PHILLIPS EDISON & COMPANY IN (PECO) Stock Fundamental Analysis
NASDAQ:PECO - Nasdaq - US71844V2016 - REIT - Currency: USD
Overall PECO gets a fundamental rating of 5 out of 10. We evaluated PECO against 130 industry peers in the Diversified REITs industry. While PECO belongs to the best of the industry regarding profitability, there are concerns on its financial health. PECO is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
PECO had positive earnings in the past year.
PECO had a positive operating cash flow in the past year.
PECO had positive earnings in each of the past 5 years.
Each year in the past 5 years PECO had a positive operating cash flow.
1.2 Ratios
PECO has a Return On Assets of 1.38%. This is in the better half of the industry: PECO outperforms 60.77% of its industry peers.
PECO has a Return On Equity of 3.09%. This is comparable to the rest of the industry: PECO outperforms 59.23% of its industry peers.
PECO has a Return On Invested Capital (2.79%) which is comparable to the rest of the industry.
PECO had an Average Return On Invested Capital over the past 3 years of 2.51%. This is in line with the industry average of 3.16%.
The last Return On Invested Capital (2.79%) for PECO is above the 3 year average (2.51%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.38% | ||
| ROE | 3.09% | ||
| ROIC | 2.79% |
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
With a decent Profit Margin value of 10.51%, PECO is doing good in the industry, outperforming 61.54% of the companies in the same industry.
PECO's Profit Margin has improved in the last couple of years.
PECO has a Operating Margin of 26.19%. This is comparable to the rest of the industry: PECO outperforms 56.92% of its industry peers.
In the last couple of years the Operating Margin of PECO has grown nicely.
PECO's Gross Margin of 71.12% is fine compared to the rest of the industry. PECO outperforms 63.85% of its industry peers.
In the last couple of years the Gross Margin of PECO has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.19% | ||
| PM (TTM) | 10.51% | ||
| GM | 71.12% |
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
PECO has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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.
The debt/assets ratio for PECO is higher compared to a year ago.
2.2 Solvency
PECO has an Altman-Z score of 0.78. This is a bad value and indicates that PECO is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.78, PECO is in the better half of the industry, outperforming 66.15% of the companies in the same industry.
The Debt to FCF ratio of PECO is 10.19, which is on the high side as it means it would take PECO, 10.19 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 10.19, PECO belongs to the top of the industry, outperforming 91.54% of the companies in the same industry.
A Debt/Equity ratio of 0.99 indicates that PECO is somewhat dependend on debt financing.
PECO has a Debt to Equity ratio (0.99) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.99 | ||
| Debt/FCF | 10.19 | ||
| Altman-Z | 0.78 |
ROIC/WACC0.34
WACC8.17%
2.3 Liquidity
PECO has a Current Ratio of 0.15. This is a bad value and indicates that PECO is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of PECO (0.15) is worse than 92.31% of its industry peers.
PECO has a Quick Ratio of 0.15. This is a bad value and indicates that PECO is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of PECO (0.15) is worse than 91.54% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.15 | ||
| Quick Ratio | 0.15 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 16.33% over the past year.
The Earnings Per Share has been growing by 55.36% on average over the past years. This is a very strong growth
PECO shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.36%.
PECO shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.27% yearly.
EPS 1Y (TTM)16.33%
EPS 3Y55.36%
EPS 5YN/A
EPS Q2Q%50%
Revenue 1Y (TTM)9.36%
Revenue growth 3Y7.47%
Revenue growth 5Y4.27%
Sales Q2Q%10.54%
3.2 Future
Based on estimates for the next years, PECO will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.74% on average per year.
Based on estimates for the next years, PECO will show a quite strong growth in Revenue. The Revenue will grow by 8.10% on average per year.
EPS Next Y22.4%
EPS Next 2Y14.71%
EPS Next 3Y15.74%
EPS Next 5YN/A
Revenue Next Year9.62%
Revenue Next 2Y8.08%
Revenue Next 3Y8.1%
Revenue Next 5YN/A
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past 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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 61.77 indicates a quite expensive valuation of PECO.
Compared to the rest of the industry, the Price/Earnings ratio of PECO is on the same level as its industry peers.
PECO's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.45.
A Price/Forward Earnings ratio of 53.52 indicates a quite expensive valuation of PECO.
The rest of the industry has a similar Price/Forward Earnings ratio as PECO.
PECO is valuated expensively when we compare the Price/Forward Earnings ratio to 21.90, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 61.77 | ||
| Fwd PE | 53.52 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PECO is on the same level as its industry peers.
