Tiffany & Co Valuation – February 2019 $TIF

Company Profile (excerpt from Reuters): Tiffany & Co., incorporated on August 16, 1984, is a holding company that operates through its subsidiary companies. The Company’s principal subsidiary, Tiffany and Company (Tiffany), is a jeweler and specialty retailer. Through its subsidiaries, the Company designs and manufactures products and operates TIFFANY & CO. retail stores around the world, and also sells its products through Internet, catalog, business-to-business and wholesale operations. The Company’s segments include Americas, Asia-Pacific, Japan, Europe and Other. The Company also sells timepieces, leather goods, sterling silverware, china, crystal, stationery, fragrances and accessories.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of TIF – February 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $10,742,782,275 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 5.86 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 33.17% Fail
6. Moderate PEmg Ratio PEmg < 20 23.33 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 3.59 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 5.86 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.29 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $3.78
MG Growth Estimate 4.44%
MG Value $65.64
Opinion Overvalued
MG Grade C+
MG Value based on 3% Growth $54.76
MG Value based on 0% Growth $32.10
Market Implied Growth Rate 7.41%
Current Price $88.10
% of Intrinsic Value 134.21%

Tiffany & Co. is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings growth over the last ten years, and the high PEmg and PB ratios. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $2.91 in 2015 to an estimated $3.78 for 2019. This level of demonstrated earnings growth does not support the market’s implied estimate of 7.41% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Tiffany & Co. revealed the company was trading above its Graham Number of $52.13. The company pays a dividend of $1.95 per share, for a yield of 2.2%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 23.33, which was below the industry average of 27.33, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $12.43.

Tiffany & Co. receives an average overall rating in the ModernGraham grading system, scoring a C+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) $12.43
Graham Number $52.13
PEmg 23.33
Current Ratio 5.86
PB Ratio 3.59
Current Dividend $1.95
Dividend Yield 2.21%
Number of Consecutive Years of Dividend Growth 15

Useful Links:

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Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 10/1/2018
Total Current Assets $3,608,500,000
Total Current Liabilities $615,500,000
Long-Term Debt $880,000,000
Total Assets $5,100,700,000
Intangible Assets $0
Total Liabilities $2,078,300,000
Shares Outstanding (Diluted Average) 123,100,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $4.65
Jan2018 $2.96
Jan2017 $3.55
Jan2016 $3.59
Jan2015 $3.73
Jan2014 $1.41
Jan2013 $3.25
Jan2012 $3.40
Jan2011 $2.87
Jan2010 $2.11
Jan2009 $1.74
Jan2008 $2.34
Jan2007 $1.80
Jan2006 $1.75
Jan2005 $2.05
Jan2004 $1.45
Jan2003 $1.28
Jan2002 $1.15
Jan2001 $1.26
Jan2000 $0.97
Jan1999 $0.63

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $3.78
Jan2018 $3.24
Jan2017 $3.29
Jan2016 $3.13
Jan2015 $2.91
Jan2014 $2.54
Jan2013 $2.96
Jan2012 $2.71
Jan2011 $2.30
Jan2010 $1.99
Jan2009 $1.93
Jan2008 $1.98
Jan2007 $1.76
Jan2006 $1.67
Jan2005 $1.56
Jan2004 $1.29
Jan2003 $1.16

Recommended Reading:

Other ModernGraham posts about the company

Tiffany & Co. Valuation – April 2018 $TIF
Tiffany & Co Valuation – August 2016 $TIF
Tiffany & Company Valuation – February 2016 Update $TIF
Tiffany and Company Valuation – October 2015 Update $TIF
Tiffany & Company Analysis – July 2015 Update $TIF

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Walmart Inc Valuation – November 2018 $WMT
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Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

International Flavors & Fragrances Inc Valuation – January 2019 $IFF

Company Profile (excerpt from Reuters): International Flavors & Fragrances Inc., incorporated on December 6, 1909, creates, manufactures and supplies flavors and fragrances (including cosmetic active ingredients) used to impart or improve flavor or fragrance in a range of consumer products. The Company operates in two segments: Flavors and Fragrances. The Flavors segment offers flavor compounds that are sold to the food and beverage industries for use in consumer products, such as prepared foods, beverages, dairy, food and sweet products. The Fragrances segment offers fragrance compounds and fragrance ingredients. Its cosmetic active ingredients consist of active and functional ingredients, botanicals and delivery systems to support its customers’ cosmetic and personal care product lines. The Company’s products are sold to manufacturers of perfumes and cosmetics, hair and other personal care products, soaps and detergents, cleaning products, dairy, meat and other processed foods, beverages, snacks and savory foods, sweet and baked goods, and pharmaceutical and oral care products. As of December 31, 2016, the Company had 42 manufacturing facilities and over 70 creative centers and application laboratories located in over 35 countries that support over 35,000 products. Its manufacturing facilities are located in the United States, the Netherlands, Spain, Great Britain, Turkey, Brazil, Mexico, Australia, China, India and Singapore.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of IFF – January 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $14,388,233,724 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 9.16 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 56.57% Pass
6. Moderate PEmg Ratio PEmg < 20 28.17 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.73 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 9.16 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.70 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $4.79
MG Growth Estimate 2.52%
MG Value $64.90
Opinion Overvalued
MG Grade C
MG Value based on 3% Growth $69.46
MG Value based on 0% Growth $40.72
Market Implied Growth Rate 9.83%
Current Price $134.95
% of Intrinsic Value 207.92%

International Flavors & Fragrances Inc is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the high PEmg and PB ratios. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $4.1 in 2014 to an estimated $4.79 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 9.83% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into International Flavors & Fragrances Inc revealed the company was trading above its Graham Number of $50.39. The company pays a dividend of $2.66 per share, for a yield of 2% Its PEmg (price over earnings per share – ModernGraham) was 28.17, which was below the industry average of 45.62, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $16.77.

