-year basis and also beat the Zacks Consensus Estimate on both the counts.

For 2017, the company hiked adjusted earnings per share guidance to the range of $4.50–$4.65, reflecting a stronger operating outlook and a lower tax rate. Its consistent execution of strategies continues to enhance competitive advantage while driving profitable growth.

Avery Dennison also anticipates organic sales growth of 3.5– 4.5% for full-year 2017, reflecting solid results in the first quarter. The company expects to deliver its sixth consecutive year of a double-digit increase in EPS and solid organic sales growth.

Notably, Avery Dennison announced a 10% dividend hike to 45 cents per share, earlier in April. The company’s balance sheet remains strong and has ample capacity to continue funding acquisitions, as well as returning cash to shareholders. It repurchased 0.5 million shares in the first quarter at an aggregate cost of $35 million and paid $36 million in dividends.

In addition, the company remains confident about the consistent execution of strategies that enhances competitive advantage while driving profitable growth and improving returns. Moreover, its focus on productivity, cost control, execution of strategies and new operating structure will drive results, moving ahead.

Avery Dennison currently carries a Zacks Rank #2 (Buy).

Other Key Picks

Other stocks worth considering in the same sector are AGCO Corporation AGCO, Altra Industrial Motion Corp. AIMC and Parker-Hannifin Corporation PH. All the three stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AGCO has an average positive earnings surprise of 40.39% for the trailing four quarters. Altra Industrial Motion generated an average positive earnings surprise of 15.93% in the past four quarters, while Parker-Hannifin has an average positive earnings surprise of 14.94% for the last four quarters.

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