BEST BUY CO INC (BBY)
US0865161014 - Common Stock
Taking everything into account, BBY scores 6 out of 10 in our fundamental rating. BBY was compared to 126 industry peers in the Specialty Retail industry. While BBY has a great profitability rating, there are some minor concerns on its financial health. BBY is not valued too expensively and it also shows a decent growth rate. BBY also has an excellent dividend rating. This makes BBY very considerable for 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.
BBY had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
BBY's Return On Assets of 8.29% is fine compared to the rest of the industry. BBY outperforms 76.19% of its industry peers.
Looking at the Return On Equity, with a value of 40.65%, BBY belongs to the top of the industry, outperforming 89.68% of the companies in the same industry.
BBY's Return On Invested Capital of 19.06% is amongst the best of the industry. BBY outperforms 88.89% of its industry peers.
The Average Return On Invested Capital over the past 3 years for BBY is significantly above the industry average of 13.85%.
The 3 year average ROIC (25.19%) for BBY is well above the current ROIC(19.06%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.29% | ||
| ROE | 40.65% | ||
| ROIC | 19.06% |
ROA(3y)10.43%
ROA(5y)10.12%
ROE(3y)57.56%
ROE(5y)51.23%
ROIC(3y)25.19%
ROIC(5y)24.01%
1.3 Margins
BBY's Profit Margin of 2.86% is fine compared to the rest of the industry. BBY outperforms 62.70% of its industry peers.
BBY's Profit Margin has declined in the last couple of years.
The Operating Margin of BBY (3.97%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of BBY has declined.
Looking at the Gross Margin, with a value of 22.10%, BBY is doing worse than 77.78% of the companies in the same industry.
BBY's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.97% | ||
| PM (TTM) | 2.86% | ||
| GM | 22.1% |
OM growth 3Y-10.12%
OM growth 5Y-2.87%
PM growth 3Y-9.11%
PM growth 5Y-3.51%
GM growth 3Y-0.48%
GM growth 5Y-0.99%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so BBY is creating value.
The number of shares outstanding for BBY has been reduced compared to 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
An Altman-Z score of 4.34 indicates that BBY is not in any danger for bankruptcy at the moment.
BBY has a better Altman-Z score (4.34) than 88.89% of its industry peers.
BBY has a debt to FCF ratio of 1.73. This is a very positive value and a sign of high solvency as it would only need 1.73 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 1.73, BBY is doing good in the industry, outperforming 73.02% of the companies in the same industry.
A Debt/Equity ratio of 0.38 indicates that BBY is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.38, BBY perfoms like the industry average, outperforming 53.97% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | 1.73 | ||
| Altman-Z | 4.34 |
ROIC/WACC2.12
WACC8.98%
2.3 Liquidity
BBY has a Current Ratio of 1.00. This is a bad value and indicates that BBY is not financially healthy enough and could expect problems in meeting its short term obligations.
BBY has a Current ratio of 1.00. This is amonst the worse of the industry: BBY underperforms 81.75% of its industry peers.
A Quick Ratio of 0.37 indicates that BBY may have some problems paying its short term obligations.
With a Quick ratio value of 0.37, BBY is not doing good in the industry: 69.05% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1 | ||
| Quick Ratio | 0.37 |
3. Growth
3.1 Past
BBY shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -10.14%.
The Earnings Per Share has been growing slightly by 3.47% on average over the past years.
BBY shows a decrease in Revenue. In the last year, the revenue decreased by -6.15%.
The Revenue has been growing slightly by 0.27% on average over the past years.
EPS 1Y (TTM)-10.14%
EPS 3Y-6.95%
EPS 5Y3.47%
EPS growth Q2Q4.21%
Revenue 1Y (TTM)-6.15%
Revenue growth 3Y-2.76%
Revenue growth 5Y0.27%
Revenue growth Q2Q-0.6%
3.2 Future
Based on estimates for the next years, BBY will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.90% on average per year.
BBY is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.84% yearly.
EPS Next Y-4.44%
EPS Next 2Y3.24%
EPS Next 3Y6.81%
EPS Next 5Y13.9%
Revenue Next Year-3.1%
Revenue Next 2Y-0.55%
Revenue Next 3Y0.63%
Revenue Next 5Y1.84%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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 11.79, the valuation of BBY can be described as very reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of BBY indicates a somewhat cheap valuation: BBY is cheaper than 79.37% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of BBY to the average of the S&P500 Index (25.25), we can say BBY is valued rather cheaply.
With a Price/Forward Earnings ratio of 12.34, BBY is valued correctly.
77.78% of the companies in the same industry are more expensive than BBY, based on the Price/Forward Earnings ratio.
BBY is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.67, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.79 | ||
| Fwd PE | 12.34 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, BBY is valued a bit cheaper than the industry average as 75.40% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of BBY is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.01 | ||
| EV/EBITDA | 5.94 |
4.3 Compensation for Growth
The decent profitability rating of BBY may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)3.4
EPS Next 2Y3.24%
EPS Next 3Y6.81%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.95%, BBY is a good candidate for dividend investing.
BBY's Dividend Yield is rather good when compared to the industry average which is at 3.51. BBY pays more dividend than 96.03% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.45, BBY pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.95% |
5.2 History
On average, the dividend of BBY grows each year by 15.34%, which is quite nice.
BBY has been paying a dividend for at least 10 years, so it has a reliable track record.
As BBY did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)15.34%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
64.54% 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.
DP64.54%
EPS Next 2Y3.24%
EPS Next 3Y6.81%
BEST BUY CO INC
NYSE:BBY (4/25/2024, 3:37:45 PM)
After market: 75.24 0 (0%)75.24
+0.81 (+1.09%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap16.21B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.95% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
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Min EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.79 | ||
| Fwd PE | 12.34 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)3.4
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.29% | ||
| ROE | 40.65% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 3.97% | ||
| PM (TTM) | 2.86% | ||
| GM | 22.1% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover2.9
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1 | ||
| Quick Ratio | 0.37 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-10.14%
EPS 3Y-6.95%
EPS 5Y
EPS growth Q2Q
EPS Next Y-4.44%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-6.15%
Revenue growth 3Y-2.76%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y