PENSKE AUTOMOTIVE GROUP INC (PAG) Stock Fundamental Analysis
NYSE:PAG - New York Stock Exchange, Inc. - US70959W1036 - Common Stock - Currency: USD
Taking everything into account, PAG scores 5 out of 10 in our fundamental rating. PAG was compared to 124 industry peers in the Specialty Retail industry. PAG has a medium profitability rating, but doesn't score so well on its financial health evaluation. PAG has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
PAG had positive earnings in the past year.
In the past year PAG had a positive cash flow from operations.
PAG had positive earnings in each of the past 5 years.
PAG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 5.50%, PAG is doing good in the industry, outperforming 70.16% of the companies in the same industry.
PAG has a Return On Equity of 17.04%. This is in the better half of the industry: PAG outperforms 76.61% of its industry peers.
PAG has a better Return On Invested Capital (6.70%) than 65.32% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PAG is below the industry average of 11.91%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.5% | ||
| ROE | 17.04% | ||
| ROIC | 6.7% |
ROA(3y)7.33%
ROA(5y)6.98%
ROE(3y)24.4%
ROE(5y)23.77%
ROIC(3y)7.78%
ROIC(5y)7.29%
1.3 Margins
The Profit Margin of PAG (3.13%) is better than 69.35% of its industry peers.
In the last couple of years the Profit Margin of PAG has grown nicely.
The Operating Margin of PAG (4.30%) is better than 62.90% of its industry peers.
In the last couple of years the Operating Margin of PAG has grown nicely.
PAG has a worse Gross Margin (16.58%) than 83.87% of its industry peers.
PAG's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.3% | ||
| PM (TTM) | 3.13% | ||
| GM | 16.58% |
OM growth 3Y-6.61%
OM growth 5Y8.95%
PM growth 3Y-13.41%
PM growth 5Y9.91%
GM growth 3Y-1.79%
GM growth 5Y2%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), PAG is destroying value.
The number of shares outstanding for PAG has been reduced compared to 1 year ago.
Compared to 5 years ago, PAG has less shares outstanding
The debt/assets ratio for PAG is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.03 indicates that PAG is not in any danger for bankruptcy at the moment.
PAG has a better Altman-Z score (3.03) than 67.74% of its industry peers.
The Debt to FCF ratio of PAG is 9.30, which is on the high side as it means it would take PAG, 9.30 years of fcf income to pay off all of its debts.
PAG has a Debt to FCF ratio (9.30) which is in line with its industry peers.
A Debt/Equity ratio of 0.91 indicates that PAG is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.91, PAG perfoms like the industry average, outperforming 44.35% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.91 | ||
| Debt/FCF | 9.3 | ||
| Altman-Z | 3.03 |
ROIC/WACC0.76
WACC8.77%
2.3 Liquidity
A Current Ratio of 0.90 indicates that PAG may have some problems paying its short term obligations.
PAG has a worse Current ratio (0.90) than 78.23% of its industry peers.
PAG has a Quick Ratio of 0.90. This is a bad value and indicates that PAG is not financially healthy enough and could expect problems in meeting its short term obligations.
PAG's Quick ratio of 0.21 is on the low side compared to the rest of the industry. PAG is outperformed by 87.10% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.21 |
3. Growth
3.1 Past
The earnings per share for PAG have decreased by -0.63% in the last year.
Measured over the past years, PAG shows a very strong growth in Earnings Per Share. The EPS has been growing by 20.82% on average per year.
The Revenue has been growing slightly by 2.39% in the past year.
Measured over the past years, PAG shows a small growth in Revenue. The Revenue has been growing by 5.61% on average per year.
EPS 1Y (TTM)-0.63%
EPS 3Y-3.27%
EPS 5Y20.82%
EPS Q2Q%4.71%
Revenue 1Y (TTM)2.39%
Revenue growth 3Y6.02%
Revenue growth 5Y5.61%
Sales Q2Q%-0.45%
3.2 Future
PAG is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.96% yearly.
Based on estimates for the next years, PAG will show a small growth in Revenue. The Revenue will grow by 3.77% on average per year.
EPS Next Y1.73%
EPS Next 2Y2.71%
EPS Next 3Y2.14%
EPS Next 5Y5.96%
Revenue Next Year2.14%
Revenue Next 2Y2.87%
Revenue Next 3Y3.35%
Revenue Next 5Y3.77%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 12.79, PAG is valued correctly.
PAG's Price/Earnings ratio is rather cheap when compared to the industry. PAG is cheaper than 80.65% of the companies in the same industry.
PAG's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.87.
A Price/Forward Earnings ratio of 12.43 indicates a correct valuation of PAG.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PAG indicates a somewhat cheap valuation: PAG is cheaper than 73.39% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 35.34. PAG is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.79 | ||
| Fwd PE | 12.43 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PAG indicates a somewhat cheap valuation: PAG is cheaper than 64.52% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, PAG is valued a bit cheaper than the industry average as 73.39% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.45 | ||
| EV/EBITDA | 9.17 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PAG has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)7.39
PEG (5Y)0.61
EPS Next 2Y2.71%
EPS Next 3Y2.14%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.73%, PAG has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 5.92, PAG pays a better dividend. On top of this PAG pays more dividend than 85.48% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, PAG has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.73% |
5.2 History
On average, the dividend of PAG grows each year by 21.07%, which is quite nice.
PAG has paid a dividend for at least 10 years, which is a reliable track record.
