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 121 industry peers in the Specialty Retail industry. PAG has a medium profitability rating, but doesn't score so well on its financial health evaluation. PAG has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year PAG was profitable.
PAG had a positive operating cash flow in the past year.
Each year in the past 5 years PAG has been profitable.
Each year in the past 5 years PAG had a positive operating cash flow.
1.2 Ratios
PAG's Return On Assets of 5.50% is fine compared to the rest of the industry. PAG outperforms 69.42% of its industry peers.
PAG has a Return On Equity of 17.64%. This is in the better half of the industry: PAG outperforms 75.21% of its industry peers.
PAG's Return On Invested Capital of 6.88% is fine compared to the rest of the industry. PAG outperforms 61.98% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PAG is significantly below the industry average of 14.13%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.5% | ||
| ROE | 17.64% | ||
| ROIC | 6.88% |
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 3.02% is fine compared to the rest of the industry. PAG outperforms 67.77% of its industry peers.
PAG's Profit Margin has improved in the last couple of years.
PAG has a Operating Margin (4.32%) which is comparable to the rest of the industry.
In the last couple of years the Operating Margin of PAG has grown nicely.
Looking at the Gross Margin, with a value of 16.46%, PAG is doing worse than 84.30% of the companies in the same industry.
PAG's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.32% | ||
| PM (TTM) | 3.02% | ||
| 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
PAG has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for PAG has been reduced compared to 1 year ago.
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
An Altman-Z score of 3.03 indicates that PAG is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 3.03, PAG is doing good in the industry, outperforming 72.73% of the companies in the same industry.
PAG has a debt to FCF ratio of 7.24. This is a slightly negative value and a sign of low solvency as PAG would need 7.24 years to pay back of all of its debts.
PAG has a Debt to FCF ratio of 7.24. This is comparable to the rest of the industry: PAG outperforms 52.89% of its industry peers.
PAG has a Debt/Equity ratio of 0.99. This is a neutral value indicating PAG is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.99, PAG perfoms like the industry average, outperforming 42.98% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.99 | ||
| Debt/FCF | 7.24 | ||
| Altman-Z | 3.03 |
ROIC/WACC0.81
WACC8.53%
2.3 Liquidity
PAG has a Current Ratio of 0.91. This is a bad value and indicates that PAG is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of PAG (0.91) is worse than 80.99% of its industry peers.
A Quick Ratio of 0.20 indicates that PAG may have some problems paying its short term obligations.
PAG has a Quick ratio of 0.20. This is amonst the worse of the industry: PAG underperforms 86.78% of its industry peers.
| 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 6.13% on average over the next years.
The Revenue is expected to grow by 4.25% on average over the next years.
EPS Next Y1.07%
EPS Next 2Y2.77%
EPS Next 3Y1.34%
EPS Next 5Y6.13%
Revenue Next Year2.66%
Revenue Next 2Y3%
Revenue Next 3Y4.3%
Revenue Next 5Y4.25%
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
The Price/Earnings ratio is 11.25, which indicates a very decent valuation of PAG.
Compared to the rest of the industry, the Price/Earnings ratio of PAG indicates a somewhat cheap valuation: PAG is cheaper than 78.51% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of PAG to the average of the S&P500 Index (27.63), we can say PAG is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 11.13, the valuation of PAG can be described as reasonable.
Based on the Price/Forward Earnings ratio, PAG is valued a bit cheaper than 74.38% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 20.85. PAG is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.25 | ||
| Fwd PE | 11.13 |
4.2 Price Multiples
PAG's Enterprise Value to EBITDA is on the same level as the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PAG indicates a somewhat cheap valuation: PAG is cheaper than 72.73% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.73 | ||
| EV/EBITDA | 8.04 |
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)10.56
PEG (5Y)0.54
EPS Next 2Y2.77%
EPS Next 3Y1.34%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.92%, PAG has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 5.62, PAG pays a better dividend. On top of this PAG pays more dividend than 84.30% of the companies listed in the same industry.
PAG's Dividend Yield is comparable with the S&P500 average which is at 2.51.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.92% |
5.2 History
The dividend of PAG is nicely growing with an annual growth rate of 21.07%!
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 29.86% 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.
