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How Does Acuity Brands Compare to Its Peers?

Gabriel Kane

US Equity Market Update for October 7, 2015

(Continued from Prior Part)

Acuity Brands and its peers

An analysis of Acuity Brands’ (AYI) and its peers’ income statements in 4Q15 shows that

  • Gross profit margins of Acuity Brands, Philips (PHG), Hubbell (HUB.B), Hologic (HOLX), and OSI Systems (OSIS) are 42.3%, 41.8%, 33.6%, 54.6%, and 33.5%, respectively.
  • EPS (earnings per share) of Acuity, Philips, Hubbell, Hologic, and OSI Systems are $1.38, $0.24, $1.38, $0.10, and $1.09, respectively.

An analysis of Acuity’s and its peers’ balance sheet in 4Q15 shows that

  • Current ratios of Acuity, Philips, Hubbell, Hologic, and OSI Systems are 2.8, 1.3, 3, 1.4, and 2.2, respectively.

An analysis of Acuity’s and its peers’ valuations shows that

  • PE (price-to-earnings) ratios of Acuity, Hubbell, and OSI Systems are 36.7x, 16.8x, and 25.9x, respectively.
  • PBV (price-to-book value) ratios of Acuity, Philips, Hubbell, Hologic, and OSI Systems are 6x, 1.8x, 2.7x, 4.7x, and 2.8x, respectively.

Acuity Brands is way ahead of its competitors based on gross profit margin, EPS, and current, PE, and PBV ratios.

ETFs that invest in Acuity Brands

The First Trust RBA American Industrial Renaissance ETF (AIRR) invests 3.3% of its holdings in Acuity. The ETF tracks a multifactor-selected and proprietary-weighted index of industrial service and support firms and community banks that could benefit from a potential industrial revival in the United States.

The First Trust Materials AlphaDEX ETF (FXZ) invests 2.9% of its holdings in Acuity. The ETF tracks an index of US basic materials companies that are selected and weighted using a proprietary strategy focused on growth and value metrics.

The PowerShares DWA Industrials Momentum Portfolio (PRN) invests 2.7% of its holdings in Acuity. The ETF tracks an index of US industrial firms selected and weighted by price momentum.

Comparison of Acuity and its ETFs

An analysis of Acuity’s and its ETFs’ price movements shows that

  • Year-to-date price movements of Acuity, AIRR, FXZ, and PRN are 30.9%, -12.3%, -8.5%, and -10%, respectively.

An analysis of Acuity’s and its ETFs’ valuations shows that

  • PE (price-to-earnings) ratios of Acuity, AIRR, and FXZ are 36.7x, 19.9x, and 22.2x, respectively.
  • PBV (price-to-book value) ratios of Acuity, AIRR, FXZ, and PRN are 6x, 1.9x, 2.2x, and 5.5x, respectively.

According to the above findings, Acuity Brands has outperformed based on price movement and PE and PBV ratios.

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