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Category: Stock Market and Brady Corp
Date: 22 November 2019 Stock Price: $55.33 We take a look at the 1st quarter earnings for their 2020 fiscal year of Brady Corporation a company that provides solutions to identify and protect people.
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About Brady Corporation
Brady Corporation is an international manufacturer and marketer of complete solutions that identify and protect people, products and places. Brady’s products help customers increase safety, security, productivity and performance and include high-performance labels, signs, safety devices, printing systems and software. Founded in 1914, the Company has a diverse customer base in electronics, telecommunications, manufacturing, electrical, construction, medical, aerospace and a variety of other industries.
Brady is headquartered in Milwaukee, Wisconsin and as of July 31, 2018, employed approximately 6,200 people in its worldwide businesses. Brady’s fiscal 2018 sales were approximately $1.17 billion. Brady stock trades on the New York Stock Exchange under the symbol BRC. More information is available at www.bradycorp.com.
The image below shows the geographical presence of Brady Corporation
Brady is headquartered in Milwaukee, Wisconsin and as of July 31, 2018, employed approximately 6,200 people in its worldwide businesses. Brady’s fiscal 2018 sales were approximately $1.17 billion. Brady stock trades on the New York Stock Exchange under the symbol BRC. More information is available at www.bradycorp.com.
The image below shows the geographical presence of Brady Corporation
Overview of Brady Corporation's 1st quarter 2020 earnings report
The numbers we are interested in (for the quarter):
- Net sales: $286.947 million (down from $293.196 million from the same quarter of the previous year)
- Net sales increased by -2.1% over the last 12 months
- Cost of goods sold : $145.542 million (up from $146.647 million for the same quarter of the previous year)
- Cost of goods sold increased by -0.75% over the last 12 months
- Net income: $37.498 million (up from from $30.637 million for the same quarter of the previous year)
- Diluted earnings per share: $0.70 (up from $0.58 for the same quarter of the previous year)
- PE ratio of Brady Corporation: 19.7
- Diluted weighted-average shares outstanding: 53.736 million (up from 52.958 million for the same quarter of the previous year)
- Dividend declared this quarter: $0.22 (up from $0.21 declared for the same quarter of the previous year)
- Dividend yield: 1.59% (based on the dividend declared for the full fiscal year)
- Cash and cash equivalents: $295.093 million
- Cash and cash equivalents per share: $5.49
- Cash and cash equivalents makes up9.92% of Brady Corporation's current market capital
- Cash and cash equivalents makes up 23.9% of Brady Corporation's total assets
- Accounts receivable: $162.561 million (up from $158.114 million for the same quarter of the previous year)
- Accounts receivable makes up 13.2% of Brady Corporation's total assets
- Accounts receivable increased by 2.8% over the last 12 months
- Cash generated from operations: $131.258 million (for the year)
- Cash generated from operations per share: $2.44
- Total stockholders' equity of Brady Corporation: $876.535 million
- Stockholders' equity per share: $16.31
- So Brady Corporation is trading at 3.4 times its stockholders equity per share which is within the expected range of between 2 and 4 times that most firms tend to trade at
Brady Corporation's management commentary on their 3rd quarter 2020 earnings and guidance
MILWAUKEE, Nov. 21, 2019 (GLOBE NEWSWIRE) -- Brady Corporation (NYSE: BRC) (“Brady” or “Company”), a world leader in identification solutions, today reported its financial results for its fiscal 2020 first quarter ended October 31, 2019.
“This quarter marks our 17th consecutive quarter of year-on-year pre-tax earnings growth. Our investment in innovative new products to provide increased value to our customers while executing efficiencies throughout our manufacturing facilities and SG&A structure continue to drive our improved financial results,” said Brady’s President and Chief Executive Officer, J. Michael Nauman. “We see signs of a weakening industrial economic environment, which makes our commitment to the execution of sustainable efficiency gains throughout our businesses essential this fiscal year. Our priorities for fiscal 2020 are consistent with what has allowed us to deliver improved financial results the last four years, which we believe position us well for strong revenue and earnings growth as our end markets recover from the recent macro-economic weakness.”
“Cash provided by operating activities was $38.8 million this quarter and we finished in a net cash position of nearly $245 million at October 31, 2019, an increase of $107 million since October 31, 2018. Our balance sheet continues to provide significant flexibility for future investment and to return funds to our shareholders, which puts Brady in a strong financial position,” said Brady’s Chief Financial Officer, Aaron Pearce.
“This quarter marks our 17th consecutive quarter of year-on-year pre-tax earnings growth. Our investment in innovative new products to provide increased value to our customers while executing efficiencies throughout our manufacturing facilities and SG&A structure continue to drive our improved financial results,” said Brady’s President and Chief Executive Officer, J. Michael Nauman. “We see signs of a weakening industrial economic environment, which makes our commitment to the execution of sustainable efficiency gains throughout our businesses essential this fiscal year. Our priorities for fiscal 2020 are consistent with what has allowed us to deliver improved financial results the last four years, which we believe position us well for strong revenue and earnings growth as our end markets recover from the recent macro-economic weakness.”
“Cash provided by operating activities was $38.8 million this quarter and we finished in a net cash position of nearly $245 million at October 31, 2019, an increase of $107 million since October 31, 2018. Our balance sheet continues to provide significant flexibility for future investment and to return funds to our shareholders, which puts Brady in a strong financial position,” said Brady’s Chief Financial Officer, Aaron Pearce.
