Tuesday 17 September 2013

Analysis of Jarden Corporation

An American sports, outdoor and consumer products company

Company: Jarden Corporation

Business: An American sports, outdoor and consumer products company. They have a broad portfolio of brands and the most well known to me are: Adio, Marmot, NUK, Billy Boy, Marker and K2. For the full list of brands please look here.

Active: With all their broad range of brands they are present world wide.

P/E: 15.3

contrarian values of P/E, P/B, ROE as well as dividend
The P/E of Jarden Corporation is at 15.3 which could be acceptable depending on the P/B but unfortunately it comes in at 2.1 which gives according to Graham that it is not an interesting company to invest in. The earnings to sales is only at 4% so not as good as one would have liked but the ROE is almost 14% so there it is acceptable. The book to debt is surprisingly bad for an American company with a ratio of 0.3. The growth for the last three years has been yearly 3.6% so a bit more then 2% over inflation which is less then what one would have liked to see. The motivated P/E then becomes around 14 to 16 which means that the company is today fairly priced on the market. They paid no dividends last year but looking back they have been paying around a 1% dividend which would have represented around 15% of their earnings. I did not bother to dig out why they stopped the dividends last year.

Conclusion: Jarden Corporation does not fulfil my criteria for investment or even to end up on the observation list... but and there is a but here... They have several well known brands, they are doing good business and making good money and an American company that is today fairly valued by the market is not very common. So in my opinion, stepping out of my criteria, I would say that today one can most likely get a good company at a fair price by becoming shareholder in Jarden Corporation. I will however not do it. Is that wrong by me?
If this analysis is outdated then you can request a new one.


No comments: