Parker-Hannifin Corp (NYSE: PH)

Sector: Industrials Industry: Specialty Industrial Machinery CIK: 0000076334
Market Cap 135.87 Bn
P/B 29.24
P/E 165.29
P/S 12.09
ROIC (Qtr) 14.12
Div Yield % 0.43
Rev 1y % (Qtr) 9.09
Total Debt (Qtr) 9.87 Bn
Debt/Equity (Qtr) 0.69
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About

Investment thesis

Bull case

  • Operating cash flow of 3.74B provides exceptional 4765.95x coverage of minority interest expenses 785000, showing strong core operations.
  • Operating cash flow of 3.74B provides strong 23.31x coverage of stock compensation 160.53M, indicating sustainable incentive practices.
  • Robust free cash flow of 3.39B exceeds capital expenditure of 350.77M by 9.67x, indicating strong organic growth funding capability.
  • Cash position of 427M provides exceptional 543.95x coverage of minority interest expenses 785000, indicating strong liquidity.
  • Robust tangible asset base of 11.75B provides 10.62x coverage of working capital 1.11B, indicating strong operational backing.

Bear case

  • Operating cash flow of 3.74B barely covers its investment activities of (1.33B), with a coverage ratio of -2.80, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 427M against inventory of 3.15B, the 0.14 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 3.74B provides thin coverage of dividend payments of (896.94M) with a -4.17 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 427M provide limited coverage of acquisition spending of (1.01B), which is -0.42x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Retained earnings of 22.97B provide limited buffer against comprehensive income items of (903M), which is -25.44x, indicating elevated exposure to market risks.

Segments Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Specialty Industrial Machinery
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GEV GE Vernova Inc. 224.93 Bn 194.57 6.14 0.00 Bn
2 ETN Eaton Corp plc 153.13 Bn 38.99 5.75 11.22 Bn
3 PH Parker-Hannifin Corp 135.87 Bn 165.29 12.09 9.87 Bn
4 EMR Emerson Electric Co 111.68 Bn 47.10 4.65 13.41 Bn
5 ITW Illinois Tool Works Inc 86.68 Bn 28.27 5.40 8.97 Bn
6 CMI Cummins Inc 82.13 Bn 28.89 2.44 7.55 Bn
7 AME Ametek Inc/ 53.79 Bn 36.34 7.27 2.28 Bn
8 ROK Rockwell Automation, Inc 43.80 Bn 44.24 5.11 3.68 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 4.51 2.28
EV to Cash from Ops. EV/CFO 105.52 37.14
EV to Debt EV to Debt 13.95 34.39
EV to EBIT EV/EBIT 108.77 27.71
EV to EBITDA EV/EBITDA 91.25 25.34
EV to Free Cash Flow [EV/FCF] EV/FCF 116.58 133.36
EV to Market Cap EV to Market Cap 1.01 1.04
EV to Revenue EV/Rev 12.26 39.88
Price to Book Value [P/B] P/B 29.24 6.22
Price to Earnings [P/E] P/E 165.29 143.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 3.94 2.57
Dividend Payout Ratio % Div Payout % (Qtr) 25.30 15.73
Dividend per Basic Share Div per Share (Qtr) 7.03 0.91
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 26.16 82.53
Interest Coverage Int. cover (Qtr) 11.37 12.34
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 10.35 -45.99
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 7.96 118.48
Dividend Growth (1y) % Div 1y % (Qtr) 10.36 10.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 10.06 -283.03
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 7.77 -36.87
EBIT Growth (1y) % EBIT 1y % (Qtr) 3.81 -80.72
EBT Growth (1y) % EBT 1y % (Qtr) 5.63 -120.93
EPS Growth (1y) % EPS 1y % (Qtr) 13.24 -39.22
FCF Growth (1y) % FCF 1y % (Qtr) 2.13 85.55
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 6.13 0.87
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.67 0.62
Cash Payout Ratio Cash Payout (Qtr) 0.22 0.10
Cash Ratio Cash Ratio (Qtr) 0.07 3.01
Current Ratio Curr Ratio (Qtr) 1.18 4.97
Debt to Equity Ratio Debt/Equity (Qtr) 0.69 0.38
Interest Cover Ratio Int Coverage (Qtr) 11.37 12.34
Times Interest Earned Times Interest Earned (Qtr) 11.37 12.34
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 26.80 -7,291.27
EBIT Margin % EBIT Margin % (Qtr) 22.34 -7,413.30
EBT Margin % EBT Margin % (Qtr) 20.38 -9,015.79
Gross Margin % Gross Margin % (Qtr) 37.30 -32.61
Net Profit Margin % Net Margin % (Qtr) 17.30 -7,962.06