DP29.86%
EPS Next 2Y2.77%
EPS Next 3Y1.34%
154.71
+3.77 (+2.5%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners75.67%
Inst Owner Change0.35%
Ins Owners1.13%
Ins Owner Change1.45%
Market Cap10.33B
Analysts70.67
Price Target184.07 (18.98%)
Short Float %1.8%
Short Ratio4.61
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.92% |
Yearly Dividend4.1
Dividend Growth(5Y)21.07%
DP29.86%
Div Incr Years4
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.47%
Min EPS beat(2)-1.64%
Max EPS beat(2)6.57%
EPS beat(4)2
Avg EPS beat(4)1.34%
Min EPS beat(4)-5.13%
Max EPS beat(4)6.57%
EPS beat(8)4
Avg EPS beat(8)0.19%
EPS beat(12)8
Avg EPS beat(12)3.79%
EPS beat(16)12
Avg EPS beat(16)9.54%
Revenue beat(2)1
Avg Revenue beat(2)-0.58%
Min Revenue beat(2)-2.04%
Max Revenue beat(2)0.87%
Revenue beat(4)2
Avg Revenue beat(4)-0.45%
Min Revenue beat(4)-2.04%
Max Revenue beat(4)0.87%
Revenue beat(8)5
Avg Revenue beat(8)0.79%
Revenue beat(12)8
Avg Revenue beat(12)1.74%
Revenue beat(16)12
Avg Revenue beat(16)2.17%
PT rev (1m)0.8%
PT rev (3m)0.69%
EPS NQ rev (1m)1.05%
EPS NQ rev (3m)2.77%
EPS NY rev (1m)-1.49%
EPS NY rev (3m)-2.38%
Revenue NQ rev (1m)-0.21%
Revenue NQ rev (3m)1.96%
Revenue NY rev (1m)-0.7%
Revenue NY rev (3m)-0.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.25 | ||
| Fwd PE | 11.13 | ||
| P/S | 0.34 | ||
| P/FCF | 12.73 | ||
| P/OCF | 8.75 | ||
| P/B | 1.98 | ||
| P/tB | 5.65 | ||
| EV/EBITDA | 8.04 |
EPS(TTM)13.75
EY8.89%
EPS(NY)13.9
Fwd EY8.98%
FCF(TTM)12.15
FCFY7.85%
OCF(TTM)17.67
OCFY11.42%
SpS456.26
BVpS78.05
TBVpS27.37
PEG (NY)10.56
PEG (5Y)0.54
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.5% | ||
| ROE | 17.64% | ||
| ROCE | 12.87% | ||
| ROIC | 6.88% | ||
| ROICexc | 6.92% | ||
| ROICexgc | 9.08% | ||
| OM | 4.32% | ||
| PM (TTM) | 3.02% | ||
| GM | 16.46% | ||
| FCFM | 2.66% |
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 Turnover1.82
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.99 | ||
| Debt/FCF | 7.24 | ||
| Debt/EBITDA | 3.5 | ||
| Cap/Depr | 233.35% | ||
| Cap/Sales | 1.21% | ||
| Interest Coverage | 4.85 | ||
| Cash Conversion | 80% | ||
| Profit Quality | 88.27% | ||
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.2 | ||
| Altman-Z | 3.03 |
F-Score5
WACC8.53%
ROIC/WACC0.81
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)-14.54%
EPS 3Y-3.27%
EPS 5Y20.82%
EPS Q2Q%2.61%
EPS Next Y1.07%
EPS Next 2Y2.77%
EPS Next 3Y1.34%
EPS Next 5Y6.13%
Revenue 1Y (TTM)3.14%
Revenue growth 3Y6.02%
Revenue growth 5Y5.61%
Sales Q2Q%6.16%
Revenue Next Year2.66%
Revenue Next 2Y3%
Revenue Next 3Y4.3%
Revenue Next 5Y4.25%
EBIT growth 1Y-5.42%
EBIT growth 3Y-0.98%
EBIT growth 5Y15.06%
EBIT Next Year13.2%
EBIT Next 3Y-0.66%
EBIT Next 5Y3.93%
FCF growth 1Y12.92%
FCF growth 3Y-8.08%
FCF growth 5Y24.3%
OCF growth 1Y7.88%
OCF growth 3Y-3.02%
OCF growth 5Y17.87%