With a daily gain of 6.02% and a 3-month gain of 10.92%, H.B. Fuller Co (FUL, Financial) has been making waves in the market. Its Earnings Per Share (EPS) stands at 2.83, raising the question, is H.B. Fuller Co fairly valued? Let's delve into the data and analysis to find out.
Company Introduction
H.B. Fuller Co (FUL, Financial) is a leading manufacturer and seller of adhesives, sealants, and other chemical-based products. The company operates in three business units: constructions, engineering, and hygiene, health, and consumable adhesives. With a market cap of $3.90 billion and sales worth $3.60 billion, H.B. Fuller Co is a significant player in the industry. The company's focus on environmentally friendly products aligns with the trend of environmental, social, and governance investing.
Understanding GF Value
The GF Value is a proprietary measure that estimates a stock's intrinsic value. It factors in historical trading multiples, a GuruFocus adjustment factor based on past returns and growth, and future business performance estimates. The GF Value Line provides an overview of the stock's ideal fair trading value.
H.B. Fuller Co's stock is estimated to be fairly valued according to our GF Value. The current share price of $71.65 aligns closely with our calculated fair value. As H.B. Fuller Co is fairly valued, the long-term return of its stock is likely to be close to the rate of its business growth.
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Financial Strength
Before investing, it's crucial to assess a company's financial strength. Companies with poor financial strength pose a higher risk of permanent loss. H.B. Fuller Co's cash-to-debt ratio of 0.06 is lower than 92.23% of 1506 companies in the Chemicals industry, indicating fair financial strength.
Profitability and Growth
Consistent profitability over the long term reduces investment risk. H.B. Fuller Co has been profitable 10 over the past 10 years, with an operating margin of 9.11%, better than 61.86% of 1526 companies in the Chemicals industry. However, the company's growth ranks worse than 59.97% of 1449 companies in the Chemicals industry, indicating room for improvement.
ROIC vs WACC
Comparing a company's return on invested capital (ROIC) and the weighted average cost of capital (WACC) provides insights into its profitability. H.B. Fuller Co's ROIC of 5.72 is lower than its WACC of 8.85, suggesting the company must improve its efficiency in generating cash flow relative to the capital it has invested in its business.
Conclusion
In conclusion, H.B. Fuller Co (FUL, Financial) is estimated to be fairly valued. The company's financial condition is fair, and its profitability is strong. However, its growth ranks below average in the Chemicals industry. To learn more about H.B. Fuller Co stock, check out its 30-Year Financials here.
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