PHILLIPS EDISON & COMPANY IN (PECO) Stock Fundamental Analysis
NASDAQ:PECO - Nasdaq - US71844V2016 - REIT - Currency: USD
We assign a fundamental rating of 5 out of 10 to PECO. PECO was compared to 129 industry peers in the Diversified REITs industry. PECO scores excellent on profitability, but there are concerns on its financial health. While showing a medium growth rate, PECO is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
PECO had positive earnings in the past year.
In the past year PECO had a positive cash flow from operations.
In the past 5 years PECO has always been profitable.
Each year in the past 5 years PECO had a positive operating cash flow.
1.2 Ratios
PECO has a Return On Assets of 1.24%. This is in the better half of the industry: PECO outperforms 62.79% of its industry peers.
PECO has a Return On Equity (2.70%) which is in line with its industry peers.
The Return On Invested Capital of PECO (2.78%) is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for PECO is in line with the industry average of 3.18%.
The 3 year average ROIC (2.51%) for PECO is below the current ROIC(2.78%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.24% | ||
| ROE | 2.7% | ||
| ROIC | 2.78% |
ROA(3y)1.14%
ROA(5y)0.77%
ROE(3y)2.44%
ROE(5y)1.66%
ROIC(3y)2.51%
ROIC(5y)2.07%
1.3 Margins
The Profit Margin of PECO (9.48%) is better than 61.24% of its industry peers.
PECO's Profit Margin has improved in the last couple of years.
PECO's Operating Margin of 25.95% is in line compared to the rest of the industry. PECO outperforms 57.36% of its industry peers.
PECO's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 71.22%, PECO is doing good in the industry, outperforming 65.12% of the companies in the same industry.
PECO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.95% | ||
| PM (TTM) | 9.48% | ||
| GM | 71.22% |
OM growth 3Y23.39%
OM growth 5Y7%
PM growth 3Y49.54%
PM growth 5YN/A
GM growth 3Y0.43%
GM growth 5Y0.35%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), PECO is destroying value.
Compared to 1 year ago, PECO has more shares outstanding
The number of shares outstanding for PECO has been increased compared to 5 years ago.
Compared to 1 year ago, PECO has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.83, we must say that PECO is in the distress zone and has some risk of bankruptcy.
PECO's Altman-Z score of 0.83 is fine compared to the rest of the industry. PECO outperforms 65.89% of its industry peers.
PECO has a debt to FCF ratio of 8.80. This is a slightly negative value and a sign of low solvency as PECO would need 8.80 years to pay back of all of its debts.
PECO has a Debt to FCF ratio of 8.80. This is amongst the best in the industry. PECO outperforms 93.02% of its industry peers.
A Debt/Equity ratio of 0.91 indicates that PECO is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.91, PECO is in the better half of the industry, outperforming 62.79% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.91 | ||
| Debt/FCF | 8.8 | ||
| Altman-Z | 0.83 |
ROIC/WACC0.39
WACC7.07%
2.3 Liquidity
A Current Ratio of 0.11 indicates that PECO may have some problems paying its short term obligations.
PECO has a worse Current ratio (0.11) than 95.35% of its industry peers.
PECO has a Quick Ratio of 0.11. This is a bad value and indicates that PECO is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.11, PECO is not doing good in the industry: 95.35% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.11 | ||
| Quick Ratio | 0.11 |
3. Growth
3.1 Past
PECO shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.04%.
Measured over the past years, PECO shows a very strong growth in Earnings Per Share. The EPS has been growing by 55.36% on average per year.
Looking at the last year, PECO shows a quite strong growth in Revenue. The Revenue has grown by 8.40% in the last year.
PECO shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.27% yearly.
EPS 1Y (TTM)2.04%
EPS 3Y55.36%
EPS 5YN/A
EPS Q2Q%36.36%
Revenue 1Y (TTM)8.4%
Revenue growth 3Y7.47%
Revenue growth 5Y4.27%
Sales Q2Q%12.04%
3.2 Future
PECO is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 17.61% yearly.
Based on estimates for the next years, PECO will show a small growth in Revenue. The Revenue will grow by 7.74% on average per year.
EPS Next Y17.3%
EPS Next 2Y17.61%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year8.25%
Revenue Next 2Y7.74%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 71.90, PECO can be considered very expensive at the moment.
PECO's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 29.35, PECO is valued quite expensively.
The Price/Forward Earnings ratio is 61.30, which means the current valuation is very expensive for PECO.
The rest of the industry has a similar Price/Forward Earnings ratio as PECO.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.10, PECO is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 71.9 | ||
| Fwd PE | 61.3 |
4.2 Price Multiples
PECO's Enterprise Value to EBITDA ratio is in line with the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PECO indicates a somewhat cheap valuation: PECO is cheaper than 74.42% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.78 | ||
| EV/EBITDA | 15.55 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates PECO does not grow enough to justify the current Price/Earnings ratio.
PECO has a very decent profitability rating, which may justify a higher PE ratio.
PECO's earnings are expected to grow with 17.61% in the coming years. This may justify a more expensive valuation.
PEG (NY)4.16
PEG (5Y)N/A
EPS Next 2Y17.61%
EPS Next 3YN/A
5. Dividend
5.1 Amount
PECO has a Yearly Dividend Yield of 3.40%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 19.09, PECO is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.33, PECO pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.4% |
5.2 History
The dividend of PECO decreases each year by -3.54%.
