Buffett Brain · Research note
Score updated 27 Oct 2026 · analysis from 25 May 2026
PH· Industrials
Parker-Hannifin
Parker-Hannifin's solid operating margins and revenue growth are overshadowed by weaker ROIC and valuation metrics, making the investment case uncertain.
Buffett fit
Partial fit
Owner
39
Durability
79
Management
61
Price
49
Score updated 27 Oct 2026 · analysis from 25 May 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Industrials stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned 100% of Parker-Hannifin, I would focus on maintaining the , currently at 20.87%, while managing to grow the revenue at a CAGR of 8.45% over the next decade.
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The company has shown resilience with a 5-year EPS CAGR of 19.4%. However, I would be cautious of technological disruptions or increased competition that could erode margins.
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Parker-Hannifin has a share count CAGR of -0.14%, indicating a slight focus on , but the buyback yield of only 0.56% suggests limited capital return to shareholders.
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With an yield of 3.07% and a of 31.3, the valuation appears stretched compared to my target of 8-10% yield.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 120.87% exceeds the sector's top-quintile cutoff of 17%.
- 2 of 21.04% indicates strong returns on equity over the past five years.
- 3Consistent revenue growth with a 5-year CAGR of 8.45%.
- 4All five years of profitability, showing stability in earnings.
Concerns
5- 1 of 13.27% is below the 15% threshold typically sought by Buffett.
- 2 of 37.23% is below the sector's top-quintile cutoff of 43.7%.
- 3 of 31.3 suggests the stock is overvalued compared to the desired entry point.
- 4 yield of 3.07% does not meet the 8-10% target.
Price history
$904+204.9%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Parker-Hannifin operates through two segments: Diversified Industrial and Aerospace Systems, generating $19.85B in revenue. The company provides essential motion and control technologies, which are critical across various industries, including aerospace and manufacturing. Their products are sold to OEMs and distributors, ensuring a steady revenue stream. The unit economics appear strong, as evidenced by a 20.87% .
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
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