10 Best Aluminum and Aluminum Mining Stocks to Buy Now

5. Avery Dennison Corporation (NYSE:AVY)

Number of Hedge Fund Holders: 33

We now have Avery Dennison Corporation (NYSE:AVY) on our list of the best aluminum stocks. It is a global leader in labeling and packaging materials, operating through two main segments: Materials and Solutions Group. Avery Dennison offers a range of products, including pressure-sensitive materials, RFID tags, plastic films, metal foils, fabrics, and performance tapes. It also offers a wide range of aluminum foil (Al-foil) based multi-laminates, designed to extend the durability of VIP envelopes that require a complete barrier for long-term applications.

In Q2 2024, Avery Dennison Corporation (NYSE:AVY) reported an EPS of $2.42, marking a 26% YoY growth. The Materials segment saw a 6% organic sales growth, rebounding from last year’s inventory destocking, with double-digit volume increases in Europe and Asia. The adjusted EBITDA margin improved to 17.9%, up over two percentage points from last year, due to higher productivity and volume. Meanwhile, the Solutions Group saw an 11% rise in organic sales and a 16.8% adjusted EBITDA margin, supported by increased volumes and productivity in the apparel sector and intelligent labels.

Financially, Avery Dennison Corporation (NYSE:AVY) maintained strong performance with a free cash flow of $201 million in the first half of the year and a net debt-to-adjusted EBITDA ratio of 2.2x at the quarter’s end. The company’s strategic investments in intelligent labels and new customer rollouts in high-value categories, like logistics and food, are expected to sustain growth.

Despite Avery Dennison’s strong EPS growth YoY, the modest 7% increase in sales points to slower revenue growth. The company’s focus on achieving $36 million in pretax savings highlights efforts to improve efficiency, while its 2.2x net debt to EBITDA ratio indicates a need to carefully manage debt levels moving forward.

On April 9, Avery Dennison Corporation (NYSE:AVY) added new electrode fixing tapes to their portfolio for electric vehicle (EV) battery assembly. These tapes are designed to enhance the safety, efficiency, and ease of assembling EV batteries. The company aims to improve its sluggish sales growth with this new product installation.

Now, moving on to the price movement, we find that the company’s share price has experienced a 2.41% increase over the past month and an 11.65% year-to-date rise. This positive price movement is attributed to Avery Dennison’s strong performance and strategic play.

Analysts project a 7.34% upside price surge. Moreover, 33 hedge funds have invested $204 million collectively in the company, as of Q2 2024, as per Insider Monkey’s database, earning Avery Dennison a spot on our list of the best aluminum stocks.