PEARSON PLC (PES.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:PES - GB0006776081 - Common Stock
12.225 EUR
+0.18 (+1.49%)
PES gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 5 industry peers in the Diversified Consumer Services industry. PES scores excellent points on both the profitability and health parts. This is a solid base for a good stock. PES has a valuation in line with the averages, but on the other hand it scores bad on growth. PES also has an excellent dividend rating. This makes PES very considerable for dividend investing!
1. Profitability
1.1 Basic Checks
In the past year PES was profitable.
In the past year PES had a positive cash flow from operations.
In the past 5 years PES has always been profitable.
In the past 5 years PES always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 7.08%, PES belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
The Return On Equity of PES (12.29%) is better than 100.00% of its industry peers.
The Return On Invested Capital of PES (8.65%) is better than 100.00% of its industry peers.
PES had an Average Return On Invested Capital over the past 3 years of 6.70%. This is in line with the industry average of 8.65%.
The 3 year average ROIC (6.70%) for PES is below the current ROIC(8.65%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.08% | ||
| ROE | 12.29% | ||
| ROIC | 8.65% |
ROA(3y)5.07%
ROA(5y)4.41%
ROE(3y)8.59%
ROE(5y)7.58%
ROIC(3y)6.7%
ROIC(5y)5.84%
1.3 Margins
PES has a better Profit Margin (12.53%) than 100.00% of its industry peers.
PES's Profit Margin has improved in the last couple of years.
PES has a better Operating Margin (15.77%) than 100.00% of its industry peers.
In the last couple of years the Operating Margin of PES has grown nicely.
PES has a better Gross Margin (51.45%) than 80.00% of its industry peers.
In the last couple of years the Gross Margin of PES has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.77% | ||
| PM (TTM) | 12.53% | ||
| GM | 51.45% |
OM growth 3Y25.2%
OM growth 5Y6.89%
PM growth 3Y33.26%
PM growth 5Y12.36%
GM growth 3Y1.31%
GM growth 5Y-0.38%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so PES is destroying value.
The number of shares outstanding for PES has been reduced compared to 1 year ago.
The number of shares outstanding for PES has been reduced compared to 5 years ago.
Compared to 1 year ago, PES has a worse debt to assets ratio.
2.2 Solvency
PES has an Altman-Z score of 2.81. This is not the best score and indicates that PES is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of PES (2.81) is better than 100.00% of its industry peers.
The Debt to FCF ratio of PES is 2.42, which is a good value as it means it would take PES, 2.42 years of fcf income to pay off all of its debts.
PES has a Debt to FCF ratio of 2.42. This is amongst the best in the industry. PES outperforms 100.00% of its industry peers.
PES has a Debt/Equity ratio of 0.40. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of PES (0.40) is better than 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 2.42 | ||
| Altman-Z | 2.81 |
ROIC/WACC0.84
WACC10.26%
2.3 Liquidity
A Current Ratio of 2.31 indicates that PES has no problem at all paying its short term obligations.
PES has a better Current ratio (2.31) than 100.00% of its industry peers.
PES has a Quick Ratio of 2.24. This indicates that PES is financially healthy and has no problem in meeting its short term obligations.
The Quick ratio of PES (2.24) is better than 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.31 | ||
| Quick Ratio | 2.24 |
3. Growth
3.1 Past
PES shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.29%.
The Earnings Per Share has been growing slightly by 1.15% on average over the past years.
Looking at the last year, PES shows a decrease in Revenue. The Revenue has decreased by -0.82% in the last year.
PES shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.70% yearly.
EPS 1Y (TTM)3.29%
EPS 3Y20.87%
EPS 5Y1.15%
EPS Q2Q%-5.47%
Revenue 1Y (TTM)-0.82%
Revenue growth 3Y1.19%
Revenue growth 5Y-1.7%
Sales Q2Q%-1.82%
3.2 Future
PES is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.15% yearly.
PES is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.66% yearly.
EPS Next Y2.77%
EPS Next 2Y7.05%
EPS Next 3Y8.32%
EPS Next 5Y7.15%
Revenue Next Year-0.14%
Revenue Next 2Y2.5%
Revenue Next 3Y3.12%
Revenue Next 5Y2.66%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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 17.72, PES is valued on the expensive side.
PES's Price/Earnings ratio is rather cheap when compared to the industry. PES is cheaper than 100.00% of the companies in the same industry.
PES is valuated rather cheaply when we compare the Price/Earnings ratio to 27.25, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 15.15, PES is valued correctly.
PES's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. PES is cheaper than 80.00% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.98. PES is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.72 | ||
| Fwd PE | 15.15 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, PES is valued cheaper than 100.00% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PES indicates a rather cheap valuation: PES is cheaper than 100.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.95 | ||
| EV/EBITDA | 10.19 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PES has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)6.39
PEG (5Y)15.38
EPS Next 2Y7.05%
EPS Next 3Y8.32%
5. Dividend
5.1 Amount
PES has a Yearly Dividend Yield of 2.31%.
PES's Dividend Yield is rather good when compared to the industry average which is at 0.46. PES pays more dividend than 100.00% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 1.92, PES pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.31% |
5.2 History
The dividend of PES has a limited annual growth rate of 4.00%.
Dividend Growth(5Y)4%
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
PES pays out 36.05% of its income as dividend. This is a sustainable payout ratio.
