PENSKE AUTOMOTIVE GROUP INC (PAG) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:PAG - US70959W1036 - Common Stock
160.31 USD
+0.95 (+0.6%)
160.31 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to PAG. PAG was compared to 122 industry peers in the Specialty Retail industry. Both the profitability and the financial health of PAG get a neutral evaluation. Nothing too spectacular is happening here. PAG is not valued too expensively and it also shows a decent growth rate. PAG also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- PAG had positive earnings in the past year.
- In the past year PAG had a positive cash flow from operations.
- In the past 5 years PAG has always been profitable.
- Each year in the past 5 years PAG had a positive operating cash flow.
1.2 Ratios
- PAG has a better Return On Assets (5.51%) than 72.13% of its industry peers.
- The Return On Equity of PAG (16.53%) is better than 74.59% of its industry peers.
- PAG has a better Return On Invested Capital (6.49%) than 63.11% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for PAG is below the industry average of 12.24%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.51% | ||
| ROE | 16.53% | ||
| ROIC | 6.49% |
ROA(3y)7.33%
ROA(5y)6.98%
ROE(3y)24.4%
ROE(5y)23.77%
ROIC(3y)7.78%
ROIC(5y)7.29%
1.3 Margins
- Looking at the Profit Margin, with a value of 3.08%, PAG is in the better half of the industry, outperforming 68.03% of the companies in the same industry.
- In the last couple of years the Profit Margin of PAG has grown nicely.
- PAG has a better Operating Margin (4.22%) than 61.48% of its industry peers.
- PAG's Operating Margin has improved in the last couple of years.
- The Gross Margin of PAG (16.54%) is worse than 81.97% of its industry peers.
- PAG's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.22% | ||
| PM (TTM) | 3.08% | ||
| GM | 16.54% |
OM growth 3Y-6.61%
OM growth 5Y8.95%
PM growth 3Y-13.41%
PM growth 5Y9.91%
GM growth 3Y-1.79%
GM growth 5Y2%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), PAG is destroying value.
- Compared to 1 year ago, PAG has less shares outstanding
- PAG has less shares outstanding than it did 5 years ago.
- Compared to 1 year ago, PAG has a worse debt to assets ratio.
2.2 Solvency
- PAG has an Altman-Z score of 3.06. This indicates that PAG is financially healthy and has little risk of bankruptcy at the moment.
- With a decent Altman-Z score value of 3.06, PAG is doing good in the industry, outperforming 69.67% of the companies in the same industry.
- The Debt to FCF ratio of PAG is 7.32, which is on the high side as it means it would take PAG, 7.32 years of fcf income to pay off all of its debts.
- With a decent Debt to FCF ratio value of 7.32, PAG is doing good in the industry, outperforming 61.48% of the companies in the same industry.
- PAG has a Debt/Equity ratio of 0.92. This is a neutral value indicating PAG is somewhat dependend on debt financing.
- With a Debt to Equity ratio value of 0.92, PAG perfoms like the industry average, outperforming 45.08% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.92 | ||
| Debt/FCF | 7.32 | ||
| Altman-Z | 3.06 |
ROIC/WACC0.72
WACC8.99%
2.3 Liquidity
- PAG has a Current Ratio of 0.97. This is a bad value and indicates that PAG is not financially healthy enough and could expect problems in meeting its short term obligations.
- PAG has a Current ratio of 0.97. This is in the lower half of the industry: PAG underperforms 77.05% of its industry peers.
- PAG has a Quick Ratio of 0.97. This is a bad value and indicates that PAG is not financially healthy enough and could expect problems in meeting its short term obligations.
- With a Quick ratio value of 0.21, PAG is not doing good in the industry: 86.07% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.97 | ||
| Quick Ratio | 0.21 |
3. Growth
3.1 Past
- PAG shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.05%.
- PAG shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 20.82% yearly.
- PAG shows a small growth in Revenue. In the last year, the Revenue has grown by 2.25%.
- PAG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.61% yearly.
EPS 1Y (TTM)2.05%
EPS 3Y-3.27%
EPS 5Y20.82%
EPS Q2Q%-4.72%
Revenue 1Y (TTM)2.25%
Revenue growth 3Y6.02%
Revenue growth 5Y5.61%
Sales Q2Q%1.38%
3.2 Future
- PAG is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.93% yearly.
- The Revenue is expected to grow by 3.66% on average over the next years.
EPS Next Y-0.47%
EPS Next 2Y1.22%
EPS Next 3Y2.57%
EPS Next 5Y5.93%
Revenue Next Year0.84%
Revenue Next 2Y1.97%
Revenue Next 3Y2.59%
Revenue Next 5Y3.66%
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 11.50 indicates a reasonable valuation of PAG.
- PAG's Price/Earnings ratio is rather cheap when compared to the industry. PAG is cheaper than 82.79% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 27.25. PAG is valued rather cheaply when compared to this.
- Based on the Price/Forward Earnings ratio of 11.38, the valuation of PAG can be described as reasonable.
- PAG's Price/Forward Earnings ratio is rather cheap when compared to the industry. PAG is cheaper than 82.79% of the companies in the same industry.
- PAG's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.5 | ||
| Fwd PE | 11.38 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PAG indicates a somewhat cheap valuation: PAG is cheaper than 68.03% of the companies listed in the same industry.
- Based on the Price/Free Cash Flow ratio, PAG is valued a bit cheaper than 77.87% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.95 | ||
| EV/EBITDA | 8.2 |
4.3 Compensation for Growth
- The decent profitability rating of PAG may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.55
EPS Next 2Y1.22%
EPS Next 3Y2.57%
5. Dividend
5.1 Amount
- PAG has a Yearly Dividend Yield of 3.17%.
- PAG's Dividend Yield is rather good when compared to the industry average which is at 2.15. PAG pays more dividend than 87.70% of the companies in the same industry.
- PAG's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.17% |
5.2 History
- On average, the dividend of PAG grows each year by 21.07%, which is quite nice.
- PAG has been paying a dividend for at least 10 years, so it has a reliable track record.
- PAG has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)21.07%
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
- PAG pays out 35.22% of its income as dividend. This is a sustainable payout ratio.
- PAG's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP35.22%
EPS Next 2Y1.22%
EPS Next 3Y2.57%
PENSKE AUTOMOTIVE GROUP INC / PAG FAQ
What is the ChartMill fundamental rating of PENSKE AUTOMOTIVE GROUP INC (PAG) stock?
ChartMill assigns a fundamental rating of 5 / 10 to PAG.
What is the valuation status for PAG stock?
ChartMill assigns a valuation rating of 6 / 10 to PENSKE AUTOMOTIVE GROUP INC (PAG). This can be considered as Fairly Valued.
What is the profitability of PAG stock?
PENSKE AUTOMOTIVE GROUP INC (PAG) has a profitability rating of 6 / 10.
Can you provide the expected EPS growth for PAG stock?
The Earnings per Share (EPS) of PENSKE AUTOMOTIVE GROUP INC (PAG) is expected to decline by -0.47% in the next year.
Can you provide the dividend sustainability for PAG stock?
The dividend rating of PENSKE AUTOMOTIVE GROUP INC (PAG) is 7 / 10 and the dividend payout ratio is 35.22%.