BEST BUY CO INC (BBY) Stock Fundamental Analysis
NYSE:BBY - New York Stock Exchange, Inc. - US0865161014 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to BBY. BBY was compared to 120 industry peers in the Specialty Retail industry. Both the profitability and the financial health of BBY get a neutral evaluation. Nothing too spectacular is happening here. BBY has a valuation in line with the averages, but on the other hand it scores bad on growth. Finally 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.
In the past year BBY had a positive cash flow from operations.
Each year in the past 5 years BBY has been profitable.
In the past 5 years BBY always reported a positive cash flow from operatings.
1.2 Ratios
BBY has a better Return On Assets (6.25%) than 72.50% of its industry peers.
Looking at the Return On Equity, with a value of 31.96%, BBY belongs to the top of the industry, outperforming 86.67% of the companies in the same industry.
The Return On Invested Capital of BBY (19.09%) is better than 86.67% 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 13.32%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.25% | ||
| ROE | 31.96% | ||
| ROIC | 19.09% |
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 (2.13%) which is in line with its industry peers.
BBY's Profit Margin has declined in the last couple of years.
With a decent Operating Margin value of 4.19%, BBY is doing good in the industry, outperforming 60.83% of the companies in the same industry.
BBY's Operating Margin has declined in the last couple of years.
BBY has a Gross Margin of 22.61%. This is in the lower half of the industry: BBY underperforms 76.67% of its industry peers.
BBY's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.19% | ||
| PM (TTM) | 2.13% | ||
| GM | 22.61% |
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.
Compared to 1 year ago, BBY has less shares outstanding
BBY has less shares outstanding than it did 5 years ago.
BBY has a worse debt/assets ratio than last year.
2.2 Solvency
The Debt to FCF ratio of BBY is 0.92, which is an excellent value as it means it would take BBY, only 0.92 years of fcf income to pay off all of its debts.
BBY's Debt to FCF ratio of 0.92 is amongst the best of the industry. BBY outperforms 80.83% of its industry peers.
A Debt/Equity ratio of 0.42 indicates that BBY is not too dependend on debt financing.
BBY's Debt to Equity ratio of 0.42 is in line compared to the rest of the industry. BBY outperforms 53.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 0.92 | ||
| Altman-Z | N/A |
ROIC/WACC2.03
WACC9.41%
2.3 Liquidity
BBY has a Current Ratio of 1.02. This is a normal value and indicates that BBY is financially healthy and should not expect problems in meeting its short term obligations.
BBY's Current ratio of 1.02 is on the low side compared to the rest of the industry. BBY is outperformed by 72.50% of its industry peers.
BBY has a Quick Ratio of 1.02. This is a bad value and indicates that BBY is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.32, BBY is not doing good in the industry: 70.00% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.02 | ||
| Quick Ratio | 0.32 |
3. Growth
3.1 Past
The earnings per share for BBY have decreased by -1.56% in the last year.
Measured over the past 5 years, BBY shows a small growth in Earnings Per Share. The EPS has been growing by 0.80% on average per year.
The Revenue has decreased by -3.23% in the past year.
Measured over the past years, BBY shows a decrease in Revenue. The Revenue has been decreasing by -0.99% on average per year.
EPS 1Y (TTM)-1.56%
EPS 3Y-13.97%
EPS 5Y0.8%
EPS Q2Q%-4.17%
Revenue 1Y (TTM)-3.23%
Revenue growth 3Y-7.08%
Revenue growth 5Y-0.99%
Sales Q2Q%-0.9%
3.2 Future
The Earnings Per Share is expected to grow by 13.16% on average over the next years. This is quite good.
The Revenue is expected to grow by 2.11% on average over the next years.
EPS Next Y-2.37%
EPS Next 2Y3.39%
EPS Next 3Y5.49%
EPS Next 5Y13.16%
Revenue Next Year0.34%
Revenue Next 2Y1.05%
Revenue Next 3Y1.57%
Revenue Next 5Y2.11%
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 11.48 indicates a reasonable valuation of BBY.
Based on the Price/Earnings ratio, BBY is valued a bit cheaper than 79.17% of the companies in the same industry.
BBY's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.55.
Based on the Price/Forward Earnings ratio of 10.65, the valuation of BBY can be described as reasonable.
Based on the Price/Forward Earnings ratio, BBY is valued a bit cheaper than the industry average as 73.33% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 22.40. BBY is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.48 | ||
| Fwd PE | 10.65 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, BBY is valued a bit cheaper than the industry average as 76.67% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of BBY indicates a somewhat cheap valuation: BBY is cheaper than 77.50% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.21 | ||
| EV/EBITDA | 6.12 |
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)14.3
EPS Next 2Y3.39%
EPS Next 3Y5.49%
5. Dividend
5.1 Amount
BBY has a Yearly Dividend Yield of 5.39%, which is a nice return.
BBY's Dividend Yield is rather good when compared to the industry average which is at 5.18. BBY pays more dividend than 93.33% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.39, BBY pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.39% |
5.2 History
On average, the dividend of BBY grows each year by 13.37%, which is quite nice.
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)13.37%
Div Incr Years14
Div Non Decr Years14
5.3 Sustainability
BBY pays out 91.39% of its income as dividend. This is not a sustainable payout ratio.
The dividend of BBY is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP91.39%
EPS Next 2Y3.39%
EPS Next 3Y5.49%
72.65
-2.26 (-3.02%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners87.27%
Inst Owner Change0.52%
Ins Owners0.29%
Ins Owner Change2.37%
Market Cap15.38B
Analysts68.75
Price Target80.15 (10.32%)
Short Float %5.93%
Short Ratio2.59
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.39% |
Yearly Dividend3.78
Dividend Growth(5Y)13.37%
DP91.39%
Div Incr Years14
Div Non Decr Years14
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.43%
Min EPS beat(2)4.41%
Max EPS beat(2)6.45%
EPS beat(4)3
Avg EPS beat(4)5.47%
Min EPS beat(4)-3.62%
Max EPS beat(4)14.65%
EPS beat(8)7
Avg EPS beat(8)7.57%
EPS beat(12)11
Avg EPS beat(12)11.53%
EPS beat(16)13
Avg EPS beat(16)12.58%
Revenue beat(2)1
Avg Revenue beat(2)-0.36%
Min Revenue beat(2)-1.51%
Max Revenue beat(2)0.79%
Revenue beat(4)1
Avg Revenue beat(4)-1.04%
Min Revenue beat(4)-2.93%
Max Revenue beat(4)0.79%
Revenue beat(8)1
Avg Revenue beat(8)-1.18%
Revenue beat(12)2
Avg Revenue beat(12)-0.86%
Revenue beat(16)5
Avg Revenue beat(16)-0.47%
PT rev (1m)-9.71%
PT rev (3m)-20.73%
EPS NQ rev (1m)-8.57%
EPS NQ rev (3m)-15.22%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)-5.99%
Revenue NQ rev (1m)-0.31%
Revenue NQ rev (3m)-1.84%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.96%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.48 | ||
| Fwd PE | 10.65 | ||
| P/S | 0.37 | ||
| P/FCF | 12.21 | ||
| P/OCF | 7.77 | ||
| P/B | 5.57 | ||
| P/tB | 8.29 | ||
| EV/EBITDA | 6.12 |
EPS(TTM)6.33
EY8.71%
EPS(NY)6.82
Fwd EY9.39%
FCF(TTM)5.95
FCFY8.19%
OCF(TTM)9.35
OCFY12.87%
SpS195.8
BVpS13.05
TBVpS8.76
PEG (NY)N/A
PEG (5Y)14.3
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.25% | ||
| ROE | 31.96% | ||
| ROCE | 25.83% | ||
| ROIC | 19.09% | ||
| ROICexc | 23.02% | ||
| ROICexgc | 27.5% | ||
| OM | 4.19% | ||
| PM (TTM) | 2.13% | ||
| GM | 22.61% | ||
| FCFM | 3.04% |
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-Score7
Asset Turnover2.93
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 0.92 | ||
| Debt/EBITDA | 0.44 | ||
| Cap/Depr | 83.92% | ||
| Cap/Sales | 1.74% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 76.36% | ||
| Profit Quality | 142.7% | ||
| Current Ratio | 1.02 | ||
| Quick Ratio | 0.32 | ||
| Altman-Z | N/A |
F-Score7
WACC9.41%
ROIC/WACC2.03
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)-1.56%
EPS 3Y-13.97%
EPS 5Y0.8%
EPS Q2Q%-4.17%
EPS Next Y-2.37%
EPS Next 2Y3.39%
EPS Next 3Y5.49%
EPS Next 5Y13.16%
Revenue 1Y (TTM)-3.23%
Revenue growth 3Y-7.08%
Revenue growth 5Y-0.99%
Sales Q2Q%-0.9%
Revenue Next Year0.34%
Revenue Next 2Y1.05%
Revenue Next 3Y1.57%
Revenue Next 5Y2.11%
EBIT growth 1Y-0.97%
EBIT growth 3Y-16.8%
EBIT growth 5Y-3.29%
EBIT Next Year52.93%
EBIT Next 3Y18.22%
EBIT Next 5Y11.58%
FCF growth 1Y-35.65%
FCF growth 3Y-17.9%
FCF growth 5Y-5.24%
OCF growth 1Y-31.18%
OCF growth 3Y-13.59%
OCF growth 5Y-3.94%