International Flavors & Fragrances Inc receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) $16.77
Graham Number $50.39
PEmg 28.17
Current Ratio 9.16
PB Ratio 2.73
Current Dividend $2.66
Dividend Yield 1.97%
Number of Consecutive Years of Dividend Growth 15

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2018
Total Current Assets $6,946,827,000
Total Current Liabilities $758,456,000
Long-Term Debt $4,331,242,000
Total Assets $9,615,542,000
Intangible Assets $1,538,439,000
Total Liabilities $5,577,593,000
Shares Outstanding (Diluted Average) 81,647,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $5.29
Dec2017 $3.72
Dec2016 $5.05
Dec2015 $5.16
Dec2014 $5.06
Dec2013 $4.29
Dec2012 $3.09
Dec2011 $3.26
Dec2010 $3.26
Dec2009 $2.46
Dec2008 $2.86
Dec2007 $2.82
Dec2006 $2.48
Dec2005 $2.04
Dec2004 $2.05
Dec2003 $1.83
Dec2002 $1.84
Dec2001 $1.20
Dec2000 $1.22
Dec1999 $1.53
Dec1998 $1.90

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $4.79
Dec2017 $4.58
Dec2016 $4.85
Dec2015 $4.56
Dec2014 $4.10
Dec2013 $3.50
Dec2012 $3.07
Dec2011 $3.02
Dec2010 $2.86
Dec2009 $2.61
Dec2008 $2.61
Dec2007 $2.40
Dec2006 $2.15
Dec2005 $1.92
Dec2004 $1.78
Dec2003 $1.61
Dec2002 $1.51

Recommended Reading:

Other ModernGraham posts about the company

International Flavors & Fragrances Inc Valuation – March 2018 $IFF
9 Best Stocks For Value Investors This Week – 6/24/16
International Flavors & Fragrances Inc Valuation – June 2016 $IFF
13 Best Stocks For Value Investors This Week – 12/12/15
International Flavors & Fragrances Valuation – December 2015 Update $IFF

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Avon Products Inc Valuation – June 2018 $AVP
Colgate-Palmolive Co Valuation – June 2018 $CL
Coty Inc Valuation – May 2018 $COTY
Church & Dwight Co Inc Valuation – April 2018 $CHD
Kimberly-Clark Corp Valuation – March 2018 $KMB

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Cleveland-Cliffs Inc Valuation – July 2018 $CLF

Company Profile (excerpt from Reuters): Cleveland-Cliffs Inc, formerly Cliffs Natural Resources Inc., incorporated on February 22, 1985, is a mining and natural resources company. The Company is a supplier of iron ore pellets to the North American steel industry from its mines and pellet plants located in Michigan and Minnesota. The Company’s segments include U.S. Iron Ore and Asia Pacific Iron Ore. In addition, the Company operates an iron ore mining complex in Western Australia. In the United States, the Company owned four operational iron ore mines and one indefinitely idled mine, as of December 31, 2016.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of CLF – July 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $3,185,660,788 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 3.26 Pass
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -82.43% Fail
6. Moderate PEmg Ratio PEmg < 20 -3.75 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 -10.49 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 3.26 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 2.14 Fail
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg -$2.85
MG Growth Estimate 12.04%
MG Value $0.00
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth -$41.28
MG Value based on 0% Growth -$24.20
Market Implied Growth Rate -6.12%
Current Price $10.67
% of Intrinsic Value N/A

Cleveland-Cliffs Inc does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability or growth over the last ten years, and the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the net current assets, and the lack of earnings stability over the last five years, and the lack of dividends. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $-14.44 in 2014 to an estimated $-2.85 for 2018. This level of negative earnings does not support a positive valuation.As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Cleveland-Cliffs Inc revealed the company was trading above its Graham Number of $0. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was -3.75, which was below the industry average of 46.07, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-6.01.

Cleveland-Cliffs Inc scores quite poorly in the ModernGraham grading system, with an overall grade of D.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$6.01
Graham Number $0.00
PEmg -3.75
Current Ratio 3.26
PB Ratio -10.49
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2018
Total Current Assets $1,546,900,000
Total Current Liabilities $474,900,000
Long-Term Debt $2,297,000,000
Total Assets $3,051,500,000
Intangible Assets $49,300,000
Total Liabilities $3,357,800,000
Shares Outstanding (Diluted Average) 301,275,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.49
Dec2017 $1.26
Dec2016 $0.87
Dec2015 -$5.14
Dec2014 -$47.52
Dec2013 $2.37
Dec2012 -$6.32
Dec2011 $11.48
Dec2010 $7.49
Dec2009 $1.63
Dec2008 $4.76
Dec2007 $2.57
Dec2006 $2.60
Dec2005 $2.50
Dec2004 $2.95
Dec2003 -$0.40
Dec2002 -$2.33
Dec2001 -$0.29
Dec2000 $0.22
Dec1999 $0.05
Dec1998 $0.63

