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%)
We assign a fundamental rating of 5 out of 10 to BBY. BBY was compared to 122 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 cheap, but on the other hand it scores bad on growth. Finally BBY also has an excellent dividend rating. This makes BBY very considerable for value and dividend investing!
1. Profitability
1.1 Basic Checks
- BBY had positive earnings in the past year.
- BBY had a positive operating cash flow in the past year.
- Each year in the past 5 years BBY has been profitable.
- BBY had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- BBY's Return On Assets of 3.84% is fine compared to the rest of the industry. BBY outperforms 63.11% of its industry peers.
- BBY's Return On Equity of 24.31% is amongst the best of the industry. BBY outperforms 82.79% of its industry peers.
- With an excellent Return On Invested Capital value of 19.29%, BBY belongs to the best of the industry, outperforming 87.70% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for BBY 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
- The Profit Margin of BBY (1.54%) is comparable to the rest of the industry.
- In the last couple of years the Profit Margin of BBY has declined.
- With a decent Operating Margin value of 4.16%, BBY is doing good in the industry, outperforming 60.66% of the companies in the same industry.
- BBY's Operating Margin has declined in the last couple of years.
- With a Gross Margin value of 22.50%, BBY is not doing good in the industry: 77.87% of the companies in the same industry are doing better.
- BBY's Gross Margin has been stable in the last couple of years.
| 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
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), BBY is creating value.
- BBY has less shares outstanding than it did 1 year ago.
- BBY has less shares outstanding than it did 5 years ago.
- Compared to 1 year ago, BBY has a worse debt to assets ratio.
2.2 Solvency
- The Debt to FCF ratio of BBY is 0.77, which is an excellent value as it means it would take BBY, only 0.77 years of fcf income to pay off all of its debts.
- BBY's Debt to FCF ratio of 0.77 is amongst the best of the industry. BBY outperforms 81.15% 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.
- With a Debt to Equity ratio value of 0.44, BBY perfoms like the industry average, outperforming 56.56% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | 0.77 | ||
| Altman-Z | N/A |
ROIC/WACC2.03
WACC9.49%
2.3 Liquidity
- BBY has a Current Ratio of 1.05. This is a normal value and indicates that BBY is financially healthy and should not expect problems in meeting its short term obligations.
- BBY has a worse Current ratio (1.05) than 72.13% of its industry peers.
- A Quick Ratio of 0.26 indicates that BBY may have some problems paying its short term obligations.
- The Quick ratio of BBY (0.26) is worse than 82.79% 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.
- BBY shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 0.80% yearly.
- Looking at the last year, BBY shows a decrease in Revenue. The Revenue has decreased by -0.95% in the last year.
- BBY shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.99% yearly.
EPS 1Y (TTM)-1.69%
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
- The Earnings Per Share is expected to grow by 9.95% on average over the next years. This is quite good.
- The Revenue is expected to grow by 2.25% on average over the next years.
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.
- 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 10.46.
- Based on the Price/Earnings ratio, BBY is valued cheaply inside the industry as 84.43% of the companies are valued more expensively.
- Compared to an average S&P500 Price/Earnings ratio of 27.21, BBY is valued rather cheaply.
- Based on the Price/Forward Earnings ratio of 9.86, the valuation of BBY can be described as reasonable.
- Based on the Price/Forward Earnings ratio, BBY is valued cheaper than 85.25% 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 25.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.46 | ||
| Fwd PE | 9.86 |
4.2 Price Multiples
- BBY's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. BBY is cheaper than 86.89% of the companies in the same industry.
- BBY's Price/Free Cash Flow ratio is rather cheap when compared to the industry. BBY is cheaper than 86.89% of the companies in the same industry.
| 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 an expensive valuation of the company.
- 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 95.08% of the companies in the same industry.
- BBY's Dividend Yield is rather good when compared to the S&P500 average which is at 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.67% |
5.2 History
- On average, the dividend of BBY grows each year by 13.38%, 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)13.38%
Div Incr Years14
Div Non Decr Years14
5.3 Sustainability
- 124.34% of the earnings are spent on dividend by BBY. 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.
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%.