SONIC AUTOMOTIVE INC-CLASS A (SAH) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:SAH - US83545G1022 - Common Stock
61.23 USD
-2.18 (-3.44%)
61.23 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to SAH. SAH was compared to 121 industry peers in the Specialty Retail industry. Both the profitability and the financial health of SAH get a neutral evaluation. Nothing too spectacular is happening here. A decent growth rate in combination with a cheap valuation! Better keep an eye on SAH. Finally SAH also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- In the past year SAH was profitable.
- In the past year SAH had a positive cash flow from operations.
- SAH had positive earnings in 4 of the past 5 years.
- Of the past 5 years SAH 4 years had a positive operating cash flow.
1.2 Ratios
- With a Return On Assets value of 2.17%, SAH perfoms like the industry average, outperforming 56.20% of the companies in the same industry.
- The Return On Equity of SAH (12.19%) is better than 68.59% of its industry peers.
- The Return On Invested Capital of SAH (8.31%) is better than 70.25% of its industry peers.
- SAH had an Average Return On Invested Capital over the past 3 years of 8.98%. This is below the industry average of 12.37%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.17% | ||
| ROE | 12.19% | ||
| ROIC | 8.31% |
ROA(3y)2.92%
ROA(5y)2.88%
ROE(3y)16.73%
ROE(5y)15.27%
ROIC(3y)8.98%
ROIC(5y)8.83%
1.3 Margins
- With a Profit Margin value of 0.86%, SAH perfoms like the industry average, outperforming 53.72% of the companies in the same industry.
- In the last couple of years the Profit Margin of SAH has grown nicely.
- SAH has a Operating Margin (3.64%) which is comparable to the rest of the industry.
- SAH's Operating Margin has been stable in the last couple of years.
- With a Gross Margin value of 15.54%, SAH is not doing good in the industry: 83.47% of the companies in the same industry are doing better.
- In the last couple of years the Gross Margin of SAH has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.64% | ||
| PM (TTM) | 0.86% | ||
| GM | 15.54% |
OM growth 3Y-9.02%
OM growth 5Y0.78%
PM growth 3Y-18.59%
PM growth 5Y1.97%
GM growth 3Y-0.06%
GM growth 5Y1.16%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so SAH is still creating some value.
- Compared to 1 year ago, SAH has more shares outstanding
- SAH has less shares outstanding than it did 5 years ago.
- Compared to 1 year ago, SAH has an improved debt to assets ratio.
2.2 Solvency
- SAH has an Altman-Z score of 3.44. This indicates that SAH is financially healthy and has little risk of bankruptcy at the moment.
- SAH's Altman-Z score of 3.44 is fine compared to the rest of the industry. SAH outperforms 78.51% of its industry peers.
- SAH has a debt to FCF ratio of 8.88. This is a slightly negative value and a sign of low solvency as SAH would need 8.88 years to pay back of all of its debts.
- With a decent Debt to FCF ratio value of 8.88, SAH is doing good in the industry, outperforming 60.33% of the companies in the same industry.
- A Debt/Equity ratio of 3.54 is on the high side and indicates that SAH has dependencies on debt financing.
- SAH has a worse Debt to Equity ratio (3.54) than 74.38% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.54 | ||
| Debt/FCF | 8.88 | ||
| Altman-Z | 3.44 |
ROIC/WACC0.99
WACC8.37%
2.3 Liquidity
- SAH has a Current Ratio of 1.02. This is a normal value and indicates that SAH is financially healthy and should not expect problems in meeting its short term obligations.
- SAH has a Current ratio of 1.02. This is in the lower half of the industry: SAH underperforms 74.38% of its industry peers.
- A Quick Ratio of 0.27 indicates that SAH may have some problems paying its short term obligations.
- The Quick ratio of SAH (0.27) is worse than 77.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.02 | ||
| Quick Ratio | 0.27 |
3. Growth
3.1 Past
- SAH shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.21%, which is quite good.
