BEST BUY CO INC (BBY) Stock Fundamental Analysis
NYSE:BBY - New York Stock Exchange, Inc. - US0865161014 - Common Stock - Currency: USD
Taking everything into account, BBY scores 5 out of 10 in our fundamental rating. BBY was compared to 121 industry peers in the Specialty Retail industry. BBY has only an average score on both its financial health and profitability. BBY has a correct valuation and a medium growth rate. Finally 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.
BBY had a positive operating cash flow in the past year.
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 has a better Return On Assets (6.27%) than 73.55% of its industry peers.
BBY's Return On Equity of 33.01% is amongst the best of the industry. BBY outperforms 85.95% of its industry peers.
BBY's Return On Invested Capital of 18.94% is amongst the best of the industry. BBY outperforms 86.78% of its industry peers.
The Average Return On Invested Capital over the past 3 years for BBY is significantly above the industry average of 14.32%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.27% | ||
| ROE | 33.01% | ||
| ROIC | 18.94% |
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
With a decent Profit Margin value of 2.23%, BBY is doing good in the industry, outperforming 60.33% of the companies in the same industry.
In the last couple of years the Profit Margin of BBY has declined.
BBY has a Operating Margin (4.18%) which is comparable to the rest of the industry.
In the last couple of years the Operating Margin of BBY has declined.
BBY has a Gross Margin of 22.60%. This is in the lower half of the industry: BBY underperforms 76.03% of its industry peers.
In the last couple of years the Gross Margin of BBY has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.18% | ||
| PM (TTM) | 2.23% | ||
| GM | 22.6% |
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.
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
The Debt to FCF ratio of BBY is 0.83, which is an excellent value as it means it would take BBY, only 0.83 years of fcf income to pay off all of its debts.
BBY's Debt to FCF ratio of 0.83 is amongst the best of the industry. BBY outperforms 80.99% of its industry peers.
BBY has a Debt/Equity ratio of 0.41. This is a healthy value indicating a solid balance between debt and equity.
BBY has a Debt to Equity ratio (0.41) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.41 | ||
| Debt/FCF | 0.83 | ||
| Altman-Z | N/A |
ROIC/WACC1.96
WACC9.68%
2.3 Liquidity
BBY has a Current Ratio of 1.03. 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 Current ratio of 1.03. This is in the lower half of the industry: BBY underperforms 72.73% of its industry peers.
A Quick Ratio of 0.39 indicates that BBY may have some problems paying its short term obligations.
BBY has a Quick ratio (0.39) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.03 | ||
| Quick Ratio | 0.39 |
3. Growth
3.1 Past
BBY shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 0.00%.
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.
The Revenue has decreased by -4.43% in the past year.
The Revenue has been decreasing by -0.99% on average over the past years.
EPS 1Y (TTM)0%
EPS 3Y-13.97%
EPS 5Y0.8%
EPS Q2Q%-5.15%
Revenue 1Y (TTM)-4.43%
Revenue growth 3Y-7.08%
Revenue growth 5Y-0.99%
Sales Q2Q%-4.77%
3.2 Future
The Earnings Per Share is expected to grow by 19.51% on average over the next years. This is quite good.
BBY is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.18% yearly.
EPS Next Y3.85%
EPS Next 2Y7.67%
EPS Next 3Y12.46%
EPS Next 5Y19.51%
Revenue Next Year1.31%
Revenue Next 2Y2.01%
Revenue Next 3Y1.85%
Revenue Next 5Y2.18%
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
A Price/Earnings ratio of 12.45 indicates a correct valuation of BBY.
78.51% of the companies in the same industry are more expensive than BBY, based on the Price/Earnings ratio.
BBY's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 29.35.
A Price/Forward Earnings ratio of 11.99 indicates a reasonable valuation of BBY.
Based on the Price/Forward Earnings ratio, BBY is valued a bit cheaper than 74.38% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.10. BBY is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.45 | ||
| Fwd PE | 11.99 |
4.2 Price Multiples
BBY's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. BBY is cheaper than 79.34% of the companies in the same industry.
80.99% 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 | 12.2 | ||
| EV/EBITDA | 6.37 |
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.
The decent profitability rating of BBY may justify a higher PE ratio.
A more expensive valuation may be justified as BBY's earnings are expected to grow with 12.46% in the coming years.
PEG (NY)3.24
PEG (5Y)15.51
EPS Next 2Y7.67%
EPS Next 3Y12.46%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.83%, BBY is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 4.91, BBY pays a better dividend. On top of this BBY pays more dividend than 90.91% 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 2.33.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.83% |
5.2 History
The dividend of BBY is nicely growing with an annual growth rate of 13.24%!
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)13.24%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
BBY pays out 87.06% of its income as dividend. This is not a sustainable payout ratio.
The dividend of BBY is growing, but earnings are growing more, so the dividend growth is sustainable.
