BEST BUY CO INC (BBY) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:BBY - US0865161014 - Common Stock
67.05 USD
-0.01 (-0.01%)
67.05 USD
0 (0%)
BBY gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 122 industry peers in the Specialty Retail industry. BBY has an average financial health and profitability rating. BBY is cheap, but on the other hand it scores bad on growth. Finally BBY also has an excellent dividend rating. These ratings could make BBY a good candidate for value and dividend investing.
1. Profitability
1.1 Basic Checks
- BBY had positive earnings in the past year.
- In the past year BBY had a positive cash flow from operations.
- 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 Return On Assets of 3.84%. This is in the better half of the industry: BBY outperforms 62.81% of its industry peers.
- BBY's Return On Equity of 24.31% is amongst the best of the industry. BBY outperforms 82.64% of its industry peers.
- BBY has a better Return On Invested Capital (19.29%) than 87.60% of its industry peers.
- BBY had an Average Return On Invested Capital over the past 3 years of 19.35%. This is significantly above the industry average of 12.24%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.84% | ||
| ROE | 24.31% | ||
| ROIC | 19.29% |
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
- BBY has a Profit Margin of 1.54%. This is comparable to the rest of the industry: BBY outperforms 57.02% of its industry peers.
- BBY's Profit Margin has declined in the last couple of years.
- BBY has a better Operating Margin (4.16%) than 60.33% of its industry peers.
- BBY's Operating Margin has declined in the last couple of years.
- BBY has a worse Gross Margin (22.50%) than 77.69% 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 | 4.16% | ||
| PM (TTM) | 1.54% | ||
| GM | 22.5% |
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
- BBY has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
- BBY has less shares outstanding than it did 1 year ago.
- Compared to 5 years ago, BBY has less shares outstanding
- BBY has a worse debt/assets ratio than last year.
2.2 Solvency
- BBY has a debt to FCF ratio of 0.77. This is a very positive value and a sign of high solvency as it would only need 0.77 years to pay back of all of its debts.
- BBY's Debt to FCF ratio of 0.77 is amongst the best of the industry. BBY outperforms 81.82% of its industry peers.
- BBY has a Debt/Equity ratio of 0.44. This is a healthy value indicating a solid balance between debt and equity.
- The Debt to Equity ratio of BBY (0.44) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | 0.77 | ||
| Altman-Z | N/A |
ROIC/WACC2.02
WACC9.54%
2.3 Liquidity
- A Current Ratio of 1.05 indicates that BBY should not have too much problems paying its short term obligations.
- BBY has a worse Current ratio (1.05) than 71.90% of its industry peers.
- BBY has a Quick Ratio of 1.05. This is a bad value and indicates that BBY is not financially healthy enough and could expect problems in meeting its short term obligations.
- The Quick ratio of BBY (0.26) is worse than 82.64% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.05 | ||
| Quick Ratio | 0.26 |
3. Growth
3.1 Past
- The earnings per share for BBY have decreased by -1.69% in the last year.
- The Earnings Per Share has been growing slightly by 0.80% on average over the past years.
- Looking at the last year, BBY shows a decrease in Revenue. The Revenue has decreased by -0.95% in the last year.
- The Revenue has been decreasing by -0.99% on average over the past years.
EPS 1Y (TTM)-1.69%
EPS 3Y-13.97%
EPS 5Y0.8%
EPS Q2Q%11.11%
Revenue 1Y (TTM)-0.95%
Revenue growth 3Y-7.08%
Revenue growth 5Y-0.99%
Sales Q2Q%2.4%
3.2 Future
- BBY is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.95% yearly.
- BBY is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.25% yearly.
EPS Next Y0.05%
EPS Next 2Y3.23%
EPS Next 3Y5.19%
EPS Next 5Y9.95%
Revenue Next Year1.35%
Revenue Next 2Y1.36%
Revenue Next 3Y1.53%
Revenue Next 5Y2.25%
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 accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- BBY is valuated reasonably with a Price/Earnings ratio of 10.46.
- BBY's Price/Earnings ratio is rather cheap when compared to the industry. BBY is cheaper than 84.30% of the companies in the same industry.
- BBY is valuated cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- Based on the Price/Forward Earnings ratio of 9.86, the valuation of BBY can be described as reasonable.
- BBY's Price/Forward Earnings ratio is rather cheap when compared to the industry. BBY is cheaper than 85.12% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.98. BBY is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.46 | ||
| Fwd PE | 9.86 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, BBY is valued cheaply inside the industry as 86.78% of the companies are valued more expensively.
- 86.78% of the companies in the same industry are more expensive than BBY, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.3 | ||
| EV/EBITDA | 5.54 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates BBY does not grow enough to justify the current Price/Earnings ratio.
- BBY has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)213.95
PEG (5Y)13.03
EPS Next 2Y3.23%
EPS Next 3Y5.19%
5. Dividend
5.1 Amount
- BBY has a Yearly Dividend Yield of 5.67%, which is a nice return.
- BBY's Dividend Yield is rather good when compared to the industry average which is at 2.15. BBY pays more dividend than 95.04% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.81, BBY pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.67% |
5.2 History
- The dividend of BBY is nicely growing with an annual growth rate of 13.38%!
- BBY has been paying a dividend for at least 10 years, so it has 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)13.38%
Div Incr Years14
Div Non Decr Years14
5.3 Sustainability
- BBY pays out 124.34% of its income as dividend. This is not a sustainable payout ratio.
- BBY's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP124.34%
EPS Next 2Y3.23%
EPS Next 3Y5.19%
BEST BUY CO INC / BBY FAQ
What is the ChartMill fundamental rating of BEST BUY CO INC (BBY) stock?
ChartMill assigns a fundamental rating of 5 / 10 to BBY.
What is the valuation status of BEST BUY CO INC (BBY) stock?
ChartMill assigns a valuation rating of 7 / 10 to BEST BUY CO INC (BBY). This can be considered as Undervalued.
How profitable is BEST BUY CO INC (BBY) stock?
BEST BUY CO INC (BBY) has a profitability rating of 6 / 10.
What is the expected EPS growth for BEST BUY CO INC (BBY) stock?
The Earnings per Share (EPS) of BEST BUY CO INC (BBY) is expected to grow by 0.05% in the next year.
How sustainable is the dividend of BEST BUY CO INC (BBY) stock?
The dividend rating of BEST BUY CO INC (BBY) is 7 / 10 and the dividend payout ratio is 124.34%.