PAG has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)21.07%
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
PAG pays out 33.11% of its income as dividend. This is a sustainable payout ratio.
PAG's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP33.11%
EPS Next 2Y2.71%
EPS Next 3Y2.14%
180.35
-2.71 (-1.48%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners76.68%
Inst Owner Change3.09%
Ins Owners0.85%
Ins Owner Change-4.09%
Market Cap11.93B
Analysts70
Price Target178.38 (-1.09%)
Short Float %2.44%
Short Ratio5.13
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.73% |
Yearly Dividend4.1
Dividend Growth(5Y)21.07%
DP33.11%
Div Incr Years4
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.88%
Min EPS beat(2)2.72%
Max EPS beat(2)5.05%
EPS beat(4)3
Avg EPS beat(4)3.17%
Min EPS beat(4)-1.64%
Max EPS beat(4)6.57%
EPS beat(8)4
Avg EPS beat(8)0.21%
EPS beat(12)8
Avg EPS beat(12)1.58%
EPS beat(16)12
Avg EPS beat(16)5.29%
Revenue beat(2)0
Avg Revenue beat(2)-3.17%
Min Revenue beat(2)-4.32%
Max Revenue beat(2)-2.03%
Revenue beat(4)1
Avg Revenue beat(4)-1.88%
Min Revenue beat(4)-4.32%
Max Revenue beat(4)0.87%
Revenue beat(8)3
Avg Revenue beat(8)-0.84%
Revenue beat(12)7
Avg Revenue beat(12)0.66%
Revenue beat(16)10
Avg Revenue beat(16)0.98%
PT rev (1m)0.56%
PT rev (3m)2.67%
EPS NQ rev (1m)-0.61%
EPS NQ rev (3m)0.31%
EPS NY rev (1m)0%
EPS NY rev (3m)1.5%
Revenue NQ rev (1m)-1.32%
Revenue NQ rev (3m)-1.48%
Revenue NY rev (1m)-0.2%
Revenue NY rev (3m)-0.98%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.79 | ||
| Fwd PE | 12.43 | ||
| P/S | 0.39 | ||
| P/FCF | 18.45 | ||
| P/OCF | 12.42 | ||
| P/B | 2.13 | ||
| P/tB | 5.54 | ||
| EV/EBITDA | 9.17 |
EPS(TTM)14.1
EY7.82%
EPS(NY)14.5
Fwd EY8.04%
FCF(TTM)9.77
FCFY5.42%
OCF(TTM)14.52
OCFY8.05%
SpS462.11
BVpS84.84
TBVpS32.54
PEG (NY)7.39
PEG (5Y)0.61
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.5% | ||
| ROE | 17.04% | ||
| ROCE | 12.64% | ||
| ROIC | 6.7% | ||
| ROICexc | 6.77% | ||
| ROICexgc | 8.9% | ||
| OM | 4.3% | ||
| PM (TTM) | 3.13% | ||
| GM | 16.58% | ||
| FCFM | 2.11% |
ROA(3y)7.33%
ROA(5y)6.98%
ROE(3y)24.4%
ROE(5y)23.77%
ROIC(3y)7.78%
ROIC(5y)7.29%
ROICexc(3y)7.84%
ROICexc(5y)7.34%
ROICexgc(3y)10.17%
ROICexgc(5y)9.53%
ROCE(3y)14.2%
ROCE(5y)13.12%
ROICexcg growth 3Y-7.25%
ROICexcg growth 5Y13.31%
ROICexc growth 3Y-7.29%
ROICexc growth 5Y12.13%
OM growth 3Y-6.61%
OM growth 5Y8.95%
PM growth 3Y-13.41%
PM growth 5Y9.91%
GM growth 3Y-1.79%
GM growth 5Y2%
F-Score7
Asset Turnover1.76
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.91 | ||
| Debt/FCF | 9.3 | ||
| Debt/EBITDA | 3.47 | ||
| Cap/Depr | 192.18% | ||
| Cap/Sales | 1.03% | ||
| Interest Coverage | 4.77 | ||
| Cash Conversion | 65.01% | ||
| Profit Quality | 67.59% | ||
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.21 | ||
| Altman-Z | 3.03 |
F-Score7
WACC8.77%
ROIC/WACC0.76
Cap/Depr(3y)240.48%
Cap/Depr(5y)217.45%
Cap/Sales(3y)1.17%
Cap/Sales(5y)1.08%
Profit Quality(3y)80.57%
Profit Quality(5y)103.28%
High Growth Momentum
Growth
EPS 1Y (TTM)-0.63%
EPS 3Y-3.27%
EPS 5Y20.82%
EPS Q2Q%4.71%
EPS Next Y1.73%
EPS Next 2Y2.71%
EPS Next 3Y2.14%
EPS Next 5Y5.96%
Revenue 1Y (TTM)2.39%
Revenue growth 3Y6.02%
Revenue growth 5Y5.61%
Sales Q2Q%-0.45%
Revenue Next Year2.14%
Revenue Next 2Y2.87%
Revenue Next 3Y3.35%
Revenue Next 5Y3.77%
EBIT growth 1Y0.87%
EBIT growth 3Y-0.98%
EBIT growth 5Y15.06%
EBIT Next Year19.14%
EBIT Next 3Y4.67%
EBIT Next 5Y3.46%
FCF growth 1Y-24.31%
FCF growth 3Y-8.08%
FCF growth 5Y24.3%
OCF growth 1Y-18.85%
OCF growth 3Y-3.02%
OCF growth 5Y17.87%