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate -$2.85
Dec2017 -$6.55
Dec2016 -$10.69
Dec2015 -$13.99
Dec2014 -$14.44
Dec2013 $2.51
Dec2012 $2.99
Dec2011 $6.96
Dec2010 $4.40
Dec2009 $2.84
Dec2008 $3.32
Dec2007 $2.42
Dec2006 $1.91
Dec2005 $1.21
Dec2004 $0.39
Dec2003 -$0.78
Dec2002 -$0.76

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Other ModernGraham posts about the company

5 of the Worst Stocks to Invest In – January 2017
Cliffs Natural Resources Inc Valuation – January 2017 $CLF
Cliffs Natural Resources Inc. Analysis – August 2015 Update $CLF
18 Companies to Research This Week – 8/30/2014
Cliffs Natural Resources Inc. Annual Valuation – 2014 $CLF

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Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Tiffany & Co. Valuation – April 2018 $TIF

Company Profile (excerpt from Reuters): Tiffany & Co., incorporated on August 16, 1984, is a holding company that operates through its subsidiary companies. The Company’s principal subsidiary, Tiffany and Company (Tiffany), is a jeweler and specialty retailer. Through its subsidiaries, the Company designs and manufactures products and operates TIFFANY & CO. retail stores around the world, and also sells its products through Internet, catalog, business-to-business and wholesale operations. The Company’s segments include Americas, Asia-Pacific, Japan, Europe and Other. The Company also sells timepieces, leather goods, sterling silverware, china, crystal, stationery, fragrances and accessories.

TIF Chart

TIF data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of TIF – April 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $11,890,010,196 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 5.50 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 26.73% Fail
6. Moderate PEmg Ratio PEmg < 20 26.57 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 3.70 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 5.50 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.27 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $3.60
MG Growth Estimate 3.51%
MG Value $55.85
Opinion Overvalued
MG Grade C+
MG Value based on 3% Growth $52.15
MG Value based on 0% Growth $30.57
Market Implied Growth Rate 9.04%
Current Price $95.58
% of Intrinsic Value 171.14%

Tiffany & Co. is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings growth over the last ten years, and the high PEmg and PB ratios. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $2.91 in 2015 to an estimated $3.6 for 2019. This level of demonstrated earnings growth does not support the market’s implied estimate of 9.04% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Tiffany & Co. revealed the company was trading above its Graham Number of $49.01. The company pays a dividend of $1.95 per share, for a yield of 2% Its PEmg (price over earnings per share – ModernGraham) was 26.57, which was below the industry average of 34.38, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $13.98.

Tiffany & Co. receives an average overall rating in the ModernGraham grading system, scoring a C+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) $13.98
Graham Number $49.01
PEmg 26.57
Current Ratio 5.50
PB Ratio 3.70
Current Dividend $1.95
Dividend Yield 2.04%
Number of Consecutive Years of Dividend Growth 15

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 1/1/2018
Total Current Assets $3,983,300,000
Total Current Liabilities $724,800,000
Long-Term Debt $882,900,000
Total Assets $5,468,100,000
Intangible Assets $66,700,000
Total Liabilities $2,234,700,000
Shares Outstanding (Diluted Average) 125,100,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $4.11
Jan2018 $2.96
Jan2017 $3.55
Jan2016 $3.59
Jan2015 $3.73
Jan2014 $1.41
Jan2013 $3.25
Jan2012 $3.40
Jan2011 $2.87
Jan2010 $2.11
Jan2009 $1.74
Jan2008 $2.34
Jan2007 $1.80
Jan2006 $1.75
Jan2005 $2.05
Jan2004 $1.45
Jan2003 $1.28
Jan2002 $1.15
Jan2001 $1.26
Jan2000 $0.97
Jan1999 $0.63

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $3.60
Jan2018 $3.24
Jan2017 $3.29
Jan2016 $3.13
Jan2015 $2.91
Jan2014 $2.54
Jan2013 $2.96
Jan2012 $2.71
Jan2011 $2.30
Jan2010 $1.99
Jan2009 $1.93
Jan2008 $1.98
Jan2007 $1.76
Jan2006 $1.67
Jan2005 $1.56
Jan2004 $1.29
Jan2003 $1.16

Recommended Reading:

Other ModernGraham posts about the company

Tiffany & Company Valuation – February 2016 Update $TIF
Tiffany and Company Valuation – October 2015 Update $TIF
Tiffany & Company Analysis – July 2015 Update $TIF
27 Companies in the Spotlight This Week – 4/4/15
Tiffany & Company Quarterly Valuation – March 2015 $TIF

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Nordstrom Inc Valuation – February 2018 $JWN
Walmart Inc Valuation – February 2018 $WMT
Costco Wholesale Corp Valuation – September 2017 $COST
McKesson Corp Valuation – August 2017 $MCK
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Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

International Flavors & Fragrances Inc Valuation – March 2018 $IFF

Company Profile (obtained from Marketwatch): International Flavors & Fragrances, Inc. engages in the creation, manufacture, and supply of flavors and fragrances that are used in the food, beverage, personal care, and household products industries. It operates through the Flavors and Fragrances segments. The Flavors segment involves in building blocks that impart taste experiences in food and beverage products. The Fragrances segment offers creation of fragrance compounds that are integral elements in the perfumes and consumer products, within fabric care, home care, personal wash, hair care, and toiletries. The company was founded in 1958 and is headquartered in New York, NY.

