BEST BUY CO INC (BBY) Stock Fundamental Analysis
NYSE:BBY - New York Stock Exchange, Inc. - US0865161014 - Common Stock - Currency: USD
Taking everything into account, BBY scores 6 out of 10 in our fundamental rating. BBY was compared to 123 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 is valued quite cheap, but it does not seem to be growing. BBY also has an excellent dividend rating. These ratings would make BBY suitable for value and 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
With a decent Return On Assets value of 6.25%, BBY is doing good in the industry, outperforming 76.42% of the companies in the same industry.
With an excellent Return On Equity value of 31.96%, BBY belongs to the best of the industry, outperforming 86.99% of the companies in the same industry.
BBY's Return On Invested Capital of 19.09% is amongst the best of the industry. BBY outperforms 87.80% 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 11.91%.
| 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
The Profit Margin of BBY (2.13%) is comparable to the rest of the industry.
In the last couple of years the Profit Margin of BBY has declined.
BBY's Operating Margin of 4.19% is fine compared to the rest of the industry. BBY outperforms 61.79% of its industry peers.
BBY's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 22.61%, BBY is doing worse than 75.61% of the companies in the same industry.
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 | 4.19% | ||
| 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), BBY is creating value.
The number of shares outstanding for BBY has been reduced compared to 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 an Altman-Z score of 4.38. This indicates that BBY is financially healthy and has little risk of bankruptcy at the moment.
BBY has a better Altman-Z score (4.38) than 82.93% of its industry peers.
The Debt to FCF ratio of BBY is 0.93, which is an excellent value as it means it would take BBY, only 0.93 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of BBY (0.93) is better than 82.11% of its industry peers.
BBY has a Debt/Equity ratio of 0.42. This is a healthy value indicating a solid balance between debt and equity.
BBY has a Debt to Equity ratio (0.42) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 0.93 | ||
| Altman-Z | 4.38 |
ROIC/WACC2.09
WACC9.12%
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 72.36% 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.
The Quick ratio of BBY (0.32) is worse than 66.67% of its industry peers.
| 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.
BBY shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.99% yearly.
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.
BBY is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.11% yearly.
EPS Next Y-2.4%
EPS Next 2Y2.83%
EPS Next 3Y5.26%
EPS Next 5Y13.16%
Revenue Next Year0.28%
Revenue Next 2Y0.99%
Revenue Next 3Y1.53%
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
BBY is valuated reasonably with a Price/Earnings ratio of 11.49.
Based on the Price/Earnings ratio, BBY is valued cheaply inside the industry as 82.93% of the companies are valued more expensively.
BBY is valuated cheaply when we compare the Price/Earnings ratio to 27.11, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 10.78, which indicates a very decent valuation of BBY.
BBY's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. BBY is cheaper than 78.86% of the companies in the same industry.
BBY's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 35.78.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.49 | ||
| Fwd PE | 10.78 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of BBY indicates a rather cheap valuation: BBY is cheaper than 80.49% of the companies listed in the same industry.
80.49% 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 | 12.24 | ||
| EV/EBITDA | 5.73 |
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)14.31
EPS Next 2Y2.83%
EPS Next 3Y5.26%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.63%, BBY is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 6.28, BBY pays a better dividend. On top of this BBY pays more dividend than 90.24% of the companies listed in the same industry.
BBY's Dividend Yield is rather good when compared to the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.63% |
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 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 2Y2.83%
EPS Next 3Y5.26%
72.73
+2.49 (+3.54%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners88.2%
Inst Owner Change-0.84%
Ins Owners0.32%
Ins Owner Change3.39%
Market Cap15.37B
Analysts68.13
Price Target79.31 (9.05%)
Short Float %7.64%
Short Ratio3.95
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.63% |
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)-0.45%
PT rev (3m)-10.65%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-8.55%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.03%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.31%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)-0.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.49 | ||
| Fwd PE | 10.78 | ||
| P/S | 0.37 | ||
| P/FCF | 12.24 | ||
| P/OCF | 7.78 | ||
| P/B | 5.56 | ||
| P/tB | 8.77 | ||
| EV/EBITDA | 5.73 |
EPS(TTM)6.33
EY8.7%
EPS(NY)6.75
Fwd EY9.28%
FCF(TTM)5.94
FCFY8.17%
OCF(TTM)9.35
OCFY12.85%
SpS196.11
BVpS13.07
TBVpS8.29
PEG (NY)N/A
PEG (5Y)14.31
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.25% | ||
| ROE | 31.96% | ||
| ROCE | 25.83% | ||
| ROIC | 19.09% | ||
| ROICexc | 23.02% | ||
| ROICexgc | 28.12% | ||
| OM | 4.19% | ||
| PM (TTM) | 2.13% | ||
| GM | 22.61% | ||
| FCFM | 3.03% |
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 | 0.93 | ||
| Debt/EBITDA | 0.44 | ||
| Cap/Depr | 83.92% | ||
| Cap/Sales | 1.74% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 76.21% | ||
| Profit Quality | 142.24% | ||
| Current Ratio | 1.02 | ||
| Quick Ratio | 0.32 | ||
| Altman-Z | 4.38 |
F-Score7
WACC9.12%
ROIC/WACC2.09
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-2.4%
EPS Next 2Y2.83%
EPS Next 3Y5.26%
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 Year0.28%
Revenue Next 2Y0.99%
Revenue Next 3Y1.53%
Revenue Next 5Y2.11%
EBIT growth 1Y-0.97%
EBIT growth 3Y-16.8%
EBIT growth 5Y-3.29%
EBIT Next Year51.54%
EBIT Next 3Y17.98%
EBIT Next 5Y11.58%
FCF growth 1Y-35.85%
FCF growth 3Y-17.9%
FCF growth 5Y-5.24%
OCF growth 1Y-31.32%
OCF growth 3Y-13.59%
OCF growth 5Y-3.94%