BEST BUY CO INC (BBY) Stock Fundamental Analysis
NYSE:BBY - New York Stock Exchange, Inc. - US0865161014 - Common Stock - Currency: USD
BBY gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 121 industry peers in the Specialty Retail industry. BBY has an average financial health and profitability rating. BBY has a correct valuation and a medium growth rate. BBY also has an excellent dividend rating. This makes BBY very considerable for dividend investing!
1. Profitability
1.1 Basic Checks
In the past year BBY was profitable.
BBY had a positive operating cash flow in the past year.
In the past 5 years BBY has always been profitable.
Each year in the past 5 years BBY had a positive operating cash flow.
1.2 Ratios
BBY has a better Return On Assets (6.27%) than 73.55% of its industry peers.
The Return On Equity of BBY (33.01%) is better than 86.78% of its industry peers.
BBY has a Return On Invested Capital of 18.94%. This is amongst the best in the industry. BBY outperforms 86.78% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for BBY is significantly above the industry average of 12.74%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.27% | ||
| ROE | 33.01% | ||
| ROIC | 18.94% |
ROA(3y)7.85%
ROA(5y)9.4%
ROE(3y)41.48%
ROE(5y)48.98%
ROIC(3y)19.35%
ROIC(5y)22.54%
1.3 Margins
With a Profit Margin value of 2.23%, BBY perfoms like the industry average, outperforming 57.85% of the companies in the same industry.
BBY's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 4.18%, BBY is in the better half of the industry, outperforming 60.33% of the companies in the same industry.
BBY's Operating Margin has declined in the last couple of years.
The Gross Margin of BBY (22.60%) is worse than 76.86% of its industry peers.
In the last couple of years the Gross Margin of BBY has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.18% | ||
| PM (TTM) | 2.23% | ||
| GM | 22.6% |
OM growth 3Y-10.46%
OM growth 5Y-2.33%
PM growth 3Y-22.2%
PM growth 5Y-8.77%
GM growth 3Y0.15%
GM growth 5Y-0.37%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so BBY is creating value.
BBY has less shares outstanding than it did 1 year ago.
The number of shares outstanding for BBY has been reduced compared to 5 years ago.
BBY has a worse debt/assets ratio than last year.
2.2 Solvency
BBY has an Altman-Z score of 4.20. This indicates that BBY is financially healthy and has little risk of bankruptcy at the moment.
BBY's Altman-Z score of 4.20 is amongst the best of the industry. BBY outperforms 84.30% of its industry peers.
BBY has a debt to FCF ratio of 0.83. This is a very positive value and a sign of high solvency as it would only need 0.83 years to pay back of all of its debts.
BBY's Debt to FCF ratio of 0.83 is fine compared to the rest of the industry. BBY outperforms 78.51% of its industry peers.
BBY has a Debt/Equity ratio of 0.41. This is a healthy value indicating a solid balance between debt and equity.
BBY has a Debt to Equity ratio (0.41) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.41 | ||
| Debt/FCF | 0.83 | ||
| Altman-Z | 4.2 |
ROIC/WACC1.98
WACC9.58%
2.3 Liquidity
A Current Ratio of 1.03 indicates that BBY should not have too much problems paying its short term obligations.
The Current ratio of BBY (1.03) is worse than 74.38% of its industry peers.
A Quick Ratio of 0.39 indicates that BBY may have some problems paying its short term obligations.
BBY has a worse Quick ratio (0.39) than 65.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.03 | ||
| Quick Ratio | 0.39 |
3. Growth
3.1 Past
BBY shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 0.00%.
BBY shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 0.80% yearly.
BBY shows a decrease in Revenue. In the last year, the revenue decreased by -4.43%.
The Revenue has been decreasing by -0.99% on average over the past years.
EPS 1Y (TTM)0%
EPS 3Y-13.97%
EPS 5Y0.8%
EPS Q2Q%-5.15%
Revenue 1Y (TTM)-4.43%
Revenue growth 3Y-7.08%
Revenue growth 5Y-0.99%
Sales Q2Q%-4.77%
3.2 Future
The Earnings Per Share is expected to grow by 14.74% on average over the next years. This is quite good.
Based on estimates for the next years, BBY will show a small growth in Revenue. The Revenue will grow by 2.10% on average per year.
EPS Next Y-2.37%
EPS Next 2Y3.39%
EPS Next 3Y6.63%
EPS Next 5Y14.74%
Revenue Next Year0.27%
Revenue Next 2Y1.08%
Revenue Next 3Y1.72%
Revenue Next 5Y2.1%
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.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 11.15 indicates a reasonable valuation of BBY.
BBY's Price/Earnings ratio is rather cheap when compared to the industry. BBY is cheaper than 81.82% of the companies in the same industry.
BBY is valuated cheaply when we compare the Price/Earnings ratio to 26.60, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 11.42, the valuation of BBY can be described as very reasonable.
Based on the Price/Forward Earnings ratio, BBY is valued a bit cheaper than the industry average as 75.21% of the companies are valued more expensively.
BBY is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.43, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.15 | ||
| Fwd PE | 11.42 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of BBY indicates a somewhat cheap valuation: BBY is cheaper than 76.86% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, BBY is valued a bit cheaper than the industry average as 79.34% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.8 | ||
| EV/EBITDA | 5.62 |
4.3 Compensation for Growth
BBY has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)13.89
EPS Next 2Y3.39%
EPS Next 3Y6.63%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.22%, BBY is a good candidate for dividend investing.
In the last 3 months the price of BBY has falen by -20.75%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
BBY's Dividend Yield is rather good when compared to the industry average which is at 5.10. BBY pays more dividend than 91.74% of the companies in the same industry.