IFF Chart

IFF data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of IFF – March 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $10,980,195,849 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.47 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 66.82% Pass
6. Moderate PEmg Ratio PEmg < 20 27.28 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 6.56 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.47 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.45 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $5.10
MG Growth Estimate 3.65%
MG Value $80.49
Opinion Overvalued
MG Grade C
MG Value based on 3% Growth $73.91
MG Value based on 0% Growth $43.33
Market Implied Growth Rate 9.39%
Current Price $139.03
% of Intrinsic Value 172.72%

International Flavors & Fragrances Inc is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the high PEmg and PB ratios. The Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $4.1 in 2014 to an estimated $5.1 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 9.39% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into International Flavors & Fragrances Inc revealed the company was trading above its Graham Number of $54.58. The company pays a dividend of $2.66 per share, for a yield of 1.9% Its PEmg (price over earnings per share – ModernGraham) was 27.28, which was below the industry average of 30.22, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-12.82.

International Flavors & Fragrances Inc receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$12.82
Graham Number $54.58
PEmg 27.28
Current Ratio 2.47
PB Ratio 6.56
Current Dividend $2.66
Dividend Yield 1.91%
Number of Consecutive Years of Dividend Growth 15

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2017
Total Current Assets $1,896,544,000
Total Current Liabilities $768,768,000
Long-Term Debt $1,632,186,000
Total Assets $4,598,926,000
Intangible Assets $1,572,075,000
Total Liabilities $2,914,724,000
Shares Outstanding (Diluted Average) 79,421,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $6.21
Dec2017 $3.72
Dec2016 $5.05
Dec2015 $5.16
Dec2014 $5.06
Dec2013 $4.29
Dec2012 $3.09
Dec2011 $3.26
Dec2010 $3.26
Dec2009 $2.46
Dec2008 $2.86
Dec2007 $2.82
Dec2006 $2.48
Dec2005 $2.04
Dec2004 $2.05
Dec2003 $1.83
Dec2002 $1.84
Dec2001 $1.20
Dec2000 $1.22
Dec1999 $1.53
Dec1998 $1.90

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $5.10
Dec2017 $4.58
Dec2016 $4.85
Dec2015 $4.56
Dec2014 $4.10
Dec2013 $3.50
Dec2012 $3.07
Dec2011 $3.02
Dec2010 $2.86
Dec2009 $2.61
Dec2008 $2.61
Dec2007 $2.40
Dec2006 $2.15
Dec2005 $1.92
Dec2004 $1.78
Dec2003 $1.61
Dec2002 $1.51

Recommended Reading:

Other ModernGraham posts about the company

International Flavors & Fragrances Inc Valuation – June 2016 $IFF
13 Best Stocks For Value Investors This Week – 12/12/15
International Flavors & Fragrances Valuation – December 2015 Update $IFF
19 Best Stocks For Value Investors This Week – 8/29/15
International Flavors & Fragrances Inc. Analysis – August 2015 Update $IFF

Other ModernGraham posts about related companies

Estee Lauder Companies Inc Valuation – February 2018 $EL
Proctor & Gamble Co Valuation – February 2018 $PG
Colgate-Palmolive Co. Valuation – April 2017 $CL
Coty Inc Valuation – Initial Coverage $COTY
Signet Jewelers Ltd Valuation – Initial Coverage $SIG
Inter Parfums Inc Valuation – Initial Coverage $IPAR
Church & Dwight Co Inc Valuation – Initial Coverage $CHD
Service Corporation Intl Valuation – Initial Coverage $SCI
Avon Products Inc Valuation – July 2016 $AVP
Proctor & Gamble Co Valuation – July 2016 $PG

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Cliffs Natural Resources Inc Valuation – January 2017 $CLF

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – January 2017.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Cliffs Natural Resources Inc (CLF) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Cliffs Natural Resources Inc. is a mining and natural resources company. The Company is a supplier of iron ore pellets to the North American steel industry from its mines and pellet plants located in Michigan and Minnesota. The Company’s segments include U.S. Iron Ore and Asia Pacific Iron Ore. The Company is a producer of iron ore pellets, primarily selling production from U.S. Iron Ore to integrated steel companies in the United States and Canada. The Company manages approximately five iron ore mines located in Michigan and Minnesota. In Michigan, it is operating over two iron ore mines, Empire mine and Tilden mine. In Minnesota, it is operating approximately one iron ore mine, Hibbing mine. The other two iron ore operations in Minnesota, United Taconite mine and Northshore mine. Its Asia Pacific Iron Ore operations are located in Western Australia and consist of its Koolyanobbing operation. The Company operates an iron ore mining complex in Western Australia.

CLF Chart

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Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Recent valuations of the components of the Dow Jones Industrial Average are available for free members, including this one of Microsoft Corporation.  In addition, here is a post detailing what can be found within each individual company’s valuation.

