BEST BUY CO INC (BBY) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:BBY - US0865161014 - Common Stock
67.05 USD
-0.01 (-0.01%)
67.05 USD
0 (0%)
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. Both the profitability and the financial health of BBY get a neutral evaluation. Nothing too spectacular is happening here. BBY is valued quite cheap, but it does not seem to be growing. Finally 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.
- In the past year BBY had a positive cash flow from operations.
- 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's Return On Assets of 3.84% is fine compared to the rest of the industry. BBY outperforms 62.81% of its industry peers.
- With an excellent Return On Equity value of 24.31%, BBY belongs to the best of the industry, outperforming 82.64% of the companies in the same industry.
- BBY has a better Return On Invested Capital (19.29%) than 87.60% of its industry peers.
- BBY had an Average Return On Invested Capital over the past 3 years of 19.35%. This 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 (1.54%) which is comparable to the rest of the industry.
- BBY's Profit Margin has declined in the last couple of years.
- The Operating Margin of BBY (4.16%) is better than 60.33% of its industry peers.
- In the last couple of years the Operating Margin of BBY has declined.
- With a Gross Margin value of 22.50%, BBY is not doing good in the industry: 77.69% of the companies in the same industry are doing better.
- 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
- 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
- BBY has less shares outstanding than it did 5 years ago.
- BBY has a worse debt/assets ratio than last year.
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.
- The Debt to FCF ratio of BBY (0.77) is better than 81.82% 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 57.02% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | 0.77 | ||
| Altman-Z | N/A |
ROIC/WACC2.02
WACC9.54%
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.
- The Current ratio of BBY (1.05) is worse than 71.90% of its industry peers.
- A Quick Ratio of 0.26 indicates that BBY may have some problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 0.26, BBY is doing worse than 82.64% 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.
- The Earnings Per Share has been growing slightly by 0.80% on average over the past years.
- Looking at the last year, BBY shows a decrease in Revenue. The Revenue has decreased by -0.95% in the last 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
- Based on estimates for the next years, BBY will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.95% on average per year.
- BBY is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.25% yearly.
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.
- 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 10.46, which indicates a very decent valuation of BBY.
- Based on the Price/Earnings ratio, BBY is valued cheaply inside the industry as 84.30% of the companies are valued more expensively.
- Compared to an average S&P500 Price/Earnings ratio of 27.21, BBY is valued rather cheaply.
- BBY is valuated reasonably with a Price/Forward Earnings ratio of 9.86.
- Based on the Price/Forward Earnings ratio, BBY is valued cheaply inside the industry as 85.12% of the companies are valued more expensively.
- BBY is valuated cheaply when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.46 | ||
| Fwd PE | 9.86 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, BBY is valued cheaper than 86.78% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, BBY is valued cheaper than 86.78% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.3 | ||
| EV/EBITDA | 5.54 |
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)213.95
PEG (5Y)13.03
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.
- Compared to an average industry Dividend Yield of 2.15, BBY pays a better dividend. On top of this BBY pays more dividend than 95.04% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.81, 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 paid a dividend for at least 10 years, which is a reliable track record.
- BBY has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
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%.