2.15% Dividend Yield, 15 Years of Dividend Hikes – The Label Maker Reinventing Materials Science
The hidden power behind every sticker, tag, and barcode
Think of every label stuck on a product, every tagless clothing, every barcode on a box, and the packaging that keeps your food fresh. This company sits at the heart of the supply chain, turning raw materials into functional and decorative films and labels that connect brands with consumers. Its technology enables everything from traceability and sustainability to anti-counterfeiting and digital interaction. The scale is global, and the products are everywhere—yet most people never know its name.
Avery Dennison (AVY)
Financial Score: 96 / 99
Quick Tip
To keep your portfolio strong, stay on top of the financials for each company you hold. Solid companies mean better returns, so be sure to check in on their quarterly and annual numbers.Interesting stocks usually score 80+ on the Financial Scale, with top players hitting 90+. If that score dips below 80, it might be a good time to consider cutting ties before things take a turn.Avery Dennison operates as a global leader in labeling and packaging materials, producing pressure-sensitive labels, graphics, and high-tech solutions for food, apparel, logistics, and digital products. For Q3 2025, the company posted net sales of $2.22 billion (up 1.5% year-over-year), adjusted earnings per share of $2.37, and operating margins of 15.2%—outpacing consensus. Adjusted EBITDA margin rose to 17.5%, driven by productivity gains. The business is split between Materials Group (consumer, logistics) and Solutions Group (high-value, specialty products), with 40% of revenue from non-durable goods and 15% tied to e-commerce and shipping.
Dividends powered by cash flow and innovation
Avery Dennison’s forward annual dividend is $3.76, yielding 2.15% with a payout ratio near 42.78%. For 15 consecutive years, it has increased payouts, growing dividends by 53% over five years. This reflects strong free cash flow, a resilient portfolio, and strategic capital management. High-value categories—like intelligent labels—grew at double digits, offsetting inflationary headwinds. Dividend growth is underpinned by consistent pricing power, operational improvements, and disciplined reinvestment.
Q3 2025: Growth and resilience in action
Sales rose 1.5% to $2.22 billion with adjusted EPS up 2% to $2.37. Adjusted operating income in the Solutions Group increased 3.6% to $230.1 million, while adjusted EBITDA margin expanded to 17.5%. The company’s guidance for Q4 2025 EPS is $2.35–$2.45, excluding one-time restructuring charges. Adjusted free cash flow reached nearly $270 million, supporting both dividends and growth investments. The Materials Group saw robust demand, while Solutions Group delivered outsized growth in high-value products.
Growth engine: Tech, sustainability, and digital transformation
Avery Dennison expects over 15% growth in intelligent labels for 2025, driven by e-commerce and digital demand. The company is executing restructuring initiatives to free up capital, investing in high-margin specialty products, and rolling out pricing actions to combat inflation. Sustainability is central: Avery Dennison launched new circular packaging solutions and tagless apparel technologies to meet evolving environmental standards. These moves position it to capture growth in e-commerce, anti-counterfeiting, and digital brand engagement.
Fun Fact – The man who invented the self-adhesive label
In 1935, Ray Stanton Avery founded Avery Adhesives in a Los Angeles garage, inventing the first self-adhesive label to help stores merchandise products. This simple innovation led to a global empire, transforming how brands connect with consumers—and making Avery Dennison the world’s leading label producer.
Final Take
Avery Dennison blends reliable income with dynamic growth, powered by strong demand for labeling, materials innovation, and a resilient business model. Its Financial Score of 96 reflects healthy cash flows, manageable leverage, and effective risk management. While raw material costs and restructuring create volatility, strategic investments in high-value products and sustainability lay the foundation for continued dividend growth and profitable expansion. For investors seeking income and exposure to innovation in packaging and digital materials, Avery Dennison’s story is one of reinvention and resilience.
Someone’s sitting in the shade today because someone planted a tree a long time ago. ― Warren Buffett.
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Solid breakdown of AVY's compounding power through operational leverage and intelligent labels. The 15-year dividend streak backed by a 42% payout ratio leaves substantial room for continued growth, and your point about double-digit expansion in intelligent labels captures where the real value creation is happening. What's particualrly compelling is how Avery Dennison threads the needle between mature label manufacturing and high-margin specialty products, essentially building a barbell portfolio within their own operations. The sustainabilty initiatives and tagless apparel tech aren't just ESG window dressing they're defensive moats against commoditization in a business where brand relationships and technical expertise create genuine switching costs.