BEST BUY CO INC (BBY)
US0865161014 - Common Stock
BBY gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 123 industry peers in the Specialty Retail industry. BBY has an excellent profitability rating, but there are some minor concerns on its financial health. BBY has a decent growth rate and is not valued too expensively. Finally BBY also has an excellent dividend rating. These ratings could make BBY a good candidate for 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.
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
With an excellent Return On Assets value of 8.06%, BBY belongs to the best of the industry, outperforming 81.15% of the companies in the same industry.
BBY has a better Return On Equity (40.55%) than 90.16% of its industry peers.
BBY has a better Return On Invested Capital (19.41%) than 87.70% of its industry peers.
BBY had an Average Return On Invested Capital over the past 3 years of 25.19%. This is significantly above the industry average of 12.26%.
The 3 year average ROIC (25.19%) for BBY is well above the current ROIC(19.41%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.06% | ||
| ROE | 40.55% | ||
| ROIC | 19.41% |
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
With a decent Profit Margin value of 2.96%, BBY is doing good in the industry, outperforming 66.39% of the companies in the same industry.
BBY's Profit Margin has declined in the last couple of years.
BBY's Operating Margin of 4.20% is in line compared to the rest of the industry. BBY outperforms 59.84% of its industry peers.
In the last couple of years the Operating Margin of BBY has declined.
With a Gross Margin value of 22.29%, BBY is not doing good in the industry: 77.05% 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 | 4.2% | ||
| PM (TTM) | 2.96% | ||
| GM | 22.29% |
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.
The number of shares outstanding for BBY has been reduced compared to 1 year ago.
BBY has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, BBY has a worse debt to assets ratio.
2.2 Solvency
BBY has an Altman-Z score of 4.28. This indicates that BBY is financially healthy and has little risk of bankruptcy at the moment.
BBY's Altman-Z score of 4.28 is amongst the best of the industry. BBY outperforms 84.43% of its industry peers.
BBY has a debt to FCF ratio of 0.85. This is a very positive value and a sign of high solvency as it would only need 0.85 years to pay back of all of its debts.
BBY has a better Debt to FCF ratio (0.85) than 82.79% of its industry peers.
BBY has a Debt/Equity ratio of 0.37. This is a healthy value indicating a solid balance between debt and equity.
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 | 0.85 | ||
| Altman-Z | 4.28 |
ROIC/WACC2.05
WACC9.46%
2.3 Liquidity
BBY has a Current Ratio of 1.01. This is a normal value and indicates that BBY is financially healthy and should not expect problems in meeting its short term obligations.
BBY's Current ratio of 1.01 is on the low side compared to the rest of the industry. BBY is outperformed by 72.13% of its industry peers.
A Quick Ratio of 0.34 indicates that BBY may have some problems paying its short term obligations.
The Quick ratio of BBY (0.34) is worse than 70.49% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.34 |
3. Growth
3.1 Past
BBY shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.99%.
BBY shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 3.47% yearly.
Looking at the last year, BBY shows a decrease in Revenue. The Revenue has decreased by -4.14% in the last year.
BBY shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.27% yearly.
EPS 1Y (TTM)2.99%
EPS 3Y-6.95%
EPS 5Y3.47%
EPS Q2Q%9.84%
Revenue 1Y (TTM)-4.14%
Revenue growth 3Y-2.76%
Revenue growth 5Y0.27%
Sales Q2Q%-3.08%
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.
The Revenue is expected to grow by 1.24% on average over the next years.
EPS Next Y-1%
EPS Next 2Y4.2%
EPS Next 3Y7.03%
EPS Next 5Y13.31%
Revenue Next Year-4.11%
Revenue Next 2Y-1.03%
Revenue Next 3Y0.38%
Revenue Next 5Y1.24%
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
Based on the Price/Earnings ratio of 13.67, the valuation of BBY can be described as correct.
Based on the Price/Earnings ratio, BBY is valued cheaper than 80.33% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 29.20, BBY is valued rather cheaply.
With a Price/Forward Earnings ratio of 12.93, BBY is valued correctly.
Compared to the rest of the industry, the Price/Forward Earnings ratio of BBY indicates a somewhat cheap valuation: BBY is cheaper than 72.95% of the companies listed in the same industry.
BBY's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 24.00.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.67 | ||
| Fwd PE | 12.93 |
4.2 Price Multiples
BBY's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. BBY is cheaper than 77.05% of the companies in the same industry.
79.51% 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 | 14.02 | ||
| EV/EBITDA | 7.11 |
4.3 Compensation for Growth
The decent profitability rating of BBY may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)3.94
EPS Next 2Y4.2%
EPS Next 3Y7.03%
5. Dividend
5.1 Amount
BBY has a Yearly Dividend Yield of 4.35%, which is a nice return.
Compared to an average industry Dividend Yield of 3.18, BBY pays a better dividend. On top of this BBY pays more dividend than 93.44% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.21, BBY pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.35% |
5.2 History
The dividend of BBY is nicely growing with an annual growth rate of 15.34%!
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)15.34%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
BBY pays out 63.81% 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.
DP63.81%
EPS Next 2Y4.2%
EPS Next 3Y7.03%
BEST BUY CO INC
NYSE:BBY (11/22/2024, 8:25:15 PM)
After market: 89.75 +0.21 (+0.23%)89.54
+3.03 (+3.5%)
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 Cap19.23B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.35% |
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)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
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 | 13.67 | ||
| Fwd PE | 12.93 | ||
| 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)3.94
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.06% | ||
| ROE | 40.55% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 4.2% | ||
| PM (TTM) | 2.96% | ||
| GM | 22.29% | ||
| 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 Turnover2.72
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 | 0.34 | ||
| 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)2.99%
EPS 3Y-6.95%
EPS 5Y
EPS Q2Q%
EPS Next Y-1%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-4.14%
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