Avery Dennison (NYSE:AVY) and ACCO Brands (NYSE:ACCO) are both industrial products companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, dividends, risk, profitability, institutional ownership, valuation and analyst recommendations.
Valuation and Earnings
This table compares Avery Dennison and ACCO Brands' gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Avery Dennison | $7.07 billion | 1.31 | $303.60 million | $6.60 | 16.82 |
| ACCO Brands | $1.96 billion | 0.31 | $106.80 million | $1.20 | 5.32 |
Avery Dennison has higher revenue and earnings than ACCO Brands. ACCO Brands is trading at a lower price-to-earnings ratio than Avery Dennison, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Avery Dennison and ACCO Brands' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Avery Dennison | 8.29% | 51.00% | 10.20% |
| ACCO Brands | 5.93% | 15.79% | 4.31% |
Dividends
Avery Dennison pays an annual dividend of $2.32 per share and has a dividend yield of 2.1%. ACCO Brands pays an annual dividend of $0.26 per share and has a dividend yield of 4.1%. Avery Dennison pays out 35.2% of its earnings in the form of a dividend. ACCO Brands pays out 21.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Avery Dennison has increased its dividend for 9 consecutive years and ACCO Brands has increased its dividend for 1 consecutive years. ACCO Brands is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Ratings
This is a breakdown of recent ratings and target prices for Avery Dennison and ACCO Brands, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Avery Dennison | 1 | 6 | 6 | 0 | 2.38 |
| ACCO Brands | 0 | 0 | 2 | 0 | 3.00 |
Avery Dennison presently has a consensus target price of $125.1818, suggesting a potential upside of 12.74%. ACCO Brands has a consensus target price of $11.50, suggesting a potential upside of 80.25%. Given ACCO Brands' stronger consensus rating and higher probable upside, analysts clearly believe ACCO Brands is more favorable than Avery Dennison.
Volatility & Risk
Avery Dennison has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500. Comparatively, ACCO Brands has a beta of 2.16, suggesting that its share price is 116% more volatile than the S&P 500.
Institutional & Insider Ownership
88.6% of Avery Dennison shares are owned by institutional investors. Comparatively, 89.9% of ACCO Brands shares are owned by institutional investors. 1.1% of Avery Dennison shares are owned by insiders. Comparatively, 5.8% of ACCO Brands shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Summary
Avery Dennison beats ACCO Brands on 10 of the 17 factors compared between the two stocks.