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ModernGraham Valuation of CLF – January 2017

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $2,477,418,483 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.16 Pass
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -681.14% Fail
6. Moderate PEmg Ratio PEmg < 20 -0.89 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 -1.29 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.16 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 5.84 Fail
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Fail

Stage 2: Determination of Intrinsic Value

EPSmg -$10.78
MG Growth Estimate -4.25%
MG Value $0.00
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth -$156.37
MG Value based on 0% Growth -$91.66
Market Implied Growth Rate -4.70%
Current Price $9.65
% of Intrinsic Value N/A

Cliffs Natural Resources Inc does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability or growth over the last ten years, the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the net current assets, and the lack of earnings stability or growth over the last five years, and the lack of dividends. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after seeing its EPSmg (normalized earnings) decline from $2.99 in 2012 to an estimated $-10.78 for 2016. This level of negative earnings does not support a positive valuation.As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Cliffs Natural Resources Inc revealed the company was trading above its Graham Number of $0. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was -0.89, which was below the industry average of 35.02, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-12.69.

Cliffs Natural Resources Inc scores quite poorly in the ModernGraham grading system, with an overall grade of D.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$12.69
Graham Number $0.00
PEmg -0.89
Current Ratio 2.16
PB Ratio -1.29
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

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Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2016
Total Current Assets $699,600,000
Total Current Liabilities $323,500,000
Long-Term Debt $2,195,900,000
Total Assets $1,772,900,000
Intangible Assets $0
Total Liabilities $3,317,200,000
Shares Outstanding (Diluted Average) 206,279,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.58
Dec2015 -$5.13
Dec2014 -$47.52
Dec2013 $2.37
Dec2012 -$6.32
Dec2011 $11.48
Dec2010 $7.49
Dec2009 $1.63
Dec2008 $4.76
Dec2007 $2.57
Dec2006 $2.60
Dec2005 $2.50
Dec2004 $2.95
Dec2003 -$0.40
Dec2002 -$2.33
Dec2001 -$0.29
Dec2000 $0.22
Dec1999 $0.05
Dec1998 $0.63
Dec1997 $0.60
Dec1996 $0.65

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate -$10.78
Dec2015 -$13.99
Dec2014 -$14.44
Dec2013 $2.51
Dec2012 $2.99
Dec2011 $6.96
Dec2010 $4.40
Dec2009 $2.84
Dec2008 $3.32
Dec2007 $2.42
Dec2006 $1.91
Dec2005 $1.21
Dec2004 $0.39
Dec2003 -$0.78
Dec2002 -$0.76
Dec2001 $0.10
Dec2000 $0.34

Recommended Reading:

Other ModernGraham posts about the company

Cliffs Natural Resources Inc. Analysis – August 2015 Update $CLF
18 Companies to Research This Week – 8/30/2014
Cliffs Natural Resources Inc. Annual Valuation – 2014 $CLF

Other ModernGraham posts about related companies

Nucor Corporation Valuation – December 2016 $NUE
Nucor Corp Valuation – August 2016 $NUE
United States Steel Corp Valuation – July 2016 $X
Nucor Corp Valuation – February 2016 Update $NUE
Allegheny Technologies Inc. Valuation – November 2015 Update $ATI
Nucor Corporation Analysis – September 2015 Update $NUE
Cliffs Natural Resources Inc. Analysis – August 2015 Update $CLF
Nucor Corporation Analysis – June 2015 Update $NUE
Nucor Corporation Quarterly Valuation – March 2015 $NUE
United States Steel Corporation Annual Valuation – 2015 $X

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Tiffany & Co Valuation – August 2016 $TIF

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Companies Benjamin Graham Would Invest In Today - July 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Tiffany & Co (TIF) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Tiffany & Co. is a holding company that operates through its subsidiary companies. The Company’s principal subsidiary, Tiffany and Company (Tiffany), is a jeweler and specialty retailer. Through its subsidiaries, the Company designs and manufactures products and operates TIFFANY & CO. retail stores. The Company’s segments include Americas, Asia-Pacific, Japan, Europe and Other. The Americas segment includes sale in Company-operated TIFFANY & CO. stores in the United States, Canada and Latin America. The Asia-Pacific segment includes over 80 Company-operated TIFFANY & CO. stores in China, Korea, Hong Kong, Taiwan, Australia, Singapore, Macau, Malaysia and Thailand. The Japan segment includes approximately 60 Company-operated TIFFANY & CO. stores. The retail sales in Europe are transacted in over 40 Company-operated TIFFANY & CO. stores. The Other segment includes retail sales and wholesale distribution; wholesale sales of diamonds, and licensing agreements.

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TIF Chart

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Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

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ModernGraham Valuation of TIF – August 2016

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $8,174,289,116 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 4.91 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 76.53% Pass
6. Moderate PEmg Ratio PEmg < 20 19.73 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.74 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 4.91 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.28 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

TIF value chart August 2016

EPSmg $3.23
MG Growth Estimate 1.35%
MG Value $36.16
Opinion Overvalued
MG Grade B-
MG Value based on 3% Growth $46.81
MG Value based on 0% Growth $27.44
Market Implied Growth Rate 5.62%
Current Price $63.69
% of Intrinsic Value 176.14%

Tiffany & Co. qualifies for both the Defensive Investor and the Enterprising Investor. The Defensive Investor is only initially concerned with the high PB ratio. The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $2.96 in 2013 to an estimated $3.23 for 2017. This level of demonstrated earnings growth does not support the market’s implied estimate of 5.62% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value below the price.

Tiffany & Co. performs fairly well in the ModernGraham grading system, scoring a B-.