PES's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP36.05%
EPS Next 2Y7.05%
EPS Next 3Y8.32%
FRA:PES (1/7/2026, 7:00:00 PM)
12.225
+0.18 (+1.49%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners79.26%
Inst Owner ChangeN/A
Ins Owners0.2%
Ins Owner ChangeN/A
Market Cap7.78B
Revenue(TTM)3.52B
Net Income(TTM)441.00M
Analysts68.57
Price Target14.65 (19.84%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.31% |
Yearly Dividend0.26
Dividend Growth(5Y)4%
DP36.05%
Div Incr Years4
Div Non Decr Years4
Ex-DateN/A
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)N/A
Avg Revenue beat(2)N/A
Min Revenue beat(2)N/A
Max Revenue beat(2)N/A
Revenue beat(4)N/A
Avg Revenue beat(4)N/A
Min Revenue beat(4)N/A
Max Revenue beat(4)N/A
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0%
PT rev (3m)1.23%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)-0.08%
EPS NY rev (3m)-0.88%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)0.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.72 | ||
| Fwd PE | 15.15 | ||
| P/S | 1.92 | ||
| P/FCF | 10.95 | ||
| P/OCF | 9.07 | ||
| P/B | 1.88 | ||
| P/tB | 8.65 | ||
| EV/EBITDA | 10.19 |
EPS(TTM)0.69
EY5.64%
EPS(NY)0.81
Fwd EY6.6%
FCF(TTM)1.12
FCFY9.13%
OCF(TTM)1.35
OCFY11.03%
SpS6.38
BVpS6.5
TBVpS1.41
PEG (NY)6.39
PEG (5Y)15.38
Graham Number10.05
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.08% | ||
| ROE | 12.29% | ||
| ROCE | 10.65% | ||
| ROIC | 8.65% | ||
| ROICexc | 9.26% | ||
| ROICexgc | 21.92% | ||
| OM | 15.77% | ||
| PM (TTM) | 12.53% | ||
| GM | 51.45% | ||
| FCFM | 17.5% |
ROA(3y)5.07%
ROA(5y)4.41%
ROE(3y)8.59%
ROE(5y)7.58%
ROIC(3y)6.7%
ROIC(5y)5.84%
ROICexc(3y)7.48%
ROICexc(5y)7.31%
ROICexgc(3y)20.27%
ROICexgc(5y)22.68%
ROCE(3y)8.26%
ROCE(5y)7.2%
ROICexgc growth 3Y7.27%
ROICexgc growth 5Y10.63%
ROICexc growth 3Y17.53%
ROICexc growth 5Y6.81%
OM growth 3Y25.2%
OM growth 5Y6.89%
PM growth 3Y33.26%
PM growth 5Y12.36%
GM growth 3Y1.31%
GM growth 5Y-0.38%
F-Score8
Asset Turnover0.57
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 2.42 | ||
| Debt/EBITDA | 1.84 | ||
| Cap/Depr | 58.45% | ||
| Cap/Sales | 3.64% | ||
| Interest Coverage | 10.09 | ||
| Cash Conversion | 96.12% | ||
| Profit Quality | 139.68% | ||
| Current Ratio | 2.31 | ||
| Quick Ratio | 2.24 | ||
| Altman-Z | 2.81 |
F-Score8
WACC10.26%
ROIC/WACC0.84
Cap/Depr(3y)49.36%
Cap/Depr(5y)46.7%
Cap/Sales(3y)3.58%
Cap/Sales(5y)3.97%
Profit Quality(3y)103.3%
Profit Quality(5y)94.38%
High Growth Momentum
Growth
EPS 1Y (TTM)3.29%
EPS 3Y20.87%
EPS 5Y1.15%
EPS Q2Q%-5.47%
EPS Next Y2.77%
EPS Next 2Y7.05%
EPS Next 3Y8.32%
EPS Next 5Y7.15%
Revenue 1Y (TTM)-0.82%
Revenue growth 3Y1.19%
Revenue growth 5Y-1.7%
Sales Q2Q%-1.82%
Revenue Next Year-0.14%
Revenue Next 2Y2.5%
Revenue Next 3Y3.12%
Revenue Next 5Y2.66%
EBIT growth 1Y9.47%
EBIT growth 3Y26.69%
EBIT growth 5Y5.08%
EBIT Next Year39.42%
EBIT Next 3Y15.89%
EBIT Next 5Y14.3%
FCF growth 1Y133.33%
FCF growth 3Y49.68%
FCF growth 5Y23.37%
OCF growth 1Y82.8%
OCF growth 3Y24.36%
OCF growth 5Y11.19%
PEARSON PLC / PES.DE FAQ
What is the ChartMill fundamental rating of PEARSON PLC (PES.DE) stock?
ChartMill assigns a fundamental rating of 7 / 10 to PES.DE.
Can you provide the valuation status for PEARSON PLC?
ChartMill assigns a valuation rating of 6 / 10 to PEARSON PLC (PES.DE). This can be considered as Fairly Valued.
Can you provide the profitability details for PEARSON PLC?
PEARSON PLC (PES.DE) has a profitability rating of 9 / 10.
What is the expected EPS growth for PEARSON PLC (PES.DE) stock?
The Earnings per Share (EPS) of PEARSON PLC (PES.DE) is expected to grow by 2.77% in the next year.
How sustainable is the dividend of PEARSON PLC (PES.DE) stock?
The dividend rating of PEARSON PLC (PES.DE) is 7 / 10 and the dividend payout ratio is 36.05%.