Based on the Price/Free Cash Flow ratio, PECO is valued a bit cheaper than 78.46% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.75 | ||
| EV/EBITDA | 15.31 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of PECO may justify a higher PE ratio.
A more expensive valuation may be justified as PECO's earnings are expected to grow with 15.74% in the coming years.
PEG (NY)2.76
PEG (5Y)N/A
EPS Next 2Y14.71%
EPS Next 3Y15.74%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.51%, PECO has a reasonable but not impressive dividend return.
PECO's Dividend Yield is slightly below the industry average, which is at 6.64.
Compared to an average S&P500 Dividend Yield of 2.42, PECO pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.51% |
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
209.73% of the earnings are spent on dividend by PECO. This is not a sustainable payout ratio.
DP209.73%
EPS Next 2Y14.71%
EPS Next 3Y15.74%
35.21
+0.14 (+0.4%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryDiversified REITs
Earnings (Last)
Earnings (Next)
Inst Owners86.06%
Inst Owner Change2.15%
Ins Owners0.53%
Ins Owner Change4.52%
Market Cap4.42B
Analysts76.47
Price Target40.46 (14.91%)
Short Float %3.17%
Short Ratio4.7
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.51% |
Yearly Dividend1.08
Dividend Growth(5Y)-3.54%
DP209.73%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)30.62%
Min EPS beat(2)20.87%
Max EPS beat(2)40.37%
EPS beat(4)2
Avg EPS beat(4)3.04%
Min EPS beat(4)-36.21%
Max EPS beat(4)40.37%
EPS beat(8)6
Avg EPS beat(8)5.86%
EPS beat(12)10
Avg EPS beat(12)12.99%
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)2
Avg Revenue beat(2)1.78%
Min Revenue beat(2)0.95%
Max Revenue beat(2)2.6%
Revenue beat(4)2
Avg Revenue beat(4)0.22%
Min Revenue beat(4)-2.27%
Max Revenue beat(4)2.6%
Revenue beat(8)4
Avg Revenue beat(8)0.04%
Revenue beat(12)8
Avg Revenue beat(12)0.63%
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0%
PT rev (3m)-0.83%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.72%
EPS NY rev (1m)0%
EPS NY rev (3m)4.05%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.45%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 61.77 | ||
| Fwd PE | 53.52 | ||
| P/S | 6.51 | ||
| P/FCF | 19.75 | ||
| P/OCF | 13.29 | ||
| P/B | 1.91 | ||
| P/tB | 1.94 | ||
| EV/EBITDA | 15.31 |
EPS(TTM)0.57
EY1.62%
EPS(NY)0.66
Fwd EY1.87%
FCF(TTM)1.78
FCFY5.06%
OCF(TTM)2.65
OCFY7.52%
SpS5.41
BVpS18.43
TBVpS18.15
PEG (NY)2.76
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.38% | ||
| ROE | 3.09% | ||
| ROCE | 3.53% | ||
| ROIC | 2.79% | ||
| ROICexc | 2.79% | ||
| ROICexgc | 2.83% | ||
| OM | 26.19% | ||
| PM (TTM) | 10.51% | ||
| GM | 71.12% | ||
| FCFM | 32.96% |
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 | 0.99 | ||
| Debt/FCF | 10.19 | ||
| Debt/EBITDA | 5.23 | ||
| Cap/Depr | 42.05% | ||
| Cap/Sales | 16% | ||
| Interest Coverage | 2.03 | ||
| Cash Conversion | 76.22% | ||
| Profit Quality | 313.47% | ||
| Current Ratio | 0.15 | ||
| Quick Ratio | 0.15 | ||
| Altman-Z | 0.78 |
F-Score5
WACC8.17%
ROIC/WACC0.34
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)16.33%
EPS 3Y55.36%
EPS 5YN/A
EPS Q2Q%50%
EPS Next Y22.4%
EPS Next 2Y14.71%
EPS Next 3Y15.74%
EPS Next 5YN/A
Revenue 1Y (TTM)9.36%
Revenue growth 3Y7.47%
Revenue growth 5Y4.27%
Sales Q2Q%10.54%
Revenue Next Year9.62%
Revenue Next 2Y8.08%
Revenue Next 3Y8.1%
Revenue Next 5YN/A
EBIT growth 1Y10.38%
EBIT growth 3Y32.61%
EBIT growth 5Y11.56%
EBIT Next Year172.21%
EBIT Next 3Y46.43%
EBIT Next 5YN/A
FCF growth 1Y21.71%
FCF growth 3Y8.44%
FCF growth 5Y12.26%
OCF growth 1Y13.16%
OCF growth 3Y8.38%
OCF growth 5Y8.09%