Stage 3: Information for Further Research

TIF charts August 2016

Net Current Asset Value (NCAV) $10.41
Graham Number $42.02
PEmg 19.73
Current Ratio 4.91
PB Ratio 2.74
Current Dividend $1.60
Dividend Yield 2.51%
Number of Consecutive Years of Dividend Growth 14

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Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 4/1/2016
Total Current Assets $3,522,200,000
Total Current Liabilities $717,800,000
Long-Term Debt $790,200,000
Total Assets $5,148,200,000
Intangible Assets $0
Total Liabilities $2,205,300,000
Shares Outstanding (Diluted Average) 126,500,000

Earnings Per Share History

Next Fiscal Year Estimate $3.36
Jan2016 $3.59
Jan2015 $3.73
Jan2014 $1.41
Jan2013 $3.25
Jan2012 $3.40
Jan2011 $2.87
Jan2010 $2.11
Jan2009 $1.74
Jan2008 $2.20
Jan2007 $1.80
Jan2006 $1.75
Jan2005 $2.05
Jan2004 $1.45
Jan2003 $1.28
Jan2002 $1.15
Jan2001 $1.26
Jan2000 $0.98
Jan1999 $0.63
Jan1998 $0.51
Jan1997 $0.42

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $3.23
Jan2016 $3.13
Jan2015 $2.91
Jan2014 $2.54
Jan2013 $2.96
Jan2012 $2.70
Jan2011 $2.28
Jan2010 $1.96
Jan2009 $1.90
Jan2008 $1.93
Jan2007 $1.76
Jan2006 $1.67
Jan2005 $1.56
Jan2004 $1.29
Jan2003 $1.16
Jan2002 $1.03
Jan2001 $0.90

Recommended Reading:

Other ModernGraham posts about the company

Tiffany and Company Valuation – October 2015 Update $TIF
Tiffany & Company Analysis – July 2015 Update $TIF
27 Companies in the Spotlight This Week – 4/4/15
Tiffany & Company Quarterly Valuation – March 2015 $TIF
26 Companies in the Spotlight This Week – 12/13/14

Other ModernGraham posts about related companies

Best Buy Co Valuation – July 2016 $BBY
GameStop Corp Valuation – July 2016 $GME
Urban Outfitters Inc Valuation – July 2016 $URBN
Macy’s Inc Valuation – July 2016 $M
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Amazon Inc Valuation – July 2016 $AMZN
Walgreens Boots Alliance Inc Valuation – July 2016 $WBA
McKesson Corp Valuation – July 2016 $MCK
Ross Stores Inc Valuation – June 2016 $ROST
Bed Bath & Beyond Inc Valuation – June 2016 $BBBY

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

International Flavors & Fragrances Inc Valuation – June 2016 $IFF

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Companies Benjamin Graham Would Invest In Today - June 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how International Flavors & Fragrances Inc (IFF) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): International Flavors & Fragrances Inc. (IFF) creates, manufactures and supplies flavors and fragrances (including cosmetic active ingredients) for the food, beverage, personal care and household products industries either in the form of compounds or individual ingredients. The Company operates in two segments: Flavors and Fragrances. The Flavors segment offers flavor compounds that are sold to the food and beverage industries for use in consumer products, such as prepared foods, beverages, food and sweet products. The Fragrances segment offers fragrance compounds and fragrance ingredients. It offers cosmetic active ingredients, which consists of active and functional ingredients, botanicals and delivery systems to support its customers’ cosmetic and personal care product lines. Its products are sold to manufacturers of perfumes and cosmetics, hair and other personal care products, cleaning products, dairy, sweet and baked goods, and pharmaceutical and oral care products.

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Downloadable PDF version of this valuation:

ModernGraham Valuation of IFF – June 2016

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $9,894,166,387 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.65 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 92.27% Pass
6. Moderate PEmg Ratio PEmg < 20 24.84 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 6.08 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.65 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.16 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

IFF value Chart June 2016

EPSmg $4.98
MG Growth Estimate 9.34%
MG Value $135.43
Opinion Fairly Valued
MG Grade C
MG Value based on 3% Growth $72.25
MG Value based on 0% Growth $42.35
Market Implied Growth Rate 8.17%
Current Price $123.76
% of Intrinsic Value 91.38%

International Flavors & Fragrances Inc is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the high PEmg and PB ratios. The Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Fairly Valued after growing its EPSmg (normalized earnings) from $3.07 in 2012 to an estimated $4.98 for 2016. This level of demonstrated earnings growth supports the market’s implied estimate of 8.17% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

International Flavors & Fragrances Inc receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

IFF Charts June 2016

Net Current Asset Value (NCAV) -$8.00
Graham Number $50.06
PEmg 24.84
Current Ratio 2.65
PB Ratio 6.08
Current Dividend $2.15
Dividend Yield 1.74%
Number of Consecutive Years of Dividend Growth 14

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2016
Total Current Assets $1,891,529,000
Total Current Liabilities $712,748,000
Long-Term Debt $1,369,955,000
Total Assets $4,162,460,000
Intangible Assets $1,253,265,000
Total Liabilities $2,532,096,000
Shares Outstanding (Diluted Average) 80,055,000

Earnings Per Share History

Next Fiscal Year Estimate $5.45
Dec2015 $5.16
Dec2014 $5.06
Dec2013 $4.29
Dec2012 $3.09
Dec2011 $3.26
Dec2010 $3.26
Dec2009 $2.46
Dec2008 $2.87
Dec2007 $2.82
Dec2006 $2.48
Dec2005 $2.04
Dec2004 $2.05
Dec2003 $1.83
Dec2002 $1.84
Dec2001 $1.20
Dec2000 $1.22
Dec1999 $1.53
Dec1998 $1.90
Dec1997 $1.99
Dec1996 $1.71

