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. Both the profitability and financial health of PNW have multiple concerns. PNW is valied quite expensively at the moment, while it does show a decent growth rate. 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.
- In the past 5 years PNW has always been profitable.
- 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 Return On Equity of 8.29%. This is in the lower half of the industry: PNW underperforms 69.57% of its industry peers.
- PNW has a Return On Invested Capital of 3.01%. This is in the lower half of the industry: PNW underperforms 73.91% of its industry peers.
- PNW had an Average Return On Invested Capital over the past 3 years of 3.05%. This 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.
- In the last couple of years the Profit Margin of PNW has declined.
- PNW's Operating Margin of 19.43% is in line compared to the rest of the industry. PNW outperforms 43.48% of its industry peers.
- PNW's Operating Margin has improved in the last couple of years.
| 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.
- Compared to 5 years ago, PNW has more shares outstanding
- The debt/assets ratio for PNW has been reduced compared to a year ago.
2.2 Solvency
- Based on the Altman-Z score of 0.73, we must say that PNW is in the distress zone and has some risk of bankruptcy.
- The Altman-Z score of PNW (0.73) is worse than 63.04% of its industry peers.
- PNW has a Debt/Equity ratio of 1.38. This is a high value indicating a heavy dependency on external financing.
- PNW has a Debt to Equity ratio of 1.38. This is comparable to the rest of the industry: PNW outperforms 58.70% of 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.
- PNW has a Current ratio of 0.67. This is in the lower half of the industry: PNW underperforms 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.
- With a Quick ratio value of 0.49, PNW is not doing good in the industry: 78.26% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.67 | ||
| Quick Ratio | 0.49 |
3. Growth
3.1 Past
- PNW shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -7.77%.
- 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
- Based on estimates for the next years, PNW will show a small growth in Earnings Per Share. The EPS will grow by 4.74% on average per year.
- 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
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- 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
- With a Price/Earnings ratio of 18.93, PNW is valued on the expensive side.
- PNW's Price/Earnings is on the same level as the industry average.
- When comparing the Price/Earnings ratio of PNW to the average of the S&P500 Index (27.21), we can say PNW is valued slightly cheaper.
- The Price/Forward Earnings ratio is 19.47, which indicates a rather expensive current valuation of PNW.
- 67.39% of the companies in the same industry are cheaper than PNW, based on the Price/Forward Earnings ratio.
- When comparing the Price/Forward Earnings ratio of PNW to the average of the S&P500 Index (25.98), we can say PNW is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.93 | ||
| Fwd PE | 19.47 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as PNW.
| 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%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 2.90, PNW pays a better dividend. On top of this PNW pays more dividend than 82.61% of the companies listed 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 been paying a dividend for at least 10 years, so it has 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.