PECO has been paying a dividend for over 5 years, so it has already some track record.
PECO has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)-3.54%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
213.80% of the earnings are spent on dividend by PECO. This is not a sustainable payout ratio.
DP213.8%
EPS Next 2Y17.61%
EPS Next 3YN/A
35.95
-0.2 (-0.55%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryDiversified REITs
Earnings (Last)
Earnings (Next)
Inst Owners85.72%
Inst Owner Change2.71%
Ins Owners0.54%
Ins Owner Change0.69%
Market Cap4.50B
Analysts76.47
Price Target40.8 (13.49%)
Short Float %3.04%
Short Ratio6.16
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.4% |
Yearly Dividend1.08
Dividend Growth(5Y)-3.54%
DP213.8%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-7.67%
Min EPS beat(2)-36.21%
Max EPS beat(2)20.87%
EPS beat(4)2
Avg EPS beat(4)-6.22%
Min EPS beat(4)-36.21%
Max EPS beat(4)20.87%
EPS beat(8)6
Avg EPS beat(8)3.77%
EPS beat(12)10
Avg EPS beat(12)10.96%
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)1
Avg Revenue beat(2)0.27%
Min Revenue beat(2)-0.4%
Max Revenue beat(2)0.95%
Revenue beat(4)2
Avg Revenue beat(4)-0.38%
Min Revenue beat(4)-2.27%
Max Revenue beat(4)0.95%
Revenue beat(8)4
Avg Revenue beat(8)-0.1%
Revenue beat(12)8
Avg Revenue beat(12)0.54%
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)-1.64%
PT rev (3m)-0.25%
EPS NQ rev (1m)9.79%
EPS NQ rev (3m)2.47%
EPS NY rev (1m)-0.17%
EPS NY rev (3m)2.31%
Revenue NQ rev (1m)-0.32%
Revenue NQ rev (3m)0.19%
Revenue NY rev (1m)0.16%
Revenue NY rev (3m)1.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 71.9 | ||
| Fwd PE | 61.3 | ||
| P/S | 6.8 | ||
| P/FCF | 18.78 | ||
| P/OCF | 13.45 | ||
| P/B | 1.94 | ||
| P/tB | 1.96 | ||
| EV/EBITDA | 15.55 |
EPS(TTM)0.5
EY1.39%
EPS(NY)0.59
Fwd EY1.63%
FCF(TTM)1.91
FCFY5.32%
OCF(TTM)2.67
OCFY7.44%
SpS5.28
BVpS18.53
TBVpS18.3
PEG (NY)4.16
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.24% | ||
| ROE | 2.7% | ||
| ROCE | 3.52% | ||
| ROIC | 2.78% | ||
| ROICexc | 2.78% | ||
| ROICexgc | 2.82% | ||
| OM | 25.95% | ||
| PM (TTM) | 9.48% | ||
| GM | 71.22% | ||
| FCFM | 36.23% |
ROA(3y)1.14%
ROA(5y)0.77%
ROE(3y)2.44%
ROE(5y)1.66%
ROIC(3y)2.51%
ROIC(5y)2.07%
ROICexc(3y)2.52%
ROICexc(5y)2.08%
ROICexgc(3y)2.56%
ROICexgc(5y)2.12%
ROCE(3y)3.18%
ROCE(5y)2.62%
ROICexcg growth 3Y28.89%
ROICexcg growth 5Y10.24%
ROICexc growth 3Y28.89%
ROICexc growth 5Y10.67%
OM growth 3Y23.39%
OM growth 5Y7%
PM growth 3Y49.54%
PM growth 5YN/A
GM growth 3Y0.43%
GM growth 5Y0.35%
F-Score5
Asset Turnover0.13
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.91 | ||
| Debt/FCF | 8.8 | ||
| Debt/EBITDA | 4.97 | ||
| Cap/Depr | 37.59% | ||
| Cap/Sales | 14.38% | ||
| Interest Coverage | 2.29 | ||
| Cash Conversion | 78.82% | ||
| Profit Quality | 382.24% | ||
| Current Ratio | 0.11 | ||
| Quick Ratio | 0.11 | ||
| Altman-Z | 0.83 |
F-Score5
WACC7.07%
ROIC/WACC0.39
Cap/Depr(3y)40.7%
Cap/Depr(5y)36.89%
Cap/Sales(3y)16.05%
Cap/Sales(5y)15.02%
Profit Quality(3y)370.81%
Profit Quality(5y)1082.19%
High Growth Momentum
Growth
EPS 1Y (TTM)2.04%
EPS 3Y55.36%
EPS 5YN/A
EPS Q2Q%36.36%
EPS Next Y17.3%
EPS Next 2Y17.61%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)8.4%
Revenue growth 3Y7.47%
Revenue growth 5Y4.27%
Sales Q2Q%12.04%
Revenue Next Year8.25%
Revenue Next 2Y7.74%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y10.55%
EBIT growth 3Y32.61%
EBIT growth 5Y11.56%
EBIT Next Year168.12%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y22.43%
FCF growth 3Y8.44%
FCF growth 5Y12.26%
OCF growth 1Y15.03%
OCF growth 3Y8.38%
OCF growth 5Y8.09%