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $4.98
Dec2015 $4.56
Dec2014 $4.10
Dec2013 $3.50
Dec2012 $3.07
Dec2011 $3.02
Dec2010 $2.86
Dec2009 $2.62
Dec2008 $2.61
Dec2007 $2.40
Dec2006 $2.15
Dec2005 $1.92
Dec2004 $1.78
Dec2003 $1.61
Dec2002 $1.51
Dec2001 $1.42
Dec2000 $1.57

Recommended Reading:

Other ModernGraham posts about the company

13 Best Stocks For Value Investors This Week – 12/12/15
International Flavors & Fragrances Valuation – December 2015 Update $IFF
19 Best Stocks For Value Investors This Week – 8/29/15
International Flavors & Fragrances Inc. Analysis – August 2015 Update $IFF
International Flavors & Fragrances Inc. Quarterly Valuation – May 2015 $IFF

Other ModernGraham posts about related companies

Estee Lauder Companies Inc Valuation – May 2016 $EL
Colgate-Palmolive Co Valuation – January 2016 Update $CL
International Flavors & Fragrances Valuation – December 2015 Update $IFF
International Flavors & Fragrances Valuation – December 2015 Update $IFF
The Estee Lauder Company Valuation – October 2015 Update $EL
International Flavors & Fragrances Inc. Analysis – August 2015 Update $IFF
Estee Lauder Companies Analysis – August 2015 Update $EL
International Flavors & Fragrances Inc. Quarterly Valuation – May 2015 $IFF
Estee Lauder Companies Quarterly Valuation – April 2015 $EL
International Flavors & Fragrances Inc. Quarterly Valuation – February 2015 $IFF

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Tiffany & Company Valuation – February 2016 Update $TIF

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Most Undervalued Companies for the Defensive Investor – November 2015.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Tiffany & Company (TIF) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Tiffany & Co. is a holding company. The Company operates through its subsidiary companies. The Company’s principal product category is jewelry. The Company also sells timepieces, leather goods, sterling silver goods (other than jewelry), china, crystal, stationery, fragrances and accessories. Its brands include TIFFANY and TIFFANY & CO., as well as the TIFFANY BLUE BOX. Its segments include Americas, Asia-Pacific, Japan, Europe and Other. It operates e-commerce enabled Websites in 13 countries, as well as informational Websites in various additional countries.

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Downloadable PDF version of this valuation:

ModernGraham Valuation of TIF – February 2016

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $8,238,834,233 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 5.06 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 49.66% Pass
6. Moderate PEmg Ratio PEmg < 20 20.38 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.91 Fail
Score
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 5.06 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.28 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

TIF value Chart February 2016

EPSmg $3.16
MG Growth Estimate 2.48%
MG Value $42.49
Opinion Overvalued
MG Value based on 3% Growth $45.77
MG Value based on 0% Growth $26.83
Market Implied Growth Rate 5.94%
Current Price $64.33
% of Intrinsic Value 151.38%

Tiffany & Company qualifies for the Enterprising Investor but not the more conservative Defensive Investor.  The Defensive Investor is concerned with the high PEmg and PB ratios.  The Enterprising Investor has no initial concerns.  As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company.

As for a valuation, the company appears to be overvalued after growing its EPSmg (normalized earnings) from $2.71 in 2012 to an estimated $3.16 for 2016.  This level of demonstrated earnings growth does not support the market’s implied estimate of 5.94% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value below the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Tiffany & Company (TIF)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Stage 3: Information for Further Research

TIF Charts February 2016

Net Current Asset Value (NCAV) $9.86
Graham Number $42.81
PEmg 20.38
Current Ratio 5.06
PB Ratio 2.91
Dividend Yield 2.42%
Number of Consecutive Years of Dividend Growth 13

 

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Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information Oct2015
Total Current Assets $3,584,800,000
Total Current Liabilities $708,500,000
Long-Term Debt $798,100,000
Total Assets $5,165,800,000
Intangible Assets $0
Total Liabilities $2,312,400,000
Shares Outstanding (Diluted Average) 129,100,000

Earnings Per Share History

Next Fiscal Year Estimate $3.66
Jan2015 $3.73
Jan2014 $1.41
Jan2013 $3.25
Jan2012 $3.40
Jan2011 $2.87
Jan2010 $2.11
Jan2009 $1.74
Jan2008 $2.34
Jan2007 $1.80
Jan2006 $1.75
Jan2005 $2.05
Jan2004 $1.45
Jan2003 $1.28
Jan2002 $1.15
Jan2001 $1.26
Jan2000 $0.97
Jan1999 $0.63
Jan1998 $0.50
Jan1997 $0.42
Jan1996 $0.31

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $3.16
Jan2015 $2.91
Jan2014 $2.54
Jan2013 $2.96
Jan2012 $2.71
Jan2011 $2.30
Jan2010 $1.99
Jan2009 $1.93
Jan2008 $1.98
Jan2007 $1.76
Jan2006 $1.67
Jan2005 $1.56
Jan2004 $1.29
Jan2003 $1.16
Jan2002 $1.03
Jan2001 $0.90
Jan2000 $0.67

