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 5 out of 10. The analysis compared the fundamentals against 120 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 decent growth rate and is not valued too expensively.
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.
In the past 5 years PAG has always been profitable.
Of the past 5 years PAG 4 years had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 5.12%, PAG is doing good in the industry, outperforming 68.38% of the companies in the same industry.
The Return On Equity of PAG (16.78%) is better than 75.21% of its industry peers.
PAG's Return On Invested Capital of 6.63% is fine compared to the rest of the industry. PAG outperforms 61.54% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PAG is below the industry average of 12.30%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.12% | ||
| ROE | 16.78% | ||
| ROIC | 6.63% |
ROA(3y)7.33%
ROA(5y)6.98%
ROE(3y)24.38%
ROE(5y)23.76%
ROIC(3y)7.78%
ROIC(5y)7.29%
1.3 Margins
With a decent Profit Margin value of 2.91%, PAG is doing good in the industry, outperforming 64.96% of the companies in the same industry.
PAG's Profit Margin has improved in the last couple of years.
PAG has a better Operating Margin (4.30%) than 61.54% of its industry peers.
In the last couple of years the Operating Margin of PAG has grown nicely.
The Gross Margin of PAG (16.46%) is worse than 85.47% 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) | 2.91% | ||
| GM | 16.46% |
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
PAG has an Altman-Z score of 2.98. This is not the best score and indicates that PAG is in the grey zone with still only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.98, PAG is in the better half of the industry, outperforming 68.38% of the companies in the same industry.
PAG has a debt to FCF ratio of 9.34. This is a negative value and a sign of low solvency as PAG would need 9.34 years to pay back of all of its debts.
PAG has a Debt to FCF ratio (9.34) which is in line with its industry peers.
PAG has a Debt/Equity ratio of 1.02. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.02, PAG perfoms like the industry average, outperforming 41.03% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.02 | ||
| Debt/FCF | 9.34 | ||
| Altman-Z | 2.98 |
ROIC/WACC0.7
WACC9.41%
2.3 Liquidity
A Current Ratio of 0.91 indicates that PAG may have some problems paying its short term obligations.
PAG's Current ratio of 0.91 is on the low side compared to the rest of the industry. PAG is outperformed by 82.91% of its industry peers.
A Quick Ratio of 0.20 indicates that PAG may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.20, PAG is doing worse than 88.03% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.2 |
3. Growth
3.1 Past
The earnings per share for PAG have decreased strongly by -14.54% 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.
The Revenue has been growing slightly by 3.14% in the past 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)-14.54%
EPS 3Y-3.27%
EPS 5Y20.82%
EPS Q2Q%2.61%
Revenue 1Y (TTM)3.14%
Revenue growth 3Y6.02%
Revenue growth 5Y5.61%
Sales Q2Q%6.16%
3.2 Future
The Earnings Per Share is expected to grow by 6.17% 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 5.63% on average per year.
EPS Next Y2.6%
EPS Next 2Y2.32%
EPS Next 3Y3.54%
EPS Next 5Y6.17%
Revenue Next Year2.57%
Revenue Next 2Y2.85%
Revenue Next 3Y6.13%
Revenue Next 5Y5.63%
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 stable.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 11.90, the valuation of PAG can be described as reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of PAG indicates a rather cheap valuation: PAG is cheaper than 82.05% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 29.63. PAG is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 11.60, which indicates a very decent valuation of PAG.
74.36% of the companies in the same industry are more expensive than PAG, based on the Price/Forward Earnings ratio.
PAG is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.9 | ||
| Fwd PE | 11.6 |
4.2 Price Multiples
PAG's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. PAG is cheaper than 65.81% 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 74.36% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.86 | ||
| EV/EBITDA | 9 |
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)4.58
PEG (5Y)0.57
EPS Next 2Y2.32%
EPS Next 3Y3.54%
5. Dividend
5.1 Amount
PAG has a Yearly Dividend Yield of 2.64%.
PAG's Dividend Yield is rather good when compared to the industry average which is at 4.31. PAG pays more dividend than 87.18% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.27, PAG has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.64% |
5.2 History
The dividend of PAG is nicely growing with an annual growth rate of 14.30%!
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)14.3%
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
28.40% 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.
