PENSKE AUTOMOTIVE GROUP INC (PAG) Stock Fundamental Analysis
NYSE:PAG - New York Stock Exchange, Inc. - US70959W1036 - Common Stock - Currency: USD
PAG gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 122 industry peers in the Specialty Retail industry. While PAG is still in line with the averages on profitability rating, there are concerns on its financial health. PAG has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year PAG was profitable.
PAG had a positive operating cash flow in the past year.
PAG had positive earnings in each of the past 5 years.
PAG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 5.60%, PAG is in the better half of the industry, outperforming 71.31% of the companies in the same industry.
Looking at the Return On Equity, with a value of 17.57%, PAG is in the better half of the industry, outperforming 75.41% of the companies in the same industry.
PAG has a Return On Invested Capital of 6.85%. This is in the better half of the industry: PAG outperforms 65.57% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PAG is significantly below the industry average of 12.95%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.6% | ||
| ROE | 17.57% | ||
| ROIC | 6.85% |
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
PAG's Profit Margin of 3.10% is fine compared to the rest of the industry. PAG outperforms 69.67% of its industry peers.
In the last couple of years the Profit Margin of PAG has grown nicely.
With a decent Operating Margin value of 4.26%, PAG is doing good in the industry, outperforming 62.30% of the companies in the same industry.
PAG's Operating Margin has improved in the last couple of years.
PAG's Gross Margin of 16.45% is on the low side compared to the rest of the industry. PAG is outperformed by 84.43% of its industry peers.
In the last couple of years the Gross Margin of PAG has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.26% | ||
| PM (TTM) | 3.1% | ||
| GM | 16.45% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so 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.
PAG has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.10 indicates that PAG is not in any danger for bankruptcy at the moment.
PAG has a better Altman-Z score (3.10) than 70.49% of its industry peers.
PAG has a debt to FCF ratio of 8.64. This is a slightly negative value and a sign of low solvency as PAG would need 8.64 years to pay back of all of its debts.
PAG has a Debt to FCF ratio (8.64) which is comparable to the rest of the industry.
PAG has a Debt/Equity ratio of 0.92. This is a neutral value indicating PAG is somewhat dependend on debt financing.
PAG's Debt to Equity ratio of 0.92 is in line compared to the rest of the industry. PAG outperforms 44.26% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.92 | ||
| Debt/FCF | 8.64 | ||
| Altman-Z | 3.1 |
ROIC/WACC0.77
WACC8.91%
2.3 Liquidity
A Current Ratio of 0.90 indicates that PAG may have some problems paying its short term obligations.
PAG's Current ratio of 0.90 is on the low side compared to the rest of the industry. PAG is outperformed by 78.69% of its industry peers.
A Quick Ratio of 0.23 indicates that PAG may have some problems paying its short term obligations.
With a Quick ratio value of 0.23, PAG is not doing good in the industry: 83.61% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.23 |
3. Growth
3.1 Past
PAG shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -7.07%.
The Earnings Per Share has been growing by 20.82% on average over the past years. This is a very strong growth
PAG shows a small growth in Revenue. In the last year, the Revenue has grown by 3.29%.
Measured over the past years, PAG shows a small growth in Revenue. The Revenue has been growing by 5.61% on average per year.
EPS 1Y (TTM)-7.07%
EPS 3Y-3.27%
EPS 5Y20.82%
EPS Q2Q%5.61%
Revenue 1Y (TTM)3.29%
Revenue growth 3Y6.02%
Revenue growth 5Y5.61%
Sales Q2Q%2.1%
3.2 Future
Based on estimates for the next years, PAG will show a small growth in Earnings Per Share. The EPS will grow by 6.00% on average per year.
PAG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.79% yearly.
EPS Next Y1.73%
EPS Next 2Y2.71%
EPS Next 3Y2.14%
EPS Next 5Y6%
Revenue Next Year2.34%
Revenue Next 2Y3.15%
Revenue Next 3Y3.35%
Revenue Next 5Y3.79%
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 decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
PAG is valuated correctly with a Price/Earnings ratio of 12.59.
Based on the Price/Earnings ratio, PAG is valued a bit cheaper than the industry average as 79.51% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.30. PAG is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 12.09, which indicates a correct valuation of PAG.
Based on the Price/Forward Earnings ratio, PAG is valued a bit cheaper than the industry average as 73.77% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.06, PAG is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.59 | ||
| Fwd PE | 12.09 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, PAG is valued a bit cheaper than 62.30% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, PAG is valued a bit cheaper than the industry average as 75.41% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.48 | ||
| EV/EBITDA | 9.12 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PAG has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)7.27
PEG (5Y)0.6
EPS Next 2Y2.71%
EPS Next 3Y2.14%
5. Dividend
5.1 Amount
PAG has a Yearly Dividend Yield of 2.57%. Purely for dividend investing, there may be better candidates out there.
PAG's Dividend Yield is rather good when compared to the industry average which is at 4.90. PAG pays more dividend than 86.07% of the companies in the same industry.
PAG's Dividend Yield is comparable with the S&P500 average which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.57% |
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 31.39% of its income as dividend. This is a sustainable payout ratio.
