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PINNACLE WEST CAPITAL (PNW) Stock Fundamental Analysis

NYSE:PNW - New York Stock Exchange, Inc. - US7234841010 - Common Stock - Currency: USD

91.58  +0.81 (+0.89%)

After market: 91.58 0 (0%)

Fundamental Rating

3

Taking everything into account, PNW scores 3 out of 10 in our fundamental rating. PNW was compared to 47 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. PNW also has an excellent dividend rating.


Dividend Valuation Growth Profitability Health

3

1. Profitability

1.1 Basic Checks

In the past year PNW was profitable.
PNW had a positive operating cash flow in the past year.
PNW had positive earnings in each of the past 5 years.
PNW had a positive operating cash flow in each of the past 5 years.
PNW Yearly Net Income VS EBIT VS OCF VS FCFPNW Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 500M -500M 1B

1.2 Ratios

PNW has a worse Return On Assets (2.34%) than 63.16% of its industry peers.
With a Return On Equity value of 9.30%, PNW perfoms like the industry average, outperforming 52.63% of the companies in the same industry.
The Return On Invested Capital of PNW (3.41%) is worse than 68.42% of its industry peers.
PNW had an Average Return On Invested Capital over the past 3 years of 2.97%. This is in line with the industry average of 4.62%.
The last Return On Invested Capital (3.41%) for PNW is above the 3 year average (2.97%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 2.34%
ROE 9.3%
ROIC 3.41%
ROA(3y)2.32%
ROA(5y)2.53%
ROE(3y)8.86%
ROE(5y)9.25%
ROIC(3y)2.97%
ROIC(5y)3.04%
PNW Yearly ROA, ROE, ROICPNW Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2 4 6 8 10

1.3 Margins

The Profit Margin of PNW (12.26%) is comparable to the rest of the industry.
PNW's Profit Margin has declined in the last couple of years.
PNW has a Operating Margin of 19.95%. This is in the lower half of the industry: PNW underperforms 60.53% of its industry peers.
PNW's Operating Margin has declined in the last couple of years.
Industry RankSector Rank
OM 19.95%
PM (TTM) 12.26%
GM N/A
OM growth 3Y-7.2%
OM growth 5Y-3.15%
PM growth 3Y-11.39%
PM growth 5Y-5.06%
GM growth 3YN/A
GM growth 5YN/A
PNW Yearly Profit, Operating, Gross MarginsPNW Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 5 10 15 20 25

1

2. Health

2.1 Basic Checks

PNW has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
PNW has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, PNW has more shares outstanding
The debt/assets ratio for PNW is higher compared to a year ago.
PNW Yearly Shares OutstandingPNW Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 20M 40M 60M 80M 100M
PNW Yearly Total Debt VS Total AssetsPNW Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 5B 10B 15B 20B

2.2 Solvency

Based on the Altman-Z score of 0.80, we must say that PNW is in the distress zone and has some risk of bankruptcy.
PNW has a Altman-Z score (0.80) which is in line with its industry peers.
A Debt/Equity ratio of 1.31 is on the high side and indicates that PNW has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.31, PNW is in the better half of the industry, outperforming 63.16% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 1.31
Debt/FCF N/A
Altman-Z 0.8
ROIC/WACC0.54
WACC6.29%
PNW Yearly LT Debt VS Equity VS FCFPNW Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 2B 4B 6B

2.3 Liquidity

PNW has a Current Ratio of 0.71. 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 has a worse Current ratio (0.71) than 60.53% of its industry peers.
A Quick Ratio of 0.54 indicates that PNW may have some problems paying its short term obligations.
PNW has a Quick ratio (0.54) which is in line with its industry peers.
Industry RankSector Rank
Current Ratio 0.71
Quick Ratio 0.54
PNW Yearly Current Assets VS Current LiabilitesPNW Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B 2.5B