- Measured over the past years, SAH shows a quite strong growth in Earnings Per Share. The EPS has been growing by 16.23% on average per year.
- The Revenue has grown by 9.09% in the past year. This is quite good.
- The Revenue has been growing slightly by 6.35% on average over the past years.
EPS 1Y (TTM)15.21%
EPS 3Y-12.92%
EPS 5Y16.23%
EPS Q2Q%11.9%
Revenue 1Y (TTM)9.09%
Revenue growth 3Y4.69%
Revenue growth 5Y6.35%
Sales Q2Q%13.81%
3.2 Future
- SAH is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.29% yearly.
- Based on estimates for the next years, SAH will show a small growth in Revenue. The Revenue will grow by 7.76% on average per year.
EPS Next Y20.35%
EPS Next 2Y12.94%
EPS Next 3Y11.51%
EPS Next 5Y14.29%
Revenue Next Year8.96%
Revenue Next 2Y6.11%
Revenue Next 3Y5.56%
Revenue Next 5Y7.76%
3.3 Evolution
- The EPS growth rate is stable: in the next years the growth will be about the same 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.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 9.29 indicates a reasonable valuation of SAH.
- Compared to the rest of the industry, the Price/Earnings ratio of SAH indicates a rather cheap valuation: SAH is cheaper than 88.43% of the companies listed in the same industry.
- When comparing the Price/Earnings ratio of SAH to the average of the S&P500 Index (27.21), we can say SAH is valued rather cheaply.
- Based on the Price/Forward Earnings ratio of 8.57, the valuation of SAH can be described as reasonable.
- 90.08% of the companies in the same industry are more expensive than SAH, based on the Price/Forward Earnings ratio.
- SAH is valuated cheaply when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.29 | ||
| Fwd PE | 8.57 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, SAH is valued cheaper than 85.12% of the companies in the same industry.
- 95.87% of the companies in the same industry are more expensive than SAH, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.82 | ||
| EV/EBITDA | 5.69 |
4.3 Compensation for Growth
- SAH's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
PEG (NY)0.46
PEG (5Y)0.57
EPS Next 2Y12.94%
EPS Next 3Y11.51%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.40%, SAH has a reasonable but not impressive dividend return.
- SAH's Dividend Yield is rather good when compared to the industry average which is at 2.13. SAH pays more dividend than 81.82% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.81, SAH pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.4% |
5.2 History
- On average, the dividend of SAH grows each year by 27.13%, which is quite nice.
- SAH has paid a dividend for at least 10 years, which is a reliable track record.
- SAH has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)27.13%
Div Incr Years4
Div Non Decr Years14
5.3 Sustainability
- 35.28% of the earnings are spent on dividend by SAH. This is a low number and sustainable payout ratio.
- SAH's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP35.28%
EPS Next 2Y12.94%
EPS Next 3Y11.51%
SONIC AUTOMOTIVE INC-CLASS A / SAH FAQ
What is the ChartMill fundamental rating of SONIC AUTOMOTIVE INC-CLASS A (SAH) stock?
ChartMill assigns a fundamental rating of 5 / 10 to SAH.
What is the valuation status of SONIC AUTOMOTIVE INC-CLASS A (SAH) stock?
ChartMill assigns a valuation rating of 8 / 10 to SONIC AUTOMOTIVE INC-CLASS A (SAH). This can be considered as Undervalued.
Can you provide the profitability details for SONIC AUTOMOTIVE INC-CLASS A?
SONIC AUTOMOTIVE INC-CLASS A (SAH) has a profitability rating of 4 / 10.
How financially healthy is SONIC AUTOMOTIVE INC-CLASS A?
The financial health rating of SONIC AUTOMOTIVE INC-CLASS A (SAH) is 4 / 10.
What is the earnings growth outlook for SONIC AUTOMOTIVE INC-CLASS A?
The Earnings per Share (EPS) of SONIC AUTOMOTIVE INC-CLASS A (SAH) is expected to grow by 20.35% in the next year.