PENSKE AUTOMOTIVE GROUP INC (PAG) Stock Fundamental Analysis
USA - NYSE:PAG - US70959W1036 - Common Stock
178.45 USD
-1.18 (-0.66%)
178.45 USD
0 (0%)
We assign a fundamental rating of 4 out of 10 to PAG. PAG was compared to 121 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 is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
PAG had positive earnings in the past year.
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
The Return On Assets of PAG (5.50%) is better than 72.73% of its industry peers.
PAG has a better Return On Equity (17.04%) than 76.86% of its industry peers.
PAG's Return On Invested Capital of 6.70% is fine compared to the rest of the industry. PAG outperforms 65.29% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PAG is below the industry average of 12.11%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.5% | ||
| ROE | 17.04% | ||
| ROIC | 6.7% |
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 has a Profit Margin of 3.13%. This is in the better half of the industry: PAG outperforms 69.42% of its industry peers.
PAG's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 4.30%, PAG is in the better half of the industry, outperforming 63.64% of the companies in the same industry.
In the last couple of years the Operating Margin of PAG has grown nicely.
PAG has a worse Gross Margin (16.58%) than 83.47% of its industry peers.
In the last couple of years the Gross Margin of PAG has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.3% | ||
| PM (TTM) | 3.13% | ||
| GM | 16.58% |
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.
PAG has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.03 indicates that PAG is not in any danger for bankruptcy at the moment.
The Altman-Z score of PAG (3.03) is better than 67.77% of its industry peers.
The Debt to FCF ratio of PAG is 9.30, which is on the high side as it means it would take PAG, 9.30 years of fcf income to pay off all of its debts.
PAG has a Debt to FCF ratio of 9.30. This is comparable to the rest of the industry: PAG outperforms 57.02% of its industry peers.
A Debt/Equity ratio of 0.91 indicates that PAG is somewhat dependend on debt financing.
PAG has a Debt to Equity ratio (0.91) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.91 | ||
| Debt/FCF | 9.3 | ||
| Altman-Z | 3.03 |
ROIC/WACC0.74
WACC9.01%
2.3 Liquidity
PAG has a Current Ratio of 0.90. This is a bad value and indicates that PAG is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.90, PAG is doing worse than 78.51% of the companies in the same industry.
A Quick Ratio of 0.21 indicates that PAG may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.21, PAG is doing worse than 88.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.21 |
3. Growth
3.1 Past
The earnings per share for PAG have decreased by -0.63% in the last year.
PAG shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 20.82% yearly.
Looking at the last year, PAG shows a small growth in Revenue. The Revenue has grown by 2.39% in the last year.
PAG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.61% yearly.
EPS 1Y (TTM)-0.63%
EPS 3Y-3.27%
EPS 5Y20.82%
EPS Q2Q%4.71%
Revenue 1Y (TTM)2.39%
Revenue growth 3Y6.02%
Revenue growth 5Y5.61%
Sales Q2Q%-0.45%
3.2 Future
The Earnings Per Share is expected to grow by 5.96% on average over the next years.
Based on estimates for the next years, PAG will show a small growth in Revenue. The Revenue will grow by 3.77% on average per year.
EPS Next Y2.75%
EPS Next 2Y2.14%
EPS Next 3Y3.04%
EPS Next 5Y5.96%
Revenue Next Year1.22%
Revenue Next 2Y2.51%
Revenue Next 3Y3.1%
Revenue Next 5Y3.77%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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 12.66.
PAG's Price/Earnings ratio is rather cheap when compared to the industry. PAG is cheaper than 80.99% of the companies in the same industry.
When comparing the Price/Earnings ratio of PAG to the average of the S&P500 Index (27.30), we can say PAG is valued rather cheaply.
A Price/Forward Earnings ratio of 12.44 indicates a correct valuation of PAG.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PAG indicates a somewhat cheap valuation: PAG is cheaper than 77.69% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.73, PAG is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.66 | ||
| Fwd PE | 12.44 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, PAG is valued a bit cheaper than 65.29% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PAG indicates a somewhat cheap valuation: PAG is cheaper than 78.51% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.22 | ||
| EV/EBITDA | 9.12 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates PAG does not grow enough to justify the current Price/Earnings ratio.
PAG has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)4.6
PEG (5Y)0.61
EPS Next 2Y2.14%
EPS Next 3Y3.04%
5. Dividend
5.1 Amount
PAG has a Yearly Dividend Yield of 2.69%.
PAG's Dividend Yield is rather good when compared to the industry average which is at 5.21. PAG pays more dividend than 88.43% of the companies in the same industry.
