ARGAN (ARG.PA) Stock Fundamental Analysis
Europe - Euronext Paris - EPA:ARG - FR0010481960 - REIT
66.3 EUR
+0.2 (+0.3%)
We assign a fundamental rating of 5 out of 10 to ARG. ARG was compared to 41 industry peers in the Diversified REITs industry. ARG has an excellent profitability rating, but there are concerns on its financial health. ARG may be a bit undervalued, certainly considering the very reasonable score on growth ARG also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- ARG had positive earnings in the past year.
- ARG had a positive operating cash flow in the past year.
- ARG had positive earnings in 4 of the past 5 years.
- Each year in the past 5 years ARG had a positive operating cash flow.
1.2 Ratios
- ARG's Return On Assets of 6.76% is amongst the best of the industry. ARG outperforms 100.00% of its industry peers.
- The Return On Equity of ARG (12.66%) is better than 97.56% of its industry peers.
- ARG has a Return On Invested Capital (3.48%) which is comparable to the rest of the industry.
- The Average Return On Invested Capital over the past 3 years for ARG is in line with the industry average of 3.37%.
- The last Return On Invested Capital (3.48%) for ARG is above the 3 year average (3.13%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.76% | ||
| ROE | 12.66% | ||
| ROIC | 3.48% |
ROA(3y)0.48%
ROA(5y)4.9%
ROE(3y)0.46%
ROE(5y)10.33%
ROIC(3y)3.13%
ROIC(5y)3.04%
1.3 Margins
- Looking at the Profit Margin, with a value of 139.56%, ARG belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
- ARG's Profit Margin has declined in the last couple of years.
- ARG has a Operating Margin of 92.83%. This is amongst the best in the industry. ARG outperforms 92.68% of its industry peers.
- In the last couple of years the Operating Margin of ARG has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 92.83% | ||
| PM (TTM) | 139.56% | ||
| GM | N/A |
OM growth 3Y-0.31%
OM growth 5Y17.53%
PM growth 3Y-33.91%
PM growth 5Y-10.3%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
- ARG has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- ARG has more shares outstanding than it did 1 year ago.
- Compared to 5 years ago, ARG has more shares outstanding
- The debt/assets ratio for ARG has been reduced compared to a year ago.
2.2 Solvency
- Based on the Altman-Z score of 1.30, we must say that ARG is in the distress zone and has some risk of bankruptcy.
- Looking at the Altman-Z score, with a value of 1.30, ARG belongs to the top of the industry, outperforming 82.93% of the companies in the same industry.
- ARG has a debt to FCF ratio of 9.50. This is a negative value and a sign of low solvency as ARG would need 9.50 years to pay back of all of its debts.
- With an excellent Debt to FCF ratio value of 9.50, ARG belongs to the best of the industry, outperforming 82.93% of the companies in the same industry.
- A Debt/Equity ratio of 0.76 indicates that ARG is somewhat dependend on debt financing.
- ARG has a Debt to Equity ratio (0.76) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.76 | ||
| Debt/FCF | 9.5 | ||
| Altman-Z | 1.3 |
ROIC/WACC0.6
WACC5.79%
2.3 Liquidity
- ARG has a Current Ratio of 0.52. This is a bad value and indicates that ARG is not financially healthy enough and could expect problems in meeting its short term obligations.
- Looking at the Current ratio, with a value of 0.52, ARG is in line with its industry, outperforming 56.10% of the companies in the same industry.
- A Quick Ratio of 0.52 indicates that ARG may have some problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 0.52, ARG is in line with its industry, outperforming 58.54% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.52 | ||
| Quick Ratio | 0.52 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 191.42% over the past year.
- Measured over the past years, ARG shows a decrease in Earnings Per Share. The EPS has been decreasing by -3.87% on average per year.
- ARG shows a small growth in Revenue. In the last year, the Revenue has grown by 7.89%.
- ARG shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.50% yearly.
EPS 1Y (TTM)191.42%
EPS 3Y-30.53%
EPS 5Y-3.87%
EPS Q2Q%39.96%
Revenue 1Y (TTM)7.89%
Revenue growth 3Y8.41%
Revenue growth 5Y14.5%
Sales Q2Q%7.59%
3.2 Future
- ARG is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 2.50% yearly.
- ARG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.73% yearly.
EPS Next Y7.52%
EPS Next 2Y4.02%
EPS Next 3Y2.62%
EPS Next 5Y2.5%
Revenue Next Year6.57%
Revenue Next 2Y5.1%
Revenue Next 3Y4.73%
Revenue Next 5Y4.73%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 5.76, the valuation of ARG can be described as very cheap.
- ARG's Price/Earnings ratio is rather cheap when compared to the industry. ARG is cheaper than 100.00% of the companies in the same industry.
- ARG is valuated cheaply when we compare the Price/Earnings ratio to 28.39, which is the current average of the S&P500 Index.
- A Price/Forward Earnings ratio of 10.91 indicates a reasonable valuation of ARG.
- Based on the Price/Forward Earnings ratio, ARG is valued a bit cheaper than 65.85% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.72. ARG is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.76 | ||
| Fwd PE | 10.91 |
4.2 Price Multiples
- ARG's Enterprise Value to EBITDA is on the same level as the industry average.
- ARG's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. ARG is cheaper than 75.61% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.85 | ||
| EV/EBITDA | 18.06 |
4.3 Compensation for Growth
- The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- ARG has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)0.76
PEG (5Y)N/A
EPS Next 2Y4.02%
EPS Next 3Y2.62%
5. Dividend
5.1 Amount
- ARG has a Yearly Dividend Yield of 5.09%, which is a nice return.
- ARG's Dividend Yield is comparable with the industry average which is at 5.41.
- ARG's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.09% |
5.2 History
- On average, the dividend of ARG grows each year by 32.61%, which is quite nice.
Dividend Growth(5Y)32.61%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
- 22.47% of the earnings are spent on dividend by ARG. This is a low number and sustainable payout ratio.
- ARG's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP22.47%
EPS Next 2Y4.02%
EPS Next 3Y2.62%
ARGAN / ARG.PA FAQ
Can you provide the ChartMill fundamental rating for ARGAN?
ChartMill assigns a fundamental rating of 5 / 10 to ARG.PA.
Can you provide the valuation status for ARGAN?
ChartMill assigns a valuation rating of 7 / 10 to ARGAN (ARG.PA). This can be considered as Undervalued.
Can you provide the profitability details for ARGAN?
ARGAN (ARG.PA) has a profitability rating of 7 / 10.
Can you provide the PE and PB ratios for ARG stock?
The Price/Earnings (PE) ratio for ARGAN (ARG.PA) is 5.76 and the Price/Book (PB) ratio is 0.74.
Can you provide the dividend sustainability for ARG stock?
The dividend rating of ARGAN (ARG.PA) is 7 / 10 and the dividend payout ratio is 22.47%.