Ricardo Pillai
2 min read
In This Article:
We came across a bullish thesis on Avery Dennison Corporation (AVY) on Substack by Serhio MaxDividends. In this article, we will summarize the bulls’ thesis on AVY. Avery Dennison Corporation (AVY)'s share was trading at $183.97 as of May 20th. AVY’s trailing and forward P/E were 21.17 and 19.05 respectively according to Yahoo Finance.
A closeup of an employee's hands attaching a barcode label to a shipping box.
Avery Dennison Corporation (AVY) is a global leader in materials science and digital identification solutions, operating in over 50 countries with approximately 35,000 employees. In fiscal 2024, the company reported net sales of $8.8 billion, a 4.7% increase from the previous year, while adjusted earnings per share grew 19% to $9.43. This performance highlights Avery Dennison’s strong operational efficiency and strategic investments in high-value product categories, which now account for nearly half of its portfolio. Both the Materials Group and Solutions Group showed solid growth in the fourth quarter, with sales increasing 4% and 3% respectively, and healthy operating margins of 14.8% and 11.4%, reflecting consistent growth across diverse segments.
For dividend investors, Avery Dennison presents a compelling opportunity with a 2.08% dividend yield, an unbroken 15-year streak of dividend increases, and a three-year dividend growth rate of 9.06%. The company maintains a conservative payout ratio of 43.32%, providing ample room for future dividend hikes. In 2024, Avery Dennison returned $525 million to shareholders through dividends and share repurchases, demonstrating its commitment to delivering shareholder value.
Beyond its core labeling business, Avery Dennison is advancing in the digital economy through its Intelligent Labels segment, which continues to grow strongly and is expanding into new categories such as food. This innovation underscores the company’s adaptability and forward-thinking approach in a rapidly evolving market. With solid financial results, disciplined capital returns, and ongoing investments in innovation, Avery Dennison offers a balanced combination of growth potential and reliable dividend income.
Avery Dennison Corporation (AVY) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 36 hedge fund portfolios held AVY at the end of the fourth quarter which was 30 in the previous quarter. While we acknowledge the risk and potential of AVY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AVY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
