PINNACLE WEST CAPITAL (PNW) Stock Fundamental Analysis
NYSE:PNW - New York Stock Exchange, Inc. - US7234841010 - Common Stock - Currency: USD
We assign a fundamental rating of 3 out of 10 to PNW. 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. PNW is quite expensive at the moment. It does show a decent growth rate. Finally PNW also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
PNW had positive earnings in the past year.
PNW had a positive operating cash flow in the past year.
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 2.16%, PNW is not doing good in the industry: 78.72% of the companies in the same industry are doing better.
The Return On Equity of PNW (8.72%) is worse than 63.83% of its industry peers.
Looking at the Return On Invested Capital, with a value of 3.24%, PNW is doing worse than 82.98% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for PNW is significantly below the industry average of 38.54%.
The 3 year average ROIC (3.05%) for PNW is below the current ROIC(3.24%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.16% | ||
| ROE | 8.72% | ||
| ROIC | 3.24% |
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 has a worse Profit Margin (11.28%) than 63.83% of its industry peers.
PNW's Profit Margin has declined in the last couple of years.
The Operating Margin of PNW (19.26%) 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 | 19.26% | ||
| PM (TTM) | 11.28% | ||
| 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
PNW has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for PNW has been increased compared to 1 year ago.
PNW has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, PNW has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.74, we must say that PNW is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.74, PNW is doing worse than 61.70% of the companies in the same industry.
PNW has a Debt/Equity ratio of 1.33. This is a high value indicating a heavy dependency on external financing.
PNW has a Debt to Equity ratio of 1.33. This is comparable to the rest of the industry: PNW outperforms 53.19% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.33 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.74 |
ROIC/WACC0.51
WACC6.31%
2.3 Liquidity
A Current Ratio of 0.50 indicates that PNW may have some problems paying its short term obligations.
PNW has a worse Current ratio (0.50) than 85.11% of its industry peers.
PNW has a Quick Ratio of 0.50. 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 Quick ratio (0.34) than 82.98% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.5 | ||
| Quick Ratio | 0.34 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 9.59% over the past year.
Measured over the past 5 years, PNW shows a small growth in Earnings Per Share. The EPS has been growing by 1.78% on average per year.
PNW shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.69%.
The Revenue has been growing by 8.10% on average over the past years. This is quite good.
EPS 1Y (TTM)9.59%
EPS 3Y-1.55%
EPS 5Y1.78%
EPS Q2Q%-126.67%
Revenue 1Y (TTM)10.69%
Revenue growth 3Y10.45%
Revenue growth 5Y8.1%
Sales Q2Q%8.47%
3.2 Future
PNW is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.30% yearly.
PNW is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.08% yearly.
EPS Next Y-12.12%
EPS Next 2Y-1.03%
EPS Next 3Y3.15%
EPS Next 5Y4.3%
Revenue Next Year3.39%
Revenue Next 2Y4.66%
Revenue Next 3Y4.98%
Revenue Next 5Y5.08%
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
A Price/Earnings ratio of 17.82 indicates a rather expensive valuation of PNW.
PNW's Price/Earnings ratio is in line with the industry average.
PNW's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.30.
Based on the Price/Forward Earnings ratio of 17.53, the valuation of PNW can be described as rather expensive.
PNW's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 21.76. PNW is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.82 | ||
| Fwd PE | 17.53 |
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 | 9.86 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)10.03
EPS Next 2Y-1.03%
EPS Next 3Y3.15%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.96%, PNW has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.63, PNW pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.37, PNW pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.96% |
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
68.37% of the earnings are spent on dividend by PNW. This is not a sustainable payout ratio.
The dividend of PNW is growing, but earnings are growing more, so the dividend growth is sustainable.