DP87.06%
EPS Next 2Y7.67%
EPS Next 3Y12.46%
79.41
+0.81 (+1.03%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners87.27%
Inst Owner Change2.34%
Ins Owners0.29%
Ins Owner Change-2.79%
Market Cap16.98B
Analysts69.7
Price Target101.11 (27.33%)
Short Float %8.46%
Short Ratio6.46
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.83% |
Yearly Dividend3.76
Dividend Growth(5Y)13.24%
DP87.06%
Div Incr Years13
Div Non Decr Years13
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.42%
Min EPS beat(2)-3.62%
Max EPS beat(2)6.45%
EPS beat(4)3
Avg EPS beat(4)6.98%
Min EPS beat(4)-3.62%
Max EPS beat(4)14.65%
EPS beat(8)7
Avg EPS beat(8)7.33%
EPS beat(12)10
Avg EPS beat(12)10.89%
EPS beat(16)13
Avg EPS beat(16)15.98%
Revenue beat(2)1
Avg Revenue beat(2)-1.07%
Min Revenue beat(2)-2.93%
Max Revenue beat(2)0.79%
Revenue beat(4)1
Avg Revenue beat(4)-1.22%
Min Revenue beat(4)-2.93%
Max Revenue beat(4)0.79%
Revenue beat(8)1
Avg Revenue beat(8)-1.19%
Revenue beat(12)3
Avg Revenue beat(12)-0.63%
Revenue beat(16)6
Avg Revenue beat(16)0.27%
PT rev (1m)-0.05%
PT rev (3m)-1.1%
EPS NQ rev (1m)-0.96%
EPS NQ rev (3m)-2.2%
EPS NY rev (1m)-0.37%
EPS NY rev (3m)-4.09%
Revenue NQ rev (1m)-0.2%
Revenue NQ rev (3m)-1.12%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)-1.45%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.45 | ||
| Fwd PE | 11.99 | ||
| P/S | 0.41 | ||
| P/FCF | 12.2 | ||
| P/OCF | 8.09 | ||
| P/B | 6.05 | ||
| P/tB | 8.94 | ||
| EV/EBITDA | 6.37 |
EPS(TTM)6.38
EY8.03%
EPS(NY)6.63
Fwd EY8.34%
FCF(TTM)6.51
FCFY8.2%
OCF(TTM)9.81
OCFY12.36%
SpS194.24
BVpS13.13
TBVpS8.89
PEG (NY)3.24
PEG (5Y)15.51
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.27% | ||
| ROE | 33.01% | ||
| ROCE | 25.63% | ||
| ROIC | 18.94% | ||
| ROICexc | 24.69% | ||
| ROICexgc | 29.93% | ||
| OM | 4.18% | ||
| PM (TTM) | 2.23% | ||
| GM | 22.6% | ||
| FCFM | 3.35% |
ROA(3y)7.85%
ROA(5y)9.4%
ROE(3y)41.48%
ROE(5y)48.98%
ROIC(3y)19.35%
ROIC(5y)22.54%
ROICexc(3y)25.47%
ROICexc(5y)38.8%
ROICexgc(3y)34.51%
ROICexgc(5y)61%
ROCE(3y)26.19%
ROCE(5y)30.58%
ROICexcg growth 3Y-33%
ROICexcg growth 5Y-4.89%
ROICexc growth 3Y-24.39%
ROICexc growth 5Y-2.87%
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%
F-Score6
Asset Turnover2.81
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.41 | ||
| Debt/FCF | 0.83 | ||
| Debt/EBITDA | 0.44 | ||
| Cap/Depr | 81.52% | ||
| Cap/Sales | 1.7% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 80.69% | ||
| Profit Quality | 150.16% | ||
| Current Ratio | 1.03 | ||
| Quick Ratio | 0.39 | ||
| Altman-Z | N/A |
F-Score6
WACC9.68%
ROIC/WACC1.96
Cap/Depr(3y)89.65%
Cap/Depr(5y)87.75%
Cap/Sales(3y)1.85%
Cap/Sales(5y)1.69%
Profit Quality(3y)89.19%
Profit Quality(5y)120.88%
High Growth Momentum
Growth
EPS 1Y (TTM)0%
EPS 3Y-13.97%
EPS 5Y0.8%
EPS Q2Q%-5.15%
EPS Next Y3.85%
EPS Next 2Y7.67%
EPS Next 3Y12.46%
EPS Next 5Y19.51%
Revenue 1Y (TTM)-4.43%
Revenue growth 3Y-7.08%
Revenue growth 5Y-0.99%
Sales Q2Q%-4.77%
Revenue Next Year1.31%
Revenue Next 2Y2.01%
Revenue Next 3Y1.85%
Revenue Next 5Y2.18%
EBIT growth 1Y0.41%
EBIT growth 3Y-16.8%
EBIT growth 5Y-3.29%
EBIT Next Year56.76%
EBIT Next 3Y18.4%
EBIT Next 5Y12.44%
FCF growth 1Y106.22%
FCF growth 3Y-17.9%
FCF growth 5Y-5.24%
OCF growth 1Y42.72%
OCF growth 3Y-13.59%
OCF growth 5Y-3.94%