BBY's Dividend Yield is rather good when compared to the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.22% |
5.2 History
On average, the dividend of BBY grows each year by 13.37%, which is quite nice.
BBY has paid a dividend for at least 10 years, which is a reliable track record.
BBY has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)13.37%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
87.06% of the earnings are spent on dividend by BBY. This is not a sustainable payout ratio.
The dividend of BBY is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP87.06%
EPS Next 2Y3.39%
EPS Next 3Y6.63%
71.15
-0.45 (-0.63%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners87.27%
Inst Owner Change0.48%
Ins Owners0.29%
Ins Owner Change2.37%
Market Cap15.04B
Analysts68.48
Price Target88.77 (24.76%)
Short Float %7.34%
Short Ratio3.11
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.22% |
Yearly Dividend3.78
Dividend Growth(5Y)13.37%
DP87.06%
Div Incr Years13
Div Non Decr Years13
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.42%
Min EPS beat(2)-3.62%
Max EPS beat(2)6.45%
EPS beat(4)3
Avg EPS beat(4)6.98%
Min EPS beat(4)-3.62%
Max EPS beat(4)14.65%
EPS beat(8)7
Avg EPS beat(8)7.33%
EPS beat(12)10
Avg EPS beat(12)10.89%
EPS beat(16)13
Avg EPS beat(16)15.98%
Revenue beat(2)1
Avg Revenue beat(2)-1.07%
Min Revenue beat(2)-2.93%
Max Revenue beat(2)0.79%
Revenue beat(4)1
Avg Revenue beat(4)-1.22%
Min Revenue beat(4)-2.93%
Max Revenue beat(4)0.79%
Revenue beat(8)1
Avg Revenue beat(8)-1.19%
Revenue beat(12)3
Avg Revenue beat(12)-0.63%
Revenue beat(16)6
Avg Revenue beat(16)0.27%
PT rev (1m)-2.79%
PT rev (3m)-12.24%
EPS NQ rev (1m)0.18%
EPS NQ rev (3m)-13.77%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)-6.36%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)-1.31%
Revenue NY rev (1m)-0.14%
Revenue NY rev (3m)-1.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.15 | ||
| Fwd PE | 11.42 | ||
| P/S | 0.36 | ||
| P/FCF | 10.8 | ||
| P/OCF | 7.17 | ||
| P/B | 5.36 | ||
| P/tB | 8.39 | ||
| EV/EBITDA | 5.62 |
EPS(TTM)6.38
EY8.97%
EPS(NY)6.23
Fwd EY8.75%
FCF(TTM)6.59
FCFY9.26%
OCF(TTM)9.93
OCFY13.95%
SpS196.47
BVpS13.28
TBVpS8.48
PEG (NY)N/A
PEG (5Y)13.89
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.27% | ||
| ROE | 33.01% | ||
| ROCE | 25.63% | ||
| ROIC | 18.94% | ||
| ROICexc | 24.69% | ||
| ROICexgc | 30.7% | ||
| OM | 4.18% | ||
| PM (TTM) | 2.23% | ||
| GM | 22.6% | ||
| FCFM | 3.35% |
ROA(3y)7.85%
ROA(5y)9.4%
ROE(3y)41.48%
ROE(5y)48.98%
ROIC(3y)19.35%
ROIC(5y)22.54%
ROICexc(3y)25.47%
ROICexc(5y)38.8%
ROICexgc(3y)34.77%
ROICexgc(5y)61.16%
ROCE(3y)26.19%
ROCE(5y)30.58%
ROICexcg growth 3Y-32.43%
ROICexcg growth 5Y-4.41%
ROICexc growth 3Y-24.39%
ROICexc growth 5Y-2.87%
OM growth 3Y-10.46%
OM growth 5Y-2.33%
PM growth 3Y-22.2%
PM growth 5Y-8.77%
GM growth 3Y0.15%
GM growth 5Y-0.37%
F-Score6
Asset Turnover2.81
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.41 | ||
| Debt/FCF | 0.83 | ||
| Debt/EBITDA | 0.44 | ||
| Cap/Depr | 81.52% | ||
| Cap/Sales | 1.7% | ||
| Interest Coverage | 37.7 | ||
| Cash Conversion | 80.69% | ||
| Profit Quality | 150.16% | ||
| Current Ratio | 1.03 | ||
| Quick Ratio | 0.39 | ||
| Altman-Z | 4.2 |
F-Score6
WACC9.58%
ROIC/WACC1.98
Cap/Depr(3y)89.65%
Cap/Depr(5y)87.75%
Cap/Sales(3y)1.85%
Cap/Sales(5y)1.69%
Profit Quality(3y)89.19%
Profit Quality(5y)120.88%
High Growth Momentum
Growth
EPS 1Y (TTM)0%
EPS 3Y-13.97%
EPS 5Y0.8%
EPS Q2Q%-5.15%
EPS Next Y-2.37%
EPS Next 2Y3.39%
EPS Next 3Y6.63%
EPS Next 5Y14.74%
Revenue 1Y (TTM)-4.43%
Revenue growth 3Y-7.08%
Revenue growth 5Y-0.99%
Sales Q2Q%-4.77%
Revenue Next Year0.27%
Revenue Next 2Y1.08%
Revenue Next 3Y1.72%
Revenue Next 5Y2.1%
EBIT growth 1Y0.41%
EBIT growth 3Y-16.8%
EBIT growth 5Y-3.29%
EBIT Next Year54.2%
EBIT Next 3Y18.91%
EBIT Next 5Y13.58%
FCF growth 1Y106.22%
FCF growth 3Y-17.9%
FCF growth 5Y-5.24%
OCF growth 1Y42.72%
OCF growth 3Y-13.59%
OCF growth 5Y-3.94%