PINNACLE WEST CAPITAL (PNW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:PNW - US7234841010 - Common Stock
92.17 USD
-0.25 (-0.27%)
92.17 USD
0 (0%)
We assign a fundamental rating of 3 out of 10 to PNW. PNW was compared to 46 industry peers in the Electric Utilities industry. PNW has a bad profitability rating. Also its financial health evaluation is rather negative. While showing a medium growth rate, PNW is valued expensive at the moment. Finally PNW also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- PNW had positive earnings in the past year.
- In the past year PNW had a positive cash flow from operations.
- PNW had positive earnings in each of the past 5 years.
- In the past 5 years PNW always reported a positive cash flow from operatings.
1.2 Ratios
- With a Return On Assets value of 1.99%, PNW is not doing good in the industry: 82.61% of the companies in the same industry are doing better.
- PNW has a worse Return On Equity (8.29%) than 69.57% of its industry peers.
- PNW has a worse Return On Invested Capital (3.01%) than 73.91% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for PNW is in line with the industry average of 4.58%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.99% | ||
| ROE | 8.29% | ||
| ROIC | 3.01% |
ROA(3y)2.16%
ROA(5y)2.41%
ROE(3y)8.38%
ROE(5y)9.08%
ROIC(3y)3.05%
ROIC(5y)3.14%
1.3 Margins
- PNW's Profit Margin of 11.20% is on the low side compared to the rest of the industry. PNW is outperformed by 65.22% of its industry peers.
- PNW's Profit Margin has declined in the last couple of years.
- The Operating Margin of PNW (19.43%) is comparable to the rest of the industry.
- In the last couple of years the Operating Margin of PNW has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.43% | ||
| PM (TTM) | 11.2% | ||
| GM | N/A |
OM growth 3Y-2.29%
OM growth 5Y3.15%
PM growth 3Y-9.95%
PM growth 5Y-5.19%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), PNW is destroying value.
- The number of shares outstanding for PNW has been increased compared to 1 year ago.
- The number of shares outstanding for PNW has been increased compared to 5 years ago.
- PNW has a better debt/assets ratio than last year.
2.2 Solvency
- PNW has an Altman-Z score of 0.73. This is a bad value and indicates that PNW is not financially healthy and even has some risk of bankruptcy.
- PNW has a worse Altman-Z score (0.73) than 63.04% of its industry peers.
- A Debt/Equity ratio of 1.38 is on the high side and indicates that PNW has dependencies on debt financing.
- PNW has a Debt to Equity ratio (1.38) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.38 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.73 |
ROIC/WACC0.48
WACC6.27%
2.3 Liquidity
- PNW has a Current Ratio of 0.67. This is a bad value and indicates that PNW is not financially healthy enough and could expect problems in meeting its short term obligations.
- The Current ratio of PNW (0.67) is worse than 78.26% of its industry peers.
- PNW has a Quick Ratio of 0.67. This is a bad value and indicates that PNW is not financially healthy enough and could expect problems in meeting its short term obligations.
- PNW's Quick ratio of 0.49 is on the low side compared to the rest of the industry. PNW is outperformed by 78.26% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.67 | ||
| Quick Ratio | 0.49 |
3. Growth
3.1 Past
- The earnings per share for PNW have decreased by -7.77% in the last year.
- The Earnings Per Share has been growing slightly by 1.78% on average over the past years.
- The Revenue has been growing slightly by 5.70% in the past year.
- Measured over the past years, PNW shows a quite strong growth in Revenue. The Revenue has been growing by 8.10% on average per year.
EPS 1Y (TTM)-7.77%
EPS 3Y-1.55%
EPS 5Y1.78%
EPS Q2Q%0.59%
Revenue 1Y (TTM)5.7%
Revenue growth 3Y10.45%
Revenue growth 5Y8.1%
Sales Q2Q%2.94%
3.2 Future
- PNW is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.74% yearly.
- The Revenue is expected to grow by 5.16% on average over the next years.
EPS Next Y-5.92%
EPS Next 2Y-4.77%
EPS Next 3Y2.85%
EPS Next 5Y4.74%
Revenue Next Year5.97%
Revenue Next 2Y4.96%
Revenue Next 3Y5.71%
Revenue Next 5Y5.16%
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 decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 18.93, which indicates a rather expensive current valuation of PNW.
- The rest of the industry has a similar Price/Earnings ratio as PNW.
- PNW is valuated rather cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- With a Price/Forward Earnings ratio of 19.47, PNW is valued on the expensive side.
- Based on the Price/Forward Earnings ratio, PNW is valued a bit more expensive than 67.39% of the companies in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.98, PNW is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.93 | ||
| Fwd PE | 19.47 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PNW is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 10.36 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)10.65
EPS Next 2Y-4.77%
EPS Next 3Y2.85%
5. Dividend
5.1 Amount
- PNW has a Yearly Dividend Yield of 3.94%.
- PNW's Dividend Yield is rather good when compared to the industry average which is at 2.90. PNW pays more dividend than 82.61% of the companies in the same industry.
- PNW's Dividend Yield is rather good when compared to the S&P500 average which is at 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.94% |
5.2 History
- The dividend of PNW has a limited annual growth rate of 2.90%.
- PNW has paid a dividend for at least 10 years, which is a reliable track record.
- PNW has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)2.9%
Div Incr Years13
Div Non Decr Years31
5.3 Sustainability
- 69.92% of the earnings are spent on dividend by PNW. This is not a sustainable payout ratio.
- PNW's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP69.92%
EPS Next 2Y-4.77%
EPS Next 3Y2.85%
PINNACLE WEST CAPITAL / PNW FAQ
What is the fundamental rating for PNW stock?
ChartMill assigns a fundamental rating of 3 / 10 to PNW.
Can you provide the valuation status for PINNACLE WEST CAPITAL?
ChartMill assigns a valuation rating of 2 / 10 to PINNACLE WEST CAPITAL (PNW). This can be considered as Overvalued.
How profitable is PINNACLE WEST CAPITAL (PNW) stock?
PINNACLE WEST CAPITAL (PNW) has a profitability rating of 3 / 10.
Can you provide the financial health for PNW stock?
The financial health rating of PINNACLE WEST CAPITAL (PNW) is 1 / 10.
What is the expected EPS growth for PINNACLE WEST CAPITAL (PNW) stock?
The Earnings per Share (EPS) of PINNACLE WEST CAPITAL (PNW) is expected to decline by -5.92% in the next year.