5

3. Growth

3.1 Past

PNW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 25.71%, which is quite impressive.
The Earnings Per Share has been decreasing by -0.58% on average over the past years.
Looking at the last year, PNW shows a small growth in Revenue. The Revenue has grown by 6.52% in the last year.
PNW shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.93% yearly.
EPS 1Y (TTM)25.71%
EPS 3Y-3.32%
EPS 5Y-0.58%
EPS Q2Q%-3.71%
Revenue 1Y (TTM)6.52%
Revenue growth 3Y9.4%
Revenue growth 5Y4.93%
Sales Q2Q%8%

3.2 Future

Based on estimates for the next years, PNW will show a small growth in Earnings Per Share. The EPS will grow by 6.42% on average per year.
PNW is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.96% yearly.
EPS Next Y17.44%
EPS Next 2Y2.36%
EPS Next 3Y5.82%
EPS Next 5Y6.42%
Revenue Next Year10.73%
Revenue Next 2Y6.07%
Revenue Next 3Y5.95%
Revenue Next 5Y5.96%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better 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 accelerating.
PNW Yearly Revenue VS EstimatesPNW Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2B 4B 6B
PNW Yearly EPS VS EstimatesPNW Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2 4 6

2

4. Valuation

4.1 Price/Earnings Ratio

PNW is valuated rather expensively with a Price/Earnings ratio of 17.34.
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 29.62, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 19.82 indicates a rather expensive valuation of PNW.
71.05% of the companies in the same industry are cheaper than PNW, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.70, PNW is valued at the same level.
Industry RankSector Rank
PE 17.34
Fwd PE 19.82
PNW Price Earnings VS Forward Price EarningsPNW Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

PNW's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. PNW is cheaper than 73.68% of the companies in the same industry.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 10.05
PNW Per share dataPNW EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 20 40

4.3 Compensation for Growth

PNW's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
PEG (NY)0.99
PEG (5Y)N/A
EPS Next 2Y2.36%
EPS Next 3Y5.82%

7

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 3.94%, PNW has a reasonable but not impressive dividend return.
PNW's Dividend Yield is a higher than the industry average which is at 3.50.
Compared to an average S&P500 Dividend Yield of 2.27, PNW pays a better dividend.
Industry RankSector Rank
Dividend Yield 3.94%

5.2 History

The dividend of PNW has a limited annual growth rate of 4.34%.
PNW has paid a dividend for at least 10 years, which is a reliable track record.
PNW has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)4.34%
Div Incr Years13
Div Non Decr Years31
PNW Yearly Dividends per sharePNW Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1 2 3

5.3 Sustainability

PNW pays out 63.78% of its income as dividend. This is not a sustainable payout ratio.
The dividend of PNW is growing, but earnings are growing more, so the dividend growth is sustainable.
DP63.78%
EPS Next 2Y2.36%
EPS Next 3Y5.82%
PNW Yearly Income VS Free CF VS DividendPNW Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 200M -200M 400M -400M 600M -600M
PNW Dividend Payout.PNW Dividend Payout, showing the Payout Ratio.PNW Dividend Payout.PayoutRetained Earnings

PINNACLE WEST CAPITAL

NYSE:PNW (2/21/2025, 8:04:00 PM)

After market: 91.58 0 (0%)

91.58

+0.81 (+0.89%)

Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)11-06 2024-11-06/bmo
Earnings (Next)02-25 2025-02-25/bmo
Inst Owners101.91%
Inst Owner Change-90.76%
Ins Owners0.09%
Ins Owner Change1.69%
Market Cap10.41B
Analysts77.14
Price Target95.54 (4.32%)
Short Float %3.12%
Short Ratio3.47
Dividend
Industry RankSector Rank
Dividend Yield 3.94%
Yearly Dividend3.41
Dividend Growth(5Y)4.34%
DP63.78%
Div Incr Years13
Div Non Decr Years31
Ex-Date02-03 2025-02-03 (0.895)
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)17.41%
Min EPS beat(2)-4.36%
Max EPS beat(2)39.18%
EPS beat(4)3
Avg EPS beat(4)506.04%
Min EPS beat(4)-4.36%
Max EPS beat(4)1889.34%
EPS beat(8)4
Avg EPS beat(8)225.86%
EPS beat(12)8
Avg EPS beat(12)190.98%
EPS beat(16)11
Avg EPS beat(16)115.06%
Revenue beat(2)1
Avg Revenue beat(2)0.37%
Min Revenue beat(2)-6.56%
Max Revenue beat(2)7.29%
Revenue beat(4)1
Avg Revenue beat(4)-3.83%
Min Revenue beat(4)-12.02%
Max Revenue beat(4)7.29%
Revenue beat(8)5
Avg Revenue beat(8)8.12%
Revenue beat(12)9
Avg Revenue beat(12)9.62%
Revenue beat(16)12
Avg Revenue beat(16)7.74%
PT rev (1m)-1.26%
PT rev (3m)1.13%
EPS NQ rev (1m)24.4%
EPS NQ rev (3m)41.23%
EPS NY rev (1m)1.57%
EPS NY rev (3m)4.07%
Revenue NQ rev (1m)19.5%
Revenue NQ rev (3m)19.5%
Revenue NY rev (1m)1.24%
Revenue NY rev (3m)3%
Valuation
Industry RankSector Rank
PE 17.34
Fwd PE 19.82
P/S 2.07
P/FCF N/A
P/OCF 6.74
P/B 1.57
P/tB 1.73
EV/EBITDA 10.05
EPS(TTM)5.28
EY5.77%
EPS(NY)4.62
Fwd EY5.05%
FCF(TTM)-6.2
FCFYN/A
OCF(TTM)13.58
OCFY14.83%
SpS44.16
BVpS58.19
TBVpS53.03
PEG (NY)0.99
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 2.34%
ROE 9.3%
ROCE 4.33%
ROIC 3.41%
ROICexc 3.42%
ROICexgc 3.51%
OM 19.95%
PM (TTM) 12.26%
GM N/A
FCFM N/A
ROA(3y)2.32%
ROA(5y)2.53%
ROE(3y)8.86%
ROE(5y)9.25%
ROIC(3y)2.97%
ROIC(5y)3.04%
ROICexc(3y)2.98%
ROICexc(5y)3.04%
ROICexgc(3y)3.01%
ROICexgc(5y)3.08%
ROCE(3y)3.75%
ROCE(5y)3.81%
ROICexcg growth 3Y-4.36%
ROICexcg growth 5Y-4.95%
ROICexc growth 3Y-4.26%
ROICexc growth 5Y-4.87%
OM growth 3Y-7.2%
OM growth 5Y-3.15%
PM growth 3Y-11.39%
PM growth 5Y-5.06%
GM growth 3YN/A
GM growth 5YN/A
F-Score7
Asset Turnover0.19
Health
Industry RankSector Rank
Debt/Equity 1.31
Debt/FCF N/A
Debt/EBITDA 4.49
Cap/Depr 242%
Cap/Sales 44.8%
Interest Coverage 2.83
Cash Conversion 79.95%
Profit Quality N/A
Current Ratio 0.71
Quick Ratio 0.54
Altman-Z 0.8
F-Score7
WACC6.29%
ROIC/WACC0.54
Cap/Depr(3y)209.95%
Cap/Depr(5y)200.51%
Cap/Sales(3y)39.18%
Cap/Sales(5y)37.77%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)25.71%
EPS 3Y-3.32%
EPS 5Y-0.58%
EPS Q2Q%-3.71%
EPS Next Y17.44%
EPS Next 2Y2.36%
EPS Next 3Y5.82%
EPS Next 5Y6.42%
Revenue 1Y (TTM)6.52%
Revenue growth 3Y9.4%
Revenue growth 5Y4.93%
Sales Q2Q%8%
Revenue Next Year10.73%
Revenue Next 2Y6.07%
Revenue Next 3Y5.95%
Revenue Next 5Y5.96%
EBIT growth 1Y27.31%
EBIT growth 3Y1.52%
EBIT growth 5Y1.63%
EBIT Next Year132.5%
EBIT Next 3Y39.27%
EBIT Next 5Y26.87%
FCF growth 1Y-37.62%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y25.39%
OCF growth 3Y7.71%
OCF growth 5Y-1.11%