Recommended Reading:

Other ModernGraham posts about the company

Tiffany and Company Valuation – October 2015 Update $TIF
Tiffany & Company Analysis – July 2015 Update $TIF
27 Companies in the Spotlight This Week – 4/4/15
Tiffany & Company Quarterly Valuation – March 2015 $TIF
26 Companies in the Spotlight This Week – 12/13/14

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Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

International Flavors & Fragrances Valuation – December 2015 Update $IFF

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Most Undervalued Companies for the Defensive Investor – November 2015.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how International Flavors & Fragrances (IFF) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): International Flavors & Fragrances Inc. (IFF) creates, manufactures and supplies flavors and fragrances for the food, beverage, personal care and household products industries either in the form of compounds or individual ingredients. The company operates in two segments: Flavors and Fragrances. Flavors segment offers flavor compounds that are sold to the food and beverage industries for use in consumer products, such as prepared foods, beverages, dairy, food and sweet products. Fragrances segment offers fragrance compounds, including fine and fragrance ingredients. The Company’s products are sold principally to manufacturers of perfumes and cosmetics, hair and other personal care products, soaps and detergents, cleaning products, dairy, meat and other processed foods, beverages, snacks and savory foods, sweet and baked goods, and pharmaceutical and oral care products.

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To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[level-mg-stocks-screens-subscriber]

Downloadable PDF version of this valuation:

ModernGraham Valuation of IFF – December 2015

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $9,473,994,429 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.38 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 79.17% Pass
6. Moderate PEmg Ratio PEmg < 20 25.27 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 5.89 Fail
Score
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.38 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.11 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

IFF value Chart December 2015

EPSmg $4.59
MG Growth Estimate 7.83%
MG Value $111.02
Opinion Fairly Valued
MG Value based on 3% Growth $66.60
MG Value based on 0% Growth $39.04
Market Implied Growth Rate 8.38%
Current Price $116.06
% of Intrinsic Value 104.54%

International Flavors & Fragrances qualifies for the Enterprising Investor but not the more conservative Defensive Investor.  The Defensive Investor is concerned with the high PEmg and PB ratios.  The Enterprising Investor is only initially concerned by the level of debt relative to the net current assets.  As a result, all Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research.

As for a valuation, the company appears to be fairly valued after growing its EPSmg (normalized earnings) from $3.02 in 2011 to an estimated $4.59 for 2015.  This level of demonstrated earnings growth supports the market’s implied estimate of 8.38% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on International Flavors & Fragrances (IFF)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Stage 3: Information for Further Research

IFF Charts December 2015

Net Current Asset Value (NCAV) -$8.44
Graham Number $48.47
PEmg 25.27
Current Ratio 2.38
PB Ratio 5.89
Dividend Yield 1.70%
Number of Consecutive Years of Dividend Growth 13

 

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Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information Sep15
Total Current Assets $1,638,751,000
Total Current Liabilities $687,320,000
Long-Term Debt $1,057,992,000
Total Assets $3,911,685,000
Intangible Assets $1,255,361,000
Total Liabilities $2,319,813,000
Shares Outstanding (Diluted Average) 80,737,000

Earnings Per Share History

Next Fiscal Year Estimate $5.27
Dec14 $5.06
Dec13 $4.29
Dec12 $3.09
Dec11 $3.26
Dec10 $3.26
Dec09 $2.46
Dec08 $2.86
Dec07 $2.82
Dec06 $2.48
Dec05 $2.04
Dec04 $2.05
Dec03 $1.83
Dec02 $1.84
Dec01 $1.20
Dec00 $1.22
Dec99 $1.53
Dec98 $1.90
Dec97 $1.99
Dec96 $1.70
Dec95 $2.24

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $4.59
Dec14 $4.10
Dec13 $3.50
Dec12 $3.07
Dec11 $3.02
Dec10 $2.86
Dec09 $2.61
Dec08 $2.61
Dec07 $2.40
Dec06 $2.15
Dec05 $1.92
Dec04 $1.78
Dec03 $1.61
Dec02 $1.51
Dec01 $1.42
Dec00 $1.57
Dec99 $1.79

Recommended Reading:

Other ModernGraham posts about the company

19 Best Stocks For Value Investors This Week – 8/29/15
International Flavors & Fragrances Inc. Analysis – August 2015 Update $IFF
International Flavors & Fragrances Inc. Quarterly Valuation – May 2015 $IFF
28 Companies in the Spotlight This Week – 2/28/15
International Flavors & Fragrances Inc. Quarterly Valuation – February 2015 $IFF

Other ModernGraham posts about related companies

The Estee Lauder Company Valuation – October 2015 Update $EL
International Flavors & Fragrances Inc. Analysis – August 2015 Update $IFF
Estee Lauder Companies Analysis – August 2015 Update $EL
International Flavors & Fragrances Inc. Quarterly Valuation – May 2015 $IFF
Estee Lauder Companies Quarterly Valuation – April 2015 $EL
International Flavors & Fragrances Inc. Quarterly Valuation – February 2015 $IFF
Proctor & Gamble Annual Valuation – 2015 $PG
Kimberly Clark Corporation Annual Valuation – 2015 $KMB
Estee-Lauder Quarterly Valuation – January 2015 $EL
Avon Products Inc. Annual Valuation – 2015 $AVP

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

 

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