BEST BUY CO INC (BBY)
US0865161014 - Common Stock
BBY gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 125 industry peers in the Specialty Retail industry. BBY scores excellent on profitability, but there are some minor concerns on its financial health. BBY has a decent growth rate and is not valued too expensively. BBY also has an excellent dividend rating. These ratings would make BBY suitable for 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.
In the past 5 years BBY has always been profitable.
In the past 5 years BBY always reported a positive cash flow from operatings.
1.2 Ratios
BBY's Return On Assets of 8.43% is fine compared to the rest of the industry. BBY outperforms 78.40% of its industry peers.
BBY's Return On Equity of 40.33% is amongst the best of the industry. BBY outperforms 89.60% of its industry peers.
With an excellent Return On Invested Capital value of 19.21%, BBY belongs to the best of the industry, outperforming 88.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for BBY is significantly above the industry average of 13.93%.
The last Return On Invested Capital (19.21%) for BBY is well below the 3 year average (25.19%), which needs to be investigated, but indicates that BBY had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.43% | ||
| ROE | 40.33% | ||
| ROIC | 19.21% |
ROA(3y)10.43%
ROA(5y)10.12%
ROE(3y)57.56%
ROE(5y)51.23%
ROIC(3y)25.19%
ROIC(5y)24.01%
1.3 Margins
BBY has a better Profit Margin (2.90%) than 64.00% of its industry peers.
BBY's Profit Margin has declined in the last couple of years.
With a Operating Margin value of 4.09%, BBY perfoms like the industry average, outperforming 57.60% of the companies in the same industry.
In the last couple of years the Operating Margin of BBY has declined.
BBY has a Gross Margin of 22.22%. This is amonst the worse of the industry: BBY underperforms 80.00% of its industry peers.
BBY's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.09% | ||
| PM (TTM) | 2.9% | ||
| GM | 22.22% |
OM growth 3Y-10.12%
OM growth 5Y-2.87%
PM growth 3Y-9.11%
PM growth 5Y-3.51%
GM growth 3Y-0.48%
GM growth 5Y-0.99%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), BBY is creating value.
Compared to 1 year ago, BBY has less shares outstanding
Compared to 5 years ago, BBY has less shares outstanding
BBY has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.50 indicates that BBY is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 4.50, BBY belongs to the best of the industry, outperforming 84.00% of the companies in the same industry.
BBY has a debt to FCF ratio of 0.95. This is a very positive value and a sign of high solvency as it would only need 0.95 years to pay back of all of its debts.
BBY's Debt to FCF ratio of 0.95 is fine compared to the rest of the industry. BBY outperforms 80.00% of its industry peers.
A Debt/Equity ratio of 0.37 indicates that BBY is not too dependend on debt financing.
BBY has a Debt to Equity ratio (0.37) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.37 | ||
| Debt/FCF | 0.95 | ||
| Altman-Z | 4.5 |
ROIC/WACC2.14
WACC8.97%
2.3 Liquidity
A Current Ratio of 1.01 indicates that BBY should not have too much problems paying its short term obligations.
With a Current ratio value of 1.01, BBY is not doing good in the industry: 77.60% of the companies in the same industry are doing better.
A Quick Ratio of 0.33 indicates that BBY may have some problems paying its short term obligations.
BBY has a worse Quick ratio (0.33) than 70.40% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.33 |
3. Growth
3.1 Past
BBY shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -3.74%.
Measured over the past 5 years, BBY shows a small growth in Earnings Per Share. The EPS has been growing by 3.47% on average per year.
BBY shows a decrease in Revenue. In the last year, the revenue decreased by -5.07%.
BBY shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.27% yearly.
EPS 1Y (TTM)-3.74%
EPS 3Y-6.95%
EPS 5Y3.47%
EPS Q2Q%4.35%
Revenue 1Y (TTM)-5.07%
Revenue growth 3Y-2.76%
Revenue growth 5Y0.27%
Sales Q2Q%-6.55%
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 13.31% yearly.
Based on estimates for the next years, BBY will show a small growth in Revenue. The Revenue will grow by 1.24% on average per year.
EPS Next Y-3.45%
EPS Next 2Y3.37%
EPS Next 3Y7.22%
EPS Next 5Y13.31%
Revenue Next Year-3.51%
Revenue Next 2Y-0.71%
Revenue Next 3Y0.61%
Revenue Next 5Y1.24%
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
BBY is valuated correctly with a Price/Earnings ratio of 13.11.
Based on the Price/Earnings ratio, BBY is valued a bit cheaper than 77.60% of the companies in the same industry.
BBY's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.35.
The Price/Forward Earnings ratio is 12.36, which indicates a correct valuation of BBY.
BBY's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. BBY is cheaper than 71.20% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of BBY to the average of the S&P500 Index (20.05), we can say BBY is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.11 | ||
| Fwd PE | 12.36 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, BBY is valued a bit cheaper than 73.60% of the companies in the same industry.
69.60% 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 | 15.02 | ||
| EV/EBITDA | 6.84 |
4.3 Compensation for Growth
The decent profitability rating of BBY may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)3.78
EPS Next 2Y3.37%
EPS Next 3Y7.22%
5. Dividend
5.1 Amount
BBY has a Yearly Dividend Yield of 4.07%, which is a nice return.
Compared to an average industry Dividend Yield of 3.36, BBY pays a better dividend. On top of this BBY pays more dividend than 92.00% of the companies listed in the same industry.
BBY's Dividend Yield is rather good when compared to the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.07% |
5.2 History
On average, the dividend of BBY grows each year by 15.34%, which is quite nice.
BBY has paid a dividend for at least 10 years, which is a reliable track record.
BBY has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)15.34%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
64.44% of the earnings are spent on dividend by BBY. This is not a sustainable payout ratio.
BBY's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP64.44%
EPS Next 2Y3.37%
EPS Next 3Y7.22%
BEST BUY CO INC
NYSE:BBY (6/28/2024, 7:04:00 PM)
After market: 84.49 +0.2 (+0.24%)84.29
-0.03 (-0.04%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap18.24B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.07% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
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Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.11 | ||
| Fwd PE | 12.36 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)3.78
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.43% | ||
| ROE | 40.33% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 4.09% | ||
| PM (TTM) | 2.9% | ||
| GM | 22.22% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover2.9
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.37 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.33 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)-3.74%
EPS 3Y-6.95%
EPS 5Y
EPS Q2Q%
EPS Next Y-3.45%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-5.07%
Revenue growth 3Y-2.76%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y