Fuller H B Co (NYSE: FUL)

Sector: Basic Materials Industry: Specialty Chemicals CIK: 0000039368
Market Cap 3.36 Bn
P/B 2.86
P/E 24.04
P/S 1.15
ROIC (Qtr) 6.66
Div Yield % 1.31
Rev 1y % (Qtr) -2.82
Total Debt (Qtr) 2.08 Bn
Debt/Equity (Qtr) 1.06

About

H.B. Fuller Company, commonly known as Fuller, operates as a leading global formulator, manufacturer, and marketer of adhesives, sealants, and other specialty chemical products. The company, which was established in 1887, is listed on the New York Stock Exchange (NYSE) under the ticker symbol FUL. It is a key player in the adhesives and sealants industry, and its operations span across North America, Europe, Latin America, Asia Pacific, India, the Middle East, and Africa. Fuller generates revenue by selling a variety of adhesives products, which...

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Price action

Investment thesis

Bull case

  • Operating cash flow of 242.41M provides exceptional 1138.06x coverage of minority interest expenses 213000, showing strong core operations.
  • Operating cash flow of 242.41M provides strong 10.81x coverage of stock compensation 22.42M, indicating sustainable incentive practices.
  • Cash position of 122.46M provides exceptional 574.92x coverage of minority interest expenses 213000, indicating strong liquidity.
  • Robust tangible asset base of 2.65B provides 4.24x coverage of working capital 626.51M, indicating strong operational backing.
  • Tangible assets of 2.65B provide robust 12.36x coverage of other current liabilities 214.82M, indicating strong asset backing.

Bear case

  • Operating cash flow of 242.41M barely covers its investment activities of (203.93M), with a coverage ratio of -1.19, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 122.46M against inventory of 502.96M, the 0.24 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 242.41M provides thin coverage of dividend payments of (49.72M) with a -4.88 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 122.46M provide limited coverage of acquisition spending of (86.16M), which is -1.42x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 312.12M show weak coverage of depreciation charges of 178.84M, with a 1.75 ratio indicating high capital intensity and potential reinvestment needs.

Geographical Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Specialty Chemicals
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 LIN Linde Plc 218.63 Bn 38.41 6.61 25.93 Bn
2 SHW Sherwin Williams Co 110.34 Bn 170.54 11.54 13.58 Bn
3 ECL Ecolab Inc. 80.35 Bn 80.18 5.93 8.67 Bn
4 APD Air Products & Chemicals, Inc. 56.37 Bn 48.29 5.86 18.31 Bn
5 PPG Ppg Industries Inc 34.00 Bn 31.05 2.58 7.91 Bn
6 LYB LyondellBasell Industries N.V. 17.46 Bn 5.03 0.49 13.22 Bn
7 DD DuPont de Nemours, Inc. 16.63 Bn 3.65 0.32 8.90 Bn
8 ALB Albemarle Corp 14.44 Bn 48.94 6.36 3.63 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.06 1.52
EV to Cash from Ops. EV/CFO 17.79 12.52
EV to Debt EV to Debt 2.62 13.65
EV to EBIT EV/EBIT 18.87 21.45
EV to EBITDA EV/EBITDA 14.35 14.82
EV to Free Cash Flow [EV/FCF] EV/FCF 22.36 29.24
EV to Market Cap EV to Market Cap 1.62 3.84
EV to Revenue EV/Rev 1.87 89.11
Price to Book Value [P/B] P/B 2.86 5.48
Price to Earnings [P/E] P/E 24.04 16.02
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.31 -5.31
Dividend Payout Ratio % Div Payout % (Qtr) 43.60 -75.74
Dividend per Basic Share Div per Share (Qtr) 0.92 1.25
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 40.72 23.50
Interest Coverage Int. cover (Qtr) 2.33 -8.92
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 0.40 -1.67
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -6.81 72.99
Dividend Growth (1y) % Div 1y % (Qtr) 7.02 -3.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -25.74 -31.21
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -7.71 51.49
EBIT Growth (1y) % EBIT 1y % (Qtr) -23.16 0.57
EBT Growth (1y) % EBT 1y % (Qtr) -34.90 -80.35
EPS Growth (1y) % EPS 1y % (Qtr) -37.13 -90.82
FCF Growth (1y) % FCF 1y % (Qtr) -52.57 -50.40
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -0.69 219.02
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.68 0.70
Cash Payout Ratio Cash Payout (Qtr) 0.14 0.41
Cash Ratio Cash Ratio (Qtr) 0.18 1.28
Current Ratio Curr Ratio (Qtr) 1.93 3.42
Debt to Equity Ratio Debt/Equity (Qtr) 1.06 0.92
Interest Cover Ratio Int Coverage (Qtr) 2.33 -8.92
Times Interest Earned Times Interest Earned (Qtr) 2.33 -8.92
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 14.00 -333.97
EBIT Margin % EBIT Margin % (Qtr) 8.91 -374.34
EBT Margin % EBT Margin % (Qtr) 5.08 -379.75
Gross Margin % Gross Margin % (Qtr) 30.40 29.26
Net Profit Margin % Net Margin % (Qtr) 3.30 -380.67