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The Valspar Corporation (VAL)

VAL Stock Report

2-Year Price History

Recent Price
(6/19 4:03PM) -0.6%
$22.11
52-Week Price
$14.47 – $24.95
Market Capitalization
$2.6 Billion
Dividend Yield
2.70%
Most Recent Dividend
$0.56
All Financial News about VAL is here.

About The Valspar Corp.

The Valspar Corporation is considered to operate in the Industrial Goods sector. They specifically operate in the General Building Materials business segment contained within the Materials & Construction industry.

The Company manufactures and distributes portfolio of coatings, paints and related products.

Ockham’s Rating

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VAL Revenue

As a value investing shop, we are interested in seeing how VAL’s revenues measure up against past performances. One easily understandable way of doing that is to compare Price to Sales per share levels over a given time frame. Assuming it is available, Ockham prefers to look at ten years of history (for this stock there are 10 years of history available) and we weigh recent years more heavily. This allows us to find weighted average historical high and low Price to Sales ratios, which give us a better idea of the stock’s current underlying value. Using this method, we have established a high range for Price to Sales of 0.96x and the low end of the range at 0.71x.

With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for VAL of 0.63x is well below its normal historic Price to Sales levels. At a price of $22.38, VAL is 26% below where we would expect to see it. Clearly, this stock looks undervalued compared to historical levels, at least on a Price to Sales basis. This will positively affect our analysis because it is rare to find a stock this far below historical norms, and we would expect some price appreciation to bring this metric back towards a more normal range.

VAL Cash Earnings

Looking at VAL specifically in their Cash Earnings capabilities, Ockham views VAL as significantly above its historical average multiple of Cash Earnings. Looking at the last 10 years we can get a good understanding of what investors have grown to expect from VAL. For example, VAL’s Cash Earnings ratio per share has fluctuated between 9.53 and 12.94 over this historical timeframe. This range is based upon a proprietary weighted methodology at Ockham, but can clearly show an investor where VAL is with respect to prior business periods.

So what does this tell us about VAL in particular? Basically, we would value the current level of Cash Earnings per share (which is at 13.09) as significantly overvalued. Just by looking at the last closing price of VAL, which was $22.38, we can see that compared to the historical high Price to Cash Earnings levels we calculated, the market has already rewarded VAL with a higher stock price. So basically, we don’t view this level of Cash Earnings or stock price as compatible with a long term value at this point. Just remember, that does not mean that VAL may not have other merits with which to find a good investment opportunity, it just means that we would prefer to see either an increase in Cash Earnings or a decrease in stock price before we would become bullish on this metric.

VAL Dividends

When determining a company’s future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn’t imperative for VAL to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis.

The estimated annual dividend for VAL is $0.60 producing a current dividend yield of 2.68%. Much like our evaluation of Sales and Cash Earnings per share, we review dividend yields from VAL against the historic high and low levels over all available dividend history. Because dividends are a decision made exclusively by management, we view a healthy and rising dividend as a sign of confidence and strength. The highest dividend yield from VAL over previous years was 4.15% while the lowest dividend yield was 1.12%. VAL has shown confidence by hiking up the dividend yield to 1.71% above the historical median.

Peer Comparison

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The Valspar Corp. Industry Grouping

(6/18/2009)
Company Ticker Market Cap (Ml) Latest
Price
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
5-Yr.
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not incuding VAL) 18.04 3.82 » 90.02 0.70 0.27 » 1.88 10.86% 39.66%
*10 year range does not include current year values
Foster Wheeler AG FWLT $3.1 Billion $24.55 7.14 1.67 » 27.83 0.45 0.01 » 2.38 12.98% 124.34%
NVR, Inc. NVR $2.9 Billion $493.90 33.26 2.16 » 33.88 0.61 0.16 » 1.21 0.08% 50.72%
The Valspar Corp. VAL $2.6 Billion $22.24 13.09 6.39 » 15.02 0.63 0.46 » 1.24 9.15% 13.04%
The Shaw Group, Inc. SGR $2.4 Billion $28.50 14.48 5.36 » 336.09 0.36 0.08 » 1.69 16.18% 2.97%
Waste Connections, Inc. WCN $2.1 Billion $26.15 10.27 4.41 » 16.84 1.60 0.80 » 3.10 13.25% 10.72%
RPM International, Inc. RPM $1.9 Billion $14.52 25.06 5.50 » 35.48 0.46 0.28 » 1.03 11.83% 9.56%
>
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The latest TV Media Discussion

