BEST BUY CO INC (BBY) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:BBY - US0865161014 - Common Stock
65.74 USD
-1.01 (-1.51%)
65.81 USD
+0.07 (+0.11%)
We assign a fundamental rating of 5 out of 10 to BBY. 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 could make BBY a good candidate for value and dividend investing.
1. Profitability
1.1 Basic Checks
- BBY had positive earnings in the past year.
- BBY had a positive operating cash flow in the past year.
- In the past 5 years BBY has always been profitable.
- Each year in the past 5 years BBY had a positive operating cash flow.
1.2 Ratios
- BBY has a Return On Assets of 3.84%. This is in the better half of the industry: BBY outperforms 63.11% of its industry peers.
- The Return On Equity of BBY (24.31%) is better than 82.79% of its industry peers.
- The Return On Invested Capital of BBY (19.29%) is better than 87.70% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital 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's Profit Margin of 1.54% is in line compared to the rest of the industry. BBY outperforms 56.56% of its industry peers.
- In the last couple of years the Profit Margin of BBY has declined.
- 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.
- The Gross Margin of BBY (22.50%) is worse than 77.87% of its industry peers.
- 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.
- Compared to 5 years ago, BBY has less shares outstanding
- Compared to 1 year ago, BBY has a worse debt to assets ratio.
2.2 Solvency
- The Debt to FCF ratio of BBY is 0.77, which is an excellent value as it means it would take BBY, only 0.77 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of BBY (0.77) is better than 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.
- BBY's Debt to Equity ratio of 0.44 is in line compared to the rest of the industry. BBY outperforms 56.56% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | 0.77 | ||
| Altman-Z | N/A |
ROIC/WACC2.03
WACC9.48%
2.3 Liquidity
- BBY has a Current Ratio of 1.05. This is a normal value and indicates that BBY is financially healthy and should not expect problems in meeting its short term obligations.
- BBY has a worse Current ratio (1.05) than 72.13% of its industry peers.
- 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.
- Looking at the Quick ratio, with a value of 0.26, BBY is doing worse than 82.79% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.05 | ||
| Quick Ratio | 0.26 |
3. Growth
3.1 Past
- The earnings per share for BBY have decreased by -1.69% in the last year.
- Measured over the past 5 years, BBY shows a small growth in Earnings Per Share. The EPS has been growing by 0.80% on average per year.
- Looking at the last year, BBY shows a decrease in Revenue. The Revenue has decreased by -0.95% in the last year.
- BBY shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.99% yearly.
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
- The Earnings Per Share is expected to grow by 9.95% on average over the next years. This is quite good.
- The Revenue is expected to grow by 2.25% on average over the next years.
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
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 10.26, which indicates a very decent valuation of BBY.
- 84.43% of the companies in the same industry are more expensive than BBY, based on the Price/Earnings ratio.
- When comparing the Price/Earnings ratio of BBY to the average of the S&P500 Index (28.82), we can say BBY is valued rather cheaply.
- With a Price/Forward Earnings ratio of 9.67, the valuation of BBY can be described as very reasonable.
- BBY's Price/Forward Earnings ratio is rather cheap when compared to the industry. BBY is cheaper than 86.89% of the companies in the same industry.
- BBY is valuated cheaply when we compare the Price/Forward Earnings ratio to 25.95, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.26 | ||
| Fwd PE | 9.67 |
4.2 Price Multiples
- BBY's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. BBY is cheaper than 87.70% of the companies in the same industry.
- 86.89% of the companies in the same industry are more expensive than BBY, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.12 | ||
| EV/EBITDA | 5.43 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates BBY does not grow enough to justify the current Price/Earnings ratio.
- BBY has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)209.77
PEG (5Y)12.78
EPS Next 2Y3.23%
EPS Next 3Y5.19%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 5.67%, BBY is a good candidate for dividend investing.
- 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.
- Compared to an average S&P500 Dividend Yield of 1.82, BBY pays a better dividend.
| 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.
- BBY's earnings are growing slower than its dividend. 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%.