Adhesives & Sealants
H.B. Fuller Company, together with its subsidiaries, formulates, manufactures, and markets adhesives, sealants, coatings, polymers, tapes, encapsulants, additives, and other specialty chemical products worldwide. The company operates through three segments: Hygiene, Health and Consumable Adhesives; Engineering Adhesives; and Construction Adhesives. The Hygiene, Health and Consumable Adhesives segment produces and supplies specialty industrial adhesives, such as thermoplastic, thermoset, reactive, and water-based and solvent-based products for applications in various markets, including food and beverage containers, flexible packaging, consumer goods, package integrity and re-enforcement, and non-durable goods; corrugation, folding carton, tape and label, paper converting, envelopes, books, multi-wall bags, sacks, and tissue and towel; disposable diapers, feminine care, and medical garments; and health and beauty. The Engineering Adhesives segment produces and supplies high performance industrial adhesives, such as reactive, light cure, two-part liquids, silicone, polyurethane, film, and fast cure products to the appliances and filters, windows, doors and wood flooring, and textile, transportation, electronics, medical, clean energy, aerospace and defense, appliance, heavy machinery, and insulating glass markets. The Construction Adhesives segment provides products used for tile setting, commercial roofing, heating, ventilation, and air conditioning and insulation applications, as well as caulks and sealants for the consumer market and professional trade. The company sells its products directly through distributors and retailers. H.B. Fuller Company was founded in 1887 and is headquartered in Saint Paul, Minnesota.
Sector
Discounted Cash Flow Valuation of Fuller H B Co
Growth
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%
Discount
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%
Multiple
g\r | +10% | +11% | +12% | +13% | +14% |
---|---|---|---|---|---|
0% | 10 | 9 | 8 | 8 | 7 |
+1% | 11 | 10 | 9 | 8 | 8 |
+2% | 13 | 11 | 10 | 9 | 8 |
+3% | 14 | 13 | 11 | 10 | 9 |
+4% | 17 | 14 | 12 | 11 | 10 |
Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | TV |
---|---|---|---|---|---|---|---|---|---|---|---|---|
FCF | $305.4M | $323.4M | $342.2M | $361.7M | $382M | $403M | $424.8M | $447.3M | $470.6M | $494.6M | $519.3M | $5.193B |
DCF | $281.2M | $258.7M | $237.8M | $218.4M | $200.4M | $183.6M | $168.2M | $153.8M | $140.6M | $128.4M | $1.284B | |
Value | $3.255B |
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
Years | 11-2015 | 12-2016 | 12-2017 | 11-2018 | 11-2019 | 11-2020 | 11-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Net Margin | 4.2% | 5.9% | 2.5% | 5.6% | 4.5% | 4.4% | 4.9% | 4.8% | 4.1% | 4.4% |
ROA | 8.3% | 9.8% | 2.9% | 6.4% | 6.9% | 6.1% | 6.9% | 7.7% | 7.8% | 8% |
ROE | 9.9% | 13% | 5.6% | 15% | 11% | 9% | 10% | 11% | 8.3% | 8.7% |
The average Net Margin over the past 5 years is +4.74%.
The trend of Net Margin over the past 5 years is -0.18%.
The average ROA over the past 5 years is +6.97%.
The trend of ROA over the past 5 years is +0.29%.
The average ROE over the past 5 years is +10.68%.
The trend of ROE over the past 5 years is -0.87%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
Years | 11-2015 | 12-2016 | 12-2017 | 11-2018 | 11-2019 | 11-2020 | 11-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Debt FCF | 4.76 | 5.65 | 28.56 | 12.56 | 9.79 | 7.26 | 13.79 | 13.95 | 7.09 | 5.99 |
Debt Equity | 0.83 | 0.80 | 2.35 | 2.02 | 1.66 | 1.28 | 1.01 | 1.10 | 1.05 | 1.03 |
MIN | ||||||||||
Graham Stability | - | - | 67% | 100% | 100% | 100% | 100% | 100% | 93% | 67% |
The Debt/FCF trailing twelve month is 5.99.
The trend of Debt/FCF over the past 5 years is -0.24.
Graham’s Stability measure stands at 0.67.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
Years | 12-2016 | 11-2018 | 11-2020 | 12-2022 | Trend |
---|---|---|---|---|---|
Revenue | 7.7% | 2.9% | 8% | -6.4% | -0.012% |
Net Income | 2.2% | -3.3% | 5.4% | -20% | -8.4% |
Stockholders Equity | 9.4% | 8.8% | 8.3% | 9% | 0.59% |
FCF | 10% | 7% | 2% | 100% | 6.5% |
The Revenue CAGR over the past 5 years is +2.92%.
The trend of Revenue growth rate over the past 5 years is -0.01%.
The Earnings CAGR over the past 5 years is -3.28%.
The trend of Earnings growth rate over the past 5 years is -8.37%.
The Equity CAGR over the past 5 years is +8.79%.
The trend of Equity growth rate over the past 5 years is +0.59%.
The FCF CAGR over the past 5 years is +6.98%.
The trend of FCF growth rate over the past 5 years is +6.46%.