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 121 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. Finally BBY also has an excellent dividend rating. With these ratings, BBY could be worth investigating further 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.
BBY had positive earnings in each of the past 5 years.
BBY had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
BBY has a better Return On Assets (6.25%) than 75.21% of its industry peers.
The Return On Equity of BBY (31.96%) is better than 87.60% of its industry peers.
BBY has a Return On Invested Capital of 19.09%. This is amongst the best in the industry. BBY outperforms 87.60% of its industry peers.
The Average Return On Invested Capital over the past 3 years for BBY is significantly above the industry average of 13.07%.
| 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.
In the last couple of years the Profit Margin of BBY has declined.
BBY has a Operating Margin of 4.19%. This is in the better half of the industry: BBY outperforms 61.16% of its industry peers.
In the last couple of years the Operating Margin of BBY has declined.
BBY has a worse Gross Margin (22.61%) than 76.03% 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 | 4.19% | ||
| 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
Compared to 5 years ago, BBY has less shares outstanding
Compared to 1 year ago, BBY has a worse debt to assets ratio.
2.2 Solvency
BBY has an Altman-Z score of 4.40. This indicates that BBY is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.40, BBY belongs to the top of the industry, outperforming 85.12% of the companies in the same industry.
BBY has a debt to FCF ratio of 0.93. This is a very positive value and a sign of high solvency as it would only need 0.93 years to pay back of all of its debts.
BBY has a Debt to FCF ratio of 0.93. This is amongst the best in the industry. BBY outperforms 82.64% 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.
With a Debt to Equity ratio value of 0.42, BBY perfoms like the industry average, outperforming 53.72% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 0.93 | ||
| Altman-Z | 4.4 |
ROIC/WACC2.06
WACC9.26%
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 has a Current ratio of 1.02. This is in the lower half of the industry: BBY underperforms 71.90% of its industry peers.
A Quick Ratio of 0.32 indicates that BBY may have some problems paying its short term obligations.
BBY's Quick ratio of 0.32 is on the low side compared to the rest of the industry. BBY is outperformed by 68.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.02 | ||
| Quick Ratio | 0.32 |
3. Growth
3.1 Past
BBY shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -1.56%.
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 -3.23% 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)-1.56%
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-2.31%
EPS Next 2Y2.85%
EPS Next 3Y5.49%
EPS Next 5Y13.16%
Revenue Next Year0.27%
Revenue Next 2Y1.01%
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.
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
With a Price/Earnings ratio of 11.39, the valuation of BBY can be described as very reasonable.
Based on the Price/Earnings ratio, BBY is valued cheaper than 84.30% 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 27.45.
With a Price/Forward Earnings ratio of 10.68, the valuation of BBY can be described as very reasonable.
BBY's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. BBY is cheaper than 77.69% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.90, BBY is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.39 | ||
| Fwd PE | 10.68 |
4.2 Price Multiples
BBY's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. BBY is cheaper than 80.17% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, BBY is valued cheaper than 80.17% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.15 | ||
| EV/EBITDA | 5.89 |
4.3 Compensation for Growth
The decent profitability rating of BBY may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)14.19
EPS Next 2Y2.85%
EPS Next 3Y5.49%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.55%, BBY is a good candidate for dividend investing.
BBY's Dividend Yield is rather good when compared to the industry average which is at 5.27. BBY pays more dividend than 92.56% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, BBY pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.55% |
5.2 History
The dividend of BBY is nicely growing with an annual growth rate of 13.37%!
BBY has paid a dividend for at least 10 years, which is a reliable track record.
BBY has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)13.37%
Div Incr Years14
Div Non Decr Years14
5.3 Sustainability
91.39% 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.
DP91.39%
EPS Next 2Y2.85%
EPS Next 3Y5.49%
72.1
+0.51 (+0.71%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners88.31%
Inst Owner Change0.52%
Ins Owners0.32%
Ins Owner Change3.39%
Market Cap15.26B
Analysts68.75
Price Target79.67 (10.5%)
Short Float %6.74%
Short Ratio3.53
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.55% |
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)-10.25%
PT rev (3m)-12.76%
EPS NQ rev (1m)-8.57%
EPS NQ rev (3m)-9.71%
EPS NY rev (1m)0.07%
EPS NY rev (3m)-2.29%
Revenue NQ rev (1m)-0.31%
Revenue NQ rev (3m)-0.8%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.39 | ||
| Fwd PE | 10.68 | ||
| P/S | 0.37 | ||
| P/FCF | 12.15 | ||
| P/OCF | 7.72 | ||
| P/B | 5.52 | ||
| P/tB | 8.71 | ||
| EV/EBITDA | 5.89 |
EPS(TTM)6.33
EY8.78%
EPS(NY)6.75
Fwd EY9.36%
FCF(TTM)5.93
FCFY8.23%
OCF(TTM)9.33
OCFY12.95%
SpS195.8
BVpS13.05
TBVpS8.28
PEG (NY)N/A
PEG (5Y)14.19
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 | 4.4 |
F-Score7
WACC9.26%
ROIC/WACC2.06
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-2.31%
EPS Next 2Y2.85%
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 Year0.27%
Revenue Next 2Y1.01%
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 Year52.93%
EBIT Next 3Y18.12%
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%