PAG's Dividend Yield is comparable with the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.69% |
5.2 History
The dividend of PAG is nicely growing with an annual growth rate of 21.07%!
PAG has paid a dividend for at least 10 years, which is 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
33.11% of the earnings are spent on dividend by PAG. This is a low number and sustainable payout ratio.
The dividend of PAG is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP33.11%
EPS Next 2Y2.14%
EPS Next 3Y3.04%
178.45
-1.18 (-0.66%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners76.68%
Inst Owner Change3.09%
Ins Owners0.85%
Ins Owner Change-5.82%
Market Cap11.78B
Analysts71.43
Price Target180.93 (1.39%)
Short Float %2.69%
Short Ratio5.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.69% |
Yearly Dividend4.1
Dividend Growth(5Y)21.07%
DP33.11%
Div Incr Years4
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.88%
Min EPS beat(2)2.72%
Max EPS beat(2)5.05%
EPS beat(4)3
Avg EPS beat(4)3.17%
Min EPS beat(4)-1.64%
Max EPS beat(4)6.57%
EPS beat(8)4
Avg EPS beat(8)0.21%
EPS beat(12)8
Avg EPS beat(12)1.58%
EPS beat(16)12
Avg EPS beat(16)5.29%
Revenue beat(2)0
Avg Revenue beat(2)-3.17%
Min Revenue beat(2)-4.32%
Max Revenue beat(2)-2.03%
Revenue beat(4)1
Avg Revenue beat(4)-1.88%
Min Revenue beat(4)-4.32%
Max Revenue beat(4)0.87%
Revenue beat(8)3
Avg Revenue beat(8)-0.84%
Revenue beat(12)7
Avg Revenue beat(12)0.66%
Revenue beat(16)10
Avg Revenue beat(16)0.98%
PT rev (1m)1.43%
PT rev (3m)3.27%
EPS NQ rev (1m)1.32%
EPS NQ rev (3m)1.42%
EPS NY rev (1m)1%
EPS NY rev (3m)2.52%
Revenue NQ rev (1m)0.49%
Revenue NQ rev (3m)-0.78%
Revenue NY rev (1m)-0.9%
Revenue NY rev (3m)-1.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.66 | ||
| Fwd PE | 12.44 | ||
| P/S | 0.39 | ||
| P/FCF | 18.22 | ||
| P/OCF | 12.26 | ||
| P/B | 2.1 | ||
| P/tB | 5.47 | ||
| EV/EBITDA | 9.12 |
EPS(TTM)14.1
EY7.9%
EPS(NY)14.35
Fwd EY8.04%
FCF(TTM)9.79
FCFY5.49%
OCF(TTM)14.55
OCFY8.16%
SpS463.01
BVpS85
TBVpS32.6
PEG (NY)4.6
PEG (5Y)0.61
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.5% | ||
| ROE | 17.04% | ||
| ROCE | 12.64% | ||
| ROIC | 6.7% | ||
| ROICexc | 6.77% | ||
| ROICexgc | 8.9% | ||
| OM | 4.3% | ||
| PM (TTM) | 3.13% | ||
| GM | 16.58% | ||
| FCFM | 2.11% |
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-Score7
Asset Turnover1.76
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.91 | ||
| Debt/FCF | 9.3 | ||
| Debt/EBITDA | 3.47 | ||
| Cap/Depr | 192.18% | ||
| Cap/Sales | 1.03% | ||
| Interest Coverage | 4.77 | ||
| Cash Conversion | 65.01% | ||
| Profit Quality | 67.59% | ||
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.21 | ||
| Altman-Z | 3.03 |
F-Score7
WACC9.01%
ROIC/WACC0.74
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)-0.63%
EPS 3Y-3.27%
EPS 5Y20.82%
EPS Q2Q%4.71%
EPS Next Y2.75%
EPS Next 2Y2.14%
EPS Next 3Y3.04%
EPS Next 5Y5.96%
Revenue 1Y (TTM)2.39%
Revenue growth 3Y6.02%
Revenue growth 5Y5.61%
Sales Q2Q%-0.45%
Revenue Next Year1.22%
Revenue Next 2Y2.51%
Revenue Next 3Y3.1%
Revenue Next 5Y3.77%
EBIT growth 1Y0.87%
EBIT growth 3Y-0.98%
EBIT growth 5Y15.06%
EBIT Next Year19.14%
EBIT Next 3Y4.67%
EBIT Next 5Y3.46%
FCF growth 1Y-24.31%
FCF growth 3Y-8.08%
FCF growth 5Y24.3%
OCF growth 1Y-18.85%
OCF growth 3Y-3.02%
OCF growth 5Y17.87%