BEST BUY CO INC (BBY) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:BBY - US0865161014 - Common Stock
65.56 USD
-0.18 (-0.27%)
65.49 USD
-0.07 (-0.11%)
Taking everything into account, BBY scores 5 out of 10 in our fundamental rating. BBY was compared to 122 industry peers in the Specialty Retail industry. BBY has only an average score on both its financial health and profitability. BBY is cheap, but on the other hand it scores bad on growth. BBY also has an excellent dividend rating. These ratings would make BBY suitable for value and dividend investing!
1. Profitability
1.1 Basic Checks
- In the past year BBY was profitable.
- In the past year BBY had a positive cash flow from operations.
- Each year in the past 5 years BBY has been profitable.
- BBY had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- BBY's Return On Assets of 3.84% is fine compared to the rest of the industry. BBY outperforms 63.11% of its industry peers.
- BBY has a Return On Equity of 24.31%. This is amongst the best in the industry. BBY outperforms 82.79% of its industry peers.
- BBY has a better Return On Invested Capital (19.29%) than 87.70% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for BBY is significantly above the industry average of 12.24%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.84% | ||
| ROE | 24.31% | ||
| ROIC | 19.29% |
ROA(3y)7.85%
ROA(5y)9.4%
ROE(3y)41.48%
ROE(5y)48.98%
ROIC(3y)19.35%
ROIC(5y)22.54%
1.3 Margins
- BBY has a Profit Margin of 1.54%. This is comparable to the rest of the industry: BBY outperforms 56.56% of its industry peers.
- BBY's Profit Margin has declined in the last couple of years.
- With a decent Operating Margin value of 4.16%, BBY is doing good in the industry, outperforming 60.66% of the companies in the same industry.
- BBY's Operating Margin has declined in the last couple of years.
- Looking at the Gross Margin, with a value of 22.50%, BBY is doing worse than 77.87% of the companies in the same industry.
- BBY's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.16% | ||
| PM (TTM) | 1.54% | ||
| GM | 22.5% |
OM growth 3Y-10.46%
OM growth 5Y-2.33%
PM growth 3Y-22.2%
PM growth 5Y-8.77%
GM growth 3Y0.15%
GM growth 5Y-0.37%
2. Health
2.1 Basic Checks
- BBY has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
- BBY has less shares outstanding than it did 1 year ago.
- BBY has less shares outstanding than it did 5 years ago.
- The debt/assets ratio for BBY is higher compared to a year ago.
2.2 Solvency
- BBY has a debt to FCF ratio of 0.77. This is a very positive value and a sign of high solvency as it would only need 0.77 years to pay back of all of its debts.
- BBY's Debt to FCF ratio of 0.77 is amongst the best of the industry. BBY outperforms 81.15% of its industry peers.
- BBY has a Debt/Equity ratio of 0.44. This is a healthy value indicating a solid balance between debt and equity.
- The Debt to Equity ratio of BBY (0.44) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | 0.77 | ||
| Altman-Z | N/A |
ROIC/WACC2.03
WACC9.49%
2.3 Liquidity
- A Current Ratio of 1.05 indicates that BBY should not have too much problems paying its short term obligations.
- Looking at the Current ratio, with a value of 1.05, BBY is doing worse than 72.13% of the companies in the same industry.
- BBY has a Quick Ratio of 1.05. This is a bad value and indicates that BBY is not financially healthy enough and could expect problems in meeting its short term obligations.
- With a Quick ratio value of 0.26, BBY is not doing good in the industry: 82.79% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.05 | ||
| Quick Ratio | 0.26 |
3. Growth
3.1 Past
- BBY shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -1.69%.
- The Earnings Per Share has been growing slightly by 0.80% on average over the past years.
- The Revenue has decreased by -0.95% in the past year.
- Measured over the past years, BBY shows a decrease in Revenue. The Revenue has been decreasing by -0.99% on average per year.
EPS 1Y (TTM)-1.69%
EPS 3Y-13.97%
EPS 5Y0.8%
EPS Q2Q%11.11%
Revenue 1Y (TTM)-0.95%
Revenue growth 3Y-7.08%
Revenue growth 5Y-0.99%
Sales Q2Q%2.4%
3.2 Future
- BBY is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.95% yearly.
- Based on estimates for the next years, BBY will show a small growth in Revenue. The Revenue will grow by 2.25% on average per year.
EPS Next Y0.05%
EPS Next 2Y3.23%
EPS Next 3Y5.19%
EPS Next 5Y9.95%
Revenue Next Year1.35%
Revenue Next 2Y1.36%
Revenue Next 3Y1.53%
Revenue Next 5Y2.25%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 10.23, which indicates a very decent valuation of BBY.
- Based on the Price/Earnings ratio, BBY is valued cheaper than 84.43% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 28.82. BBY is valued rather cheaply when compared to this.
- Based on the Price/Forward Earnings ratio of 9.64, the valuation of BBY can be described as reasonable.
- Based on the Price/Forward Earnings ratio, BBY is valued cheaper than 86.89% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.95. BBY is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.23 | ||
| Fwd PE | 9.64 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of BBY indicates a rather cheap valuation: BBY is cheaper than 87.70% of the companies listed in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of BBY indicates a rather cheap valuation: BBY is cheaper than 86.89% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.1 | ||
| EV/EBITDA | 5.43 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- BBY has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)209.2
PEG (5Y)12.74
EPS Next 2Y3.23%
EPS Next 3Y5.19%
5. Dividend
5.1 Amount
- BBY has a Yearly Dividend Yield of 5.67%, which is a nice return.
- In the last 3 months the price of BBY has falen by -20.18%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
- BBY's Dividend Yield is rather good when compared to the industry average which is at 2.15. BBY pays more dividend than 95.08% of the companies in the same industry.
- BBY's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.67% |
5.2 History
- On average, the dividend of BBY grows each year by 13.38%, which is quite nice.
- BBY has been paying a dividend for at least 10 years, so it has a reliable track record.
- BBY has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)13.38%
Div Incr Years14
Div Non Decr Years14
5.3 Sustainability
- BBY pays out 124.34% of its income as dividend. This is not a sustainable payout ratio.
- The dividend of BBY is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP124.34%
EPS Next 2Y3.23%
EPS Next 3Y5.19%
BEST BUY CO INC / BBY FAQ
What is the ChartMill fundamental rating of BEST BUY CO INC (BBY) stock?
ChartMill assigns a fundamental rating of 5 / 10 to BBY.
What is the valuation status of BEST BUY CO INC (BBY) stock?
ChartMill assigns a valuation rating of 7 / 10 to BEST BUY CO INC (BBY). This can be considered as Undervalued.
How profitable is BEST BUY CO INC (BBY) stock?
BEST BUY CO INC (BBY) has a profitability rating of 6 / 10.
What is the expected EPS growth for BEST BUY CO INC (BBY) stock?
The Earnings per Share (EPS) of BEST BUY CO INC (BBY) is expected to grow by 0.05% in the next year.
How sustainable is the dividend of BEST BUY CO INC (BBY) stock?
The dividend rating of BEST BUY CO INC (BBY) is 7 / 10 and the dividend payout ratio is 124.34%.