DP28.4%
EPS Next 2Y2.32%
EPS Next 3Y3.54%
163.59
-4.33 (-2.58%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners75.67%
Inst Owner Change-0.06%
Ins Owners1.13%
Ins Owner Change0.08%
Market Cap10.92B
Analysts70.67
Price Target182.61 (11.63%)
Short Float %1.92%
Short Ratio5.87
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.64% |
Yearly Dividend2.76
Dividend Growth(5Y)14.3%
DP28.4%
Div Incr Years4
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.96%
Min EPS beat(2)-1.64%
Max EPS beat(2)5.57%
EPS beat(4)1
Avg EPS beat(4)-2.17%
Min EPS beat(4)-7.49%
Max EPS beat(4)5.57%
EPS beat(8)4
Avg EPS beat(8)0.05%
EPS beat(12)8
Avg EPS beat(12)3.78%
EPS beat(16)12
Avg EPS beat(16)10.1%
Revenue beat(2)1
Avg Revenue beat(2)-0.73%
Min Revenue beat(2)-2.04%
Max Revenue beat(2)0.58%
Revenue beat(4)1
Avg Revenue beat(4)-0.7%
Min Revenue beat(4)-2.04%
Max Revenue beat(4)0.58%
Revenue beat(8)5
Avg Revenue beat(8)1.67%
Revenue beat(12)8
Avg Revenue beat(12)1.74%
Revenue beat(16)12
Avg Revenue beat(16)2.14%
PT rev (1m)-1.54%
PT rev (3m)0.21%
EPS NQ rev (1m)0.42%
EPS NQ rev (3m)1.82%
EPS NY rev (1m)0.01%
EPS NY rev (3m)0.27%
Revenue NQ rev (1m)-0.07%
Revenue NQ rev (3m)-0.47%
Revenue NY rev (1m)0.07%
Revenue NY rev (3m)-0.36%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.9 | ||
| Fwd PE | 11.6 | ||
| P/S | 0.36 | ||
| P/FCF | 16.86 | ||
| P/OCF | 10.57 | ||
| P/B | 2.1 | ||
| P/tB | 6.12 | ||
| EV/EBITDA | 9 |
EPS(TTM)13.75
EY8.41%
EPS(NY)14.11
Fwd EY8.62%
FCF(TTM)9.7
FCFY5.93%
OCF(TTM)15.48
OCFY9.46%
SpS449.41
BVpS77.93
TBVpS26.72
PEG (NY)4.58
PEG (5Y)0.57
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.12% | ||
| ROE | 16.78% | ||
| ROCE | 12.51% | ||
| ROIC | 6.63% | ||
| ROICexc | 6.68% | ||
| ROICexgc | 8.76% | ||
| OM | 4.3% | ||
| PM (TTM) | 2.91% | ||
| GM | 16.46% | ||
| FCFM | 2.16% |
ROA(3y)7.33%
ROA(5y)6.98%
ROE(3y)24.38%
ROE(5y)23.76%
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 Turnover1.76
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.02 | ||
| Debt/FCF | 9.34 | ||
| Debt/EBITDA | 3.67 | ||
| Cap/Depr | 249.55% | ||
| Cap/Sales | 1.29% | ||
| Interest Coverage | 4.99 | ||
| Cash Conversion | 71.57% | ||
| Profit Quality | 74.18% | ||
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.2 | ||
| Altman-Z | 2.98 |
F-Score5
WACC9.41%
ROIC/WACC0.7
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-14.54%
EPS 3Y-3.27%
EPS 5Y20.82%
EPS Q2Q%2.61%
EPS Next Y2.6%
EPS Next 2Y2.32%
EPS Next 3Y3.54%
EPS Next 5Y6.17%
Revenue 1Y (TTM)3.14%
Revenue growth 3Y6.02%
Revenue growth 5Y5.61%
Sales Q2Q%6.16%
Revenue Next Year2.57%
Revenue Next 2Y2.85%
Revenue Next 3Y6.13%
Revenue Next 5Y5.63%
EBIT growth 1Y-9.28%
EBIT growth 3Y-0.98%
EBIT growth 5Y15.06%
EBIT Next Year14.77%
EBIT Next 3Y0.8%
EBIT Next 5Y2.9%
FCF growth 1Y-29.14%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-18.81%
OCF growth 3YN/A
OCF growth 5YN/A