6:10:23 PM VAL $23.55 The Valspar Corp.
Mad Money
17 days ago (06/02)
“…Monitorly there’s going to be fixups in foreclosure. Going to the lowe’s conference big business for them because it’s cosmetic and the cosmetic stuff is at lowe’s it’s not heavy contractor. VALSPAR not that great a quarter. Sherman williams better quarter. I think that’s a decent play. Thank you very much. >> jack from westchester. Boo-yah! >> boo-yah, jack. >> my question is about ym. They’re in protection. …” …more details…
6:09:50 PM VAL $23.55 The Valspar Corp.
Mad Money
17 days ago (06/02)
“…Expecting new home sales and construction to bounce back, and even if they do I want to know because people are going to be focused in renovating and adding on to existing homes, do you think there’s value in that sector in stocks like VALSPAR or cnh? I’ve been going with this housing bottom, and i’ve got to tell you looks like i’m going to be late judging by the data we saw today. But here’s the point. I do not see a renaissance in house building. …” …more details…
5:53:52 PM VAL $16.01 The Valspar Corp.
Happy Hour
2/20/2009 5:53 PM
“…In this down connie? Designers toned things down at new york’s fashion week. We’re joined by carmen mark val very who did just that. Designed the lovely ensemble thank you so much. I walked through the bar. Everyone said, whoa. >> good sign. Rebecca: I need to wear these dresses more often. >> we can arrange that. …” …more details…
5:03:16 PM VAL $16.14 The Valspar Corp.
Fast Money
2/19/2009 5:03 PM
“…The fundamentals, right now, dylan matter more than ever. You talk about the first quarter where the consumer is so constrained and the earnings outlocks are so bleak going forward most importantly, the level of val level three assets and the value of house prices every day when we wake up they decline more and more and the level of uncertainty, surrounding how that comes. >> are we diluting ourselves to …” …more details…
2:49:56 PM VAL $16.23 The Valspar Corp.
2/18/2009 2:49 PM
“…Underwater meaning the value of the home is less than the mortgage value in many instances you needed equity of at least 20%, the value of the loan couldn’t be more than 80% of the home’s val the government is going to change all that. The goal is with this plan one leg of it to refinance up to five million homeowners currently underwater or close …” …more details…
4:25:57 PM VAL $18.04 The Valspar Corp.
2/9/2009 4:25 PM
“…The securitization that creates much more standards. Everybody keeps talking about we don’t know how to value these assets. Carol bonavich who’s in the middle of trading them says they are being val yoould just at a price that’s too high for people but she is there is trading in mortgage-backed securities, million dollars here in there. …” …more details…
5:40:27 PM VAL $18.61 The Valspar Corp.
Fast Money
1/27/2009 5:40 PM
“…>> it’s snuggy, by the way. >> called the snug yo. >> that’s a different version of the snuggie. >> I don’t know. >> you guys should test that >> pete and I may do that later. >> val era. What’s going on with the oil >> keep in mind up 11% of the gasoline prices have seemed to the refiner trades is one of those trades in ’08 you to sell …” …more details…
7:51:32 AM VAL $18.00 The Valspar Corp.
Squawk Box
1/5/2009 7:51 AM
“…On wall street? I mean, I worked for jamie and steve black. That actually enhances valuation and acceptability on the street. It doesn’t hurt your image. It kind of brings it to earth already by year own val igs. >> I think so, but i’m just saying credibility, you know, means a lot, but, you know, dick fold had credibility, too. >> is it too far to say that …” …more details…
View All The Valspar Corp. News

Key Fundamentals

VAL – The Valspar Corporation Fundamentals
Price (6/19 4:03PM) $22.11
Volume (6/19 4:03PM) 781,230
Last Close Price $22.24
10 Day Average Volume 614,100
13 Week Price Range $18.72 – $24.91
52 Week Price Range $14.47 – $24.95
LTM Revenue $3.2 Billion
 
Shares Outstanding (10/2008) 118.4 Million
Market Capitalization $2.6 Billion
Shares Held By Institutions 73.6 Million
Institutional Holders 246
% Shares Held By Institutions 73.40%
Earnings Per Share (EPS) $1.38
P/E Ratio 18.80
Book Value Per Share $11.94
 
Gross Margin 31.70%
Annual Dividend 0.60
Dividend Yield 2.70%
Beta 0.97
Fiscal Year Ends October
NASDAQ 1827.47

19.75  1.09%
S&P; 500 921.23

2.86  0.31%
^DIA 85.31

-0.02  -0.02%