The dividend of PAG is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP31.39%
EPS Next 2Y2.71%
EPS Next 3Y2.14%
175.36
-1.46 (-0.83%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners76.73%
Inst Owner Change0%
Ins Owners0.86%
Ins Owner Change-4.26%
Market Cap11.60B
Analysts72
Price Target177.38 (1.15%)
Short Float %2.55%
Short Ratio5.7
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.57% |
Yearly Dividend4.1
Dividend Growth(5Y)21.07%
DP31.39%
Div Incr Years4
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.65%
Min EPS beat(2)2.72%
Max EPS beat(2)6.57%
EPS beat(4)3
Avg EPS beat(4)3.3%
Min EPS beat(4)-1.64%
Max EPS beat(4)6.57%
EPS beat(8)4
Avg EPS beat(8)0.1%
EPS beat(12)8
Avg EPS beat(12)1.93%
EPS beat(16)12
Avg EPS beat(16)8.22%
Revenue beat(2)1
Avg Revenue beat(2)-0.58%
Min Revenue beat(2)-2.03%
Max Revenue beat(2)0.87%
Revenue beat(4)2
Avg Revenue beat(4)-0.65%
Min Revenue beat(4)-2.04%
Max Revenue beat(4)0.87%
Revenue beat(8)4
Avg Revenue beat(8)0.04%
Revenue beat(12)7
Avg Revenue beat(12)0.82%
Revenue beat(16)11
Avg Revenue beat(16)1.83%
PT rev (1m)1.25%
PT rev (3m)-3.63%
EPS NQ rev (1m)-0.25%
EPS NQ rev (3m)3.35%
EPS NY rev (1m)1.5%
EPS NY rev (3m)-0.17%
Revenue NQ rev (1m)-0.21%
Revenue NQ rev (3m)1.3%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)-0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.59 | ||
| Fwd PE | 12.09 | ||
| P/S | 0.38 | ||
| P/FCF | 17.48 | ||
| P/OCF | 11.53 | ||
| P/B | 2.15 | ||
| P/tB | 5.79 | ||
| EV/EBITDA | 9.12 |
EPS(TTM)13.93
EY7.94%
EPS(NY)14.5
Fwd EY8.27%
FCF(TTM)10.03
FCFY5.72%
OCF(TTM)15.21
OCFY8.67%
SpS462.63
BVpS81.53
TBVpS30.3
PEG (NY)7.27
PEG (5Y)0.6
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.6% | ||
| ROE | 17.57% | ||
| ROCE | 12.75% | ||
| ROIC | 6.85% | ||
| ROICexc | 6.91% | ||
| ROICexgc | 9.1% | ||
| OM | 4.26% | ||
| PM (TTM) | 3.1% | ||
| GM | 16.45% | ||
| FCFM | 2.17% |
ROA(3y)7.33%
ROA(5y)6.98%
ROE(3y)24.4%
ROE(5y)23.77%
ROIC(3y)7.78%
ROIC(5y)7.29%
ROICexc(3y)7.84%
ROICexc(5y)7.34%
ROICexgc(3y)10.17%
ROICexgc(5y)9.53%
ROCE(3y)14.2%
ROCE(5y)13.12%
ROICexcg growth 3Y-7.25%
ROICexcg growth 5Y13.31%
ROICexc growth 3Y-7.29%
ROICexc growth 5Y12.13%
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%
F-Score5
Asset Turnover1.81
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.92 | ||
| Debt/FCF | 8.64 | ||
| Debt/EBITDA | 3.38 | ||
| Cap/Depr | 214.12% | ||
| Cap/Sales | 1.12% | ||
| Interest Coverage | 4.79 | ||
| Cash Conversion | 68.71% | ||
| Profit Quality | 70.01% | ||
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.23 | ||
| Altman-Z | 3.1 |
F-Score5
WACC8.91%
ROIC/WACC0.77
Cap/Depr(3y)240.48%
Cap/Depr(5y)217.45%
Cap/Sales(3y)1.17%
Cap/Sales(5y)1.08%
Profit Quality(3y)80.57%
Profit Quality(5y)103.28%
High Growth Momentum
Growth
EPS 1Y (TTM)-7.07%
EPS 3Y-3.27%
EPS 5Y20.82%
EPS Q2Q%5.61%
EPS Next Y1.73%
EPS Next 2Y2.71%
EPS Next 3Y2.14%
EPS Next 5Y6%
Revenue 1Y (TTM)3.29%
Revenue growth 3Y6.02%
Revenue growth 5Y5.61%
Sales Q2Q%2.1%
Revenue Next Year2.34%
Revenue Next 2Y3.15%
Revenue Next 3Y3.35%
Revenue Next 5Y3.79%
EBIT growth 1Y-3.09%
EBIT growth 3Y-0.98%
EBIT growth 5Y15.06%
EBIT Next Year18.91%
EBIT Next 3Y7.27%
EBIT Next 5Y3.47%
FCF growth 1Y-37.44%
FCF growth 3Y-8.08%
FCF growth 5Y24.3%
OCF growth 1Y-27.57%
OCF growth 3Y-3.02%
OCF growth 5Y17.87%