DP68.37%
EPS Next 2Y-1.03%
EPS Next 3Y3.15%
89.62
-0.48 (-0.53%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners96.98%
Inst Owner Change0%
Ins Owners0.11%
Ins Owner Change17.7%
Market Cap10.70B
Analysts73.33
Price Target98.5 (9.91%)
Short Float %3.24%
Short Ratio3.08
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.96% |
Yearly Dividend3.39
Dividend Growth(5Y)2.9%
DP68.37%
Div Incr Years13
Div Non Decr Years31
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-131.46%
Min EPS beat(2)-321.25%
Max EPS beat(2)58.34%
EPS beat(4)2
Avg EPS beat(4)-57.02%
Min EPS beat(4)-321.25%
Max EPS beat(4)58.34%
EPS beat(8)5
Avg EPS beat(8)217.62%
EPS beat(12)7
Avg EPS beat(12)130.22%
EPS beat(16)11
Avg EPS beat(16)128.14%
Revenue beat(2)2
Avg Revenue beat(2)3.22%
Min Revenue beat(2)2.21%
Max Revenue beat(2)4.23%
Revenue beat(4)3
Avg Revenue beat(4)1.79%
Min Revenue beat(4)-6.56%
Max Revenue beat(4)7.29%
Revenue beat(8)5
Avg Revenue beat(8)-0.43%
Revenue beat(12)9
Avg Revenue beat(12)7.5%
Revenue beat(16)13
Avg Revenue beat(16)8.16%
PT rev (1m)-0.52%
PT rev (3m)-0.47%
EPS NQ rev (1m)0.59%
EPS NQ rev (3m)4%
EPS NY rev (1m)-0.13%
EPS NY rev (3m)-0.79%
Revenue NQ rev (1m)0.29%
Revenue NQ rev (3m)0.22%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.82 | ||
| Fwd PE | 17.53 | ||
| P/S | 2.06 | ||
| P/FCF | N/A | ||
| P/OCF | 6.43 | ||
| P/B | 1.59 | ||
| P/tB | 1.73 | ||
| EV/EBITDA | 9.86 |
EPS(TTM)5.03
EY5.61%
EPS(NY)5.11
Fwd EY5.71%
FCF(TTM)-5.78
FCFYN/A
OCF(TTM)13.94
OCFY15.55%
SpS43.6
BVpS56.44
TBVpS51.78
PEG (NY)N/A
PEG (5Y)10.03
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.16% | ||
| ROE | 8.72% | ||
| ROCE | 4.17% | ||
| ROIC | 3.24% | ||
| ROICexc | 3.24% | ||
| ROICexgc | 3.31% | ||
| OM | 19.26% | ||
| PM (TTM) | 11.28% | ||
| GM | N/A | ||
| FCFM | N/A |
ROA(3y)2.16%
ROA(5y)2.41%
ROE(3y)8.38%
ROE(5y)9.08%
ROIC(3y)3.05%
ROIC(5y)3.14%
ROICexc(3y)3.05%
ROICexc(5y)3.14%
ROICexgc(3y)3.1%
ROICexgc(5y)3.19%
ROCE(3y)3.88%
ROCE(5y)3.97%
ROICexcg growth 3Y3.09%
ROICexcg growth 5Y3.77%
ROICexc growth 3Y2.69%
ROICexc growth 5Y3.62%
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
F-Score7
Asset Turnover0.19
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.33 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 4.5 | ||
| Cap/Depr | 240.1% | ||
| Cap/Sales | 45.22% | ||
| Interest Coverage | 2.73 | ||
| Cash Conversion | 83.94% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.5 | ||
| Quick Ratio | 0.34 | ||
| Altman-Z | 0.74 |
F-Score7
WACC6.31%
ROIC/WACC0.51
Cap/Depr(3y)220.06%
Cap/Depr(5y)211.68%
Cap/Sales(3y)40.9%
Cap/Sales(5y)39.68%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)9.59%
EPS 3Y-1.55%
EPS 5Y1.78%
EPS Q2Q%-126.67%
EPS Next Y-12.12%
EPS Next 2Y-1.03%
EPS Next 3Y3.15%
EPS Next 5Y4.3%
Revenue 1Y (TTM)10.69%
Revenue growth 3Y10.45%
Revenue growth 5Y8.1%
Sales Q2Q%8.47%
Revenue Next Year3.39%
Revenue Next 2Y4.66%
Revenue Next 3Y4.98%
Revenue Next 5Y5.08%
EBIT growth 1Y19.24%
EBIT growth 3Y7.91%
EBIT growth 5Y11.51%
EBIT Next Year103.03%
EBIT Next 3Y35.66%
EBIT Next 5Y23.89%
FCF growth 1Y-6.32%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y49.61%
OCF growth 3Y23.24%
OCF growth 5Y10.97%