Markets
AVY

Avery Dennison (AVY) Hits 52-Week High, Gains from Buyouts

An image of a person looking at financial reports
Credit: Shutterstock photo

Shares of Avery Dennison CorporationAVY crafted a 52-week high of $77.38 on Jun 23. The fresh high came on the back of expected benefits from its focus on productivity, acquisitions and performance of Pressure-sensitive materials.

The stock dropped a notch lower at $77.12 at the close of trading yesterday, with a solid one-year return of over 25.6% and year-to-date return of 23.1%. The average volume of shares traded over the last three months was roughly 708K. Avery Dennison has a market cap of $6.9 billion. The company has beaten the Zacks Consensus Estimate in each of the trailing four quarters, with an average positive surprise of 6.61%.

AVERY DENNISON Price and Consensus

AVERY DENNISON Price and Consensus | AVERY DENNISON Quote

Growth Drivers

Avery Dennison remains focused on driving growth through acquisitions. Recently, the company signed a definitive agreement to acquire Mactac Europe from Platinum Equity for $226 million (€ 200 million), including assumed debt.

The acquisition is in line with the company's strategic priority to penetrate high-value segments like pressure-sensitive materials for graphics applications. It will increase capacity to support growth of both graphics and tapes. The buyout is anticipated to close within three months, subject to customary conditions and approvals. It is expected to have an immaterial effect on EPS in 2016 and will be approximately 10 cents accretive to EPS in 2017.

Avery Dennison is focused on driving growth through differentiated quality, service and innovation, with the specific goal to accelerate growth in high-value market segments such as tapes, graphics, RFID and emerging markets. In addition to boosting growth in high-value categories, it is striving to escalate bankable growth in lesser differentiated categories such as base materials for bar code labels in Pressure-sensitive.

The company is increasing competitiveness by lowering costs and tailoring go-to-market strategies. Finally, productivity improvement, which has been the company's core strength over the years, remains a priority.

Avery Dennison reently hiked its quarterly dividend by 11% to 41 cents per share, reflecting its commitment to enhance shareholder value. Its share repurchases activities will also augment growth.

Moreover, Avery Dennison stands to gain from continued deployment of lean and six sigma, ongoing innovation and product reengineering, and investments in automation and restructuring.

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

Other Stocks to Consider

Other favorably placed stocks in the same sector include ACCO Brands Corporation ACCO , Altra Industrial Motion Corp. AIMC and Crown Holdings Inc. CCK . While ACCO and Altra Industrial Motion sport a Zacks Rank #1 (Strong Buy), Crown Holdings carries the same rank as Avery Dennison.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days . Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

CROWN HLDGS INC (CCK): Free Stock Analysis Report

ALTRA INDUS MOT (AIMC): Free Stock Analysis Report

AVERY DENNISON (AVY): Free Stock Analysis Report

ACCO BRANDS CP (ACCO): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

AVY AIMC CCK ACCO

Other Topics

Stocks

Latest Markets Videos