In today's rapidly changing and fiercely competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies. In this article, we will conduct a comprehensive industry comparison, evaluating Parker Hannifin PH against its key competitors in the Machinery industry. By examining key financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within the industry.
Parker Hannifin Background
Parker Hannifin is an industrial conglomerate operating through two segments: diversified industrial, which serves a variety of end markets, and aerospace systems, which sells engine and actuation components. The diversified industrial segment consists of six groups, including engineered materials (sealing devices), filtration (filters and systems monitoring and removing contaminants from liquids and gases), fluid connectors (valves, couplings, and other fittings), instrumentation (flow manufacturing components and fluid control applications), and motion systems (hydraulic, pneumatic, and electromechanical components in industrial machinery and equipment). The segment boasts 17,100 independent distributors, and about 40% of its business occurs outside the United States.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Parker Hannifin Corp | 31.44 | 6.97 | 4.55 | 5.6% | $1.22 | $1.81 | 1.17% |
| Illinois Tool Works Inc | 23.37 | 23.50 | 5.06 | 36.52% | $1.53 | $1.74 | -1.61% |
| Ingersoll Rand Inc | 50.24 | 4.04 | 5.87 | 2.19% | $0.49 | $0.81 | 7.02% |
| Xylem Inc | 34.95 | 2.79 | 3.51 | 2.07% | $0.42 | $0.78 | 1.35% |
| Dover Corp | 18.36 | 4.87 | 3.32 | 6.28% | $0.5 | $0.76 | 1.28% |
| Fortive Corp | 30.24 | 2.49 | 4.33 | 2.1% | $0.41 | $0.92 | 2.68% |
| Snap-on Inc | 18.40 | 3.43 | 4.07 | 4.67% | $0.37 | $0.59 | -1.06% |
| Pentair PLC | 26.46 | 5 | 4.32 | 4.03% | $0.21 | $0.39 | -1.53% |
| IDEX Corp | 35.56 | 4.55 | 5.45 | 3.19% | $0.21 | $0.35 | 0.6% |
| Graco Inc | 31.51 | 5.99 | 7.20 | 4.96% | $0.17 | $0.28 | -3.79% |
| Nordson Corp | 31.25 | 5.14 | 5.55 | 4.16% | $0.2 | $0.37 | 1.99% |
| ITT Inc | 25.88 | 4.50 | 3.54 | 6.05% | $0.24 | $0.31 | 7.68% |
| Lincoln Electric Holdings Inc | 24.76 | 8.74 | 2.95 | 7.6% | $0.17 | $0.35 | -4.79% |
| Mueller Industries Inc | 17.54 | 3.83 | 2.87 | 6.46% | $0.23 | $0.28 | 21.72% |
| Crane Co | 38.48 | 6.32 | 4.44 | 5.07% | $0.12 | $0.24 | 12.66% |
| Donaldson Co Inc | 22.74 | 6.18 | 2.63 | 7.38% | $0.17 | $0.33 | 6.36% |
| RBC Bearings Inc | 45.70 | 3.41 | 5.77 | 1.71% | $0.12 | $0.17 | 3.19% |
| Flowserve Corp | 29.16 | 3.79 | 1.72 | 2.9% | $0.12 | $0.36 | 3.5% |
| ESAB Corp | 28.41 | 4.16 | 2.80 | 3.85% | $0.12 | $0.25 | -1.14% |
| SPX Technologies Inc | 43.46 | 5.58 | 4 | 3.8% | $0.1 | $0.2 | 7.8% |
| The Middleby Corp | 18.69 | 2.03 | 1.90 | 3.26% | $0.21 | $0.36 | -3.86% |
| Chart Industries Inc | 48.12 | 2.44 | 2.10 | 2.17% | $0.25 | $0.36 | 18.33% |
| Watts Water Technologies Inc | 25.41 | 4.18 | 3.14 | 4.18% | $0.11 | $0.26 | 7.79% |
| Gates Industrial Corp PLC | 24.99 | 1.70 | 1.60 | 1.51% | $0.16 | $0.34 | -4.83% |
| Average | 30.16 | 5.16 | 3.83 | 5.48% | $0.29 | $0.47 | 3.54% |
Upon analyzing Parker Hannifin, the following trends can be observed:
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Notably, the current Price to Earnings ratio for this stock, 31.44, is 1.04x above the industry norm, reflecting a higher valuation relative to the industry.
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The elevated Price to Book ratio of 6.97 relative to the industry average by 1.35x suggests company might be overvalued based on its book value.
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The stock's relatively high Price to Sales ratio of 4.55, surpassing the industry average by 1.19x, may indicate an aspect of overvaluation in terms of sales performance.
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The Return on Equity (ROE) of 5.6% is 0.12% above the industry average, highlighting efficient use of equity to generate profits.
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The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $1.22 Billion, which is 4.21x above the industry average, implying stronger profitability and robust cash flow generation.
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The company has higher gross profit of $1.81 Billion, which indicates 3.85x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company is witnessing a substantial decline in revenue growth, with a rate of 1.17% compared to the industry average of 3.54%, which indicates a challenging sales environment.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
In terms of the Debt-to-Equity ratio, Parker Hannifin stands in comparison with its top 4 peers, leading to the following comparisons:
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When considering the debt-to-equity ratio, Parker Hannifin exhibits a stronger financial position compared to its top 4 peers.
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This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.79, which can be perceived as a positive aspect by investors.
Key Takeaways
For Parker Hannifin in the Machinery industry, the PE, PB, and PS ratios are all high compared to its peers, indicating potentially overvalued stock. On the other hand, the high ROE, EBITDA, and gross profit suggest strong profitability and operational efficiency. However, the low revenue growth rate may raise concerns about the company's future performance relative to industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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