Fiscal 2020 Guidance:
The Company is increasing its full year fiscal 2020 earnings per diluted Class A Nonvoting Common Share guidance from its previous range of $2.45 to $2.55 to a range of $2.50 to $2.60 due to a reduction in its income tax rate. Included in this guidance is organic sales growth of approximately 1.5 to 2.5 percent, a full-year income tax rate of approximately 20 percent, and depreciation and amortization of approximately $25 million. The Company expects to achieve efficiency gains in its manufacturing facilities and in selling, general and administrative expenses. Capital expenditures are expected to be approximately $35 million during the year ending July 31, 2020. This guidance is based upon foreign currency exchange rates as of October 31, 2019.
The Company is increasing its full year fiscal 2020 earnings per diluted Class A Nonvoting Common Share guidance from its previous range of $2.45 to $2.55 to a range of $2.50 to $2.60 due to a reduction in its income tax rate. Included in this guidance is organic sales growth of approximately 1.5 to 2.5 percent, a full-year income tax rate of approximately 20 percent, and depreciation and amortization of approximately $25 million. The Company expects to achieve efficiency gains in its manufacturing facilities and in selling, general and administrative expenses. Capital expenditures are expected to be approximately $35 million during the year ending July 31, 2020. This guidance is based upon foreign currency exchange rates as of October 31, 2019.
Brady Corporation (NYSE: BRC) stock price history
The image below, obtained from Google, shows the stock price history of Brady Corporation for the last 5 years. 5 years ago Brady Corporation stock was trading at around $25 and its currently trading at $55.33 a stock. So the stock of Brady Corp has grown by just over 121% over the last 5 years. The stock of Brady Corp is trading at a lot closer to its 52 week high of $58.83 than it is to its 52 week low of $40.04 which to us is a clear indication that the short term sentiment and trend in Brady Corporation stock price is positive.
Recent coverage of Brady Corporation
The extract below covers the latest regarding Brady Corp as obtained from TheStreet.com
MILWAUKEE, Nov. 20, 2019 (GLOBE NEWSWIRE) -- Brady Corporation (NYSE: BRC) ("Company") announced that shareholders of the Company's Class B Common Voting Stock have voted unanimously in favor of the election of the director nominees to a one-year term at the Company's annual meeting of shareholders held today in Milwaukee. At the Board of Directors meeting on November 19, 2019, the Board declared a dividend to shareholders of the Company's Class A Common Stock of $0.2175 per share, payable on January 31, 2020, to shareholders of record at the close of business on January 10, 2020. Elected to the Brady Corporation Board of Directors are:
Brady Corporation is an international manufacturer and marketer of complete solutions that identify and protect people, products and places. Brady's products help customers increase safety, security, productivity and performance and include high-performance labels, signs, safety devices, printing systems and software. Founded in 1914, the Company has a diverse customer base in electronics, telecommunications, manufacturing, electrical, construction, medical, aerospace and a variety of other industries
Read the original article here
MILWAUKEE, Nov. 20, 2019 (GLOBE NEWSWIRE) -- Brady Corporation (NYSE: BRC) ("Company") announced that shareholders of the Company's Class B Common Voting Stock have voted unanimously in favor of the election of the director nominees to a one-year term at the Company's annual meeting of shareholders held today in Milwaukee. At the Board of Directors meeting on November 19, 2019, the Board declared a dividend to shareholders of the Company's Class A Common Stock of $0.2175 per share, payable on January 31, 2020, to shareholders of record at the close of business on January 10, 2020. Elected to the Brady Corporation Board of Directors are:
- Patrick W. Allender, Executive Vice President and Chief Financial Officer (Retired), Danaher Corporation
- Gary S. Balkema, President (Retired), Worldwide Consumer Care Division, Bayer AG
- Dr. David S. Bem, Vice President of Science and Technology and Chief Technology Officer, PPG Industries, Inc.
- Dr. Elizabeth Bruno, President, Brady Education Foundation; Research Associate Professor, University of North Carolina at Chapel Hill
- Nancy Lee Gioia, Director, Global Connectivity, Electrical and User Experience (Retired), Ford Motor Company
- Conrad G. Goodkind, Partner (Retired) in the law firm of Quarles and Brady, LLP
- Dr. Frank W. Harris, President and Chief Executive Officer, Akron Polymer Systems
- Bradley C. Richardson, Executive Vice President and Chief Financial Officer, PolyOne Corporation
- Dr. Michelle E. Williams, Global Group President, Altuglas International, an affiliate of Arkema S.A.
- J. Michael Nauman, President and Chief Executive Officer, Brady Corporation.
Brady Corporation is an international manufacturer and marketer of complete solutions that identify and protect people, products and places. Brady's products help customers increase safety, security, productivity and performance and include high-performance labels, signs, safety devices, printing systems and software. Founded in 1914, the Company has a diverse customer base in electronics, telecommunications, manufacturing, electrical, construction, medical, aerospace and a variety of other industries
Read the original article here
Brady Corporation (NYSE: BRC) latest stock valuation
So based on the earnings release of Brady Corporation what do we value the stock of the group at? Based on Brady Corporation's 1st quarter 2020 earnings report our valuation model provides a target (full value) price for Brady Corporation stock of $47.30 (down from our 4th quarter 2019 earnings report valuation on Brady Corporation).
Based on our target (full value) price we believe that Brady Corporation stock is overvalued. We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price, which in this case is $47.30. We therefore believe a good entry point into Brady Corporation's stock is at $42.60 or below. We expect the stock of Brady Corporation to pull back from current levels to levels closer to our target (full value) price in coming weeks and months.
Based on our target (full value) price we believe that Brady Corporation stock is overvalued. We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price, which in this case is $47.30. We therefore believe a good entry point into Brady Corporation's stock is at $42.60 or below. We expect the stock of Brady Corporation to pull back from current levels to levels closer to our target (full value) price in coming weeks and months.
Next earnings release for Brady Corporation
It is expected that Brady Corporation will release their 2nd quarter 2020 earnings report towards the end of February 2020