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 120 industry peers in the Specialty Retail industry. There are concerns on the financial health of PAG while its profitability can be described as average. PAG has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year PAG was profitable.
In the past year PAG had a positive cash flow from operations.
In the past 5 years PAG has always been profitable.
In the past 5 years PAG always reported a positive cash flow from operatings.
1.2 Ratios
PAG has a better Return On Assets (5.60%) than 70.00% of its industry peers.
With a decent Return On Equity value of 17.57%, PAG is doing good in the industry, outperforming 74.17% of the companies in the same industry.
PAG has a Return On Invested Capital of 6.85%. This is in the better half of the industry: PAG outperforms 64.17% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PAG is significantly below the industry average of 13.01%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.6% | ||
| ROE | 17.57% | ||
| ROIC | 6.85% |
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
PAG has a better Profit Margin (3.10%) than 69.17% of its industry peers.
In the last couple of years the Profit Margin of PAG has grown nicely.
PAG has a better Operating Margin (4.26%) than 61.67% of its industry peers.
PAG's Operating Margin has improved in the last couple of years.
PAG has a worse Gross Margin (16.45%) than 85.00% of its industry peers.
In the last couple of years the Gross Margin of PAG has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.26% | ||
| PM (TTM) | 3.1% | ||
| GM | 16.45% |
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
PAG has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, PAG has less shares outstanding
The number of shares outstanding for PAG has been reduced compared to 5 years ago.
The debt/assets ratio for PAG is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.05 indicates that PAG is not in any danger for bankruptcy at the moment.
PAG's Altman-Z score of 3.05 is fine compared to the rest of the industry. PAG outperforms 71.67% of its industry peers.
The Debt to FCF ratio of PAG is 8.64, which is on the high side as it means it would take PAG, 8.64 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of PAG (8.64) is comparable to the rest of the industry.
A Debt/Equity ratio of 0.92 indicates that PAG is somewhat dependend on debt financing.
The Debt to Equity ratio of PAG (0.92) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.92 | ||
| Debt/FCF | 8.64 | ||
| Altman-Z | 3.05 |
ROIC/WACC0.76
WACC9%
2.3 Liquidity
A Current Ratio of 0.90 indicates that PAG may have some problems paying its short term obligations.
PAG's Current ratio of 0.90 is on the low side compared to the rest of the industry. PAG is outperformed by 79.17% 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 has a Quick ratio of 0.23. This is amonst the worse of the industry: PAG underperforms 84.17% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.23 |
3. Growth
3.1 Past
The earnings per share for PAG have decreased by -7.07% 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.
Looking at the last year, PAG shows a small growth in Revenue. The Revenue has grown by 3.29% in the last 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)-7.07%
EPS 3Y-3.27%
EPS 5Y20.82%
EPS Q2Q%5.61%
Revenue 1Y (TTM)3.29%
Revenue growth 3Y6.02%
Revenue growth 5Y5.61%
Sales Q2Q%2.1%
3.2 Future
Based on estimates for the next years, PAG will show a small growth in Earnings Per Share. The EPS will grow by 6.13% on average per year.
Based on estimates for the next years, PAG will show a small growth in Revenue. The Revenue will grow by 4.25% on average per year.
EPS Next Y0.22%
EPS Next 2Y2.27%
EPS Next 3Y2.14%
EPS Next 5Y6.13%
Revenue Next Year3.15%
Revenue Next 2Y3.66%
Revenue Next 3Y3.2%
Revenue Next 5Y4.25%
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 decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 11.79 indicates a reasonable valuation of PAG.
80.00% of the companies in the same industry are more expensive than PAG, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of PAG to the average of the S&P500 Index (26.25), we can say PAG is valued rather cheaply.
With a Price/Forward Earnings ratio of 11.42, the valuation of PAG can be described as very reasonable.
Based on the Price/Forward Earnings ratio, PAG is valued a bit cheaper than 75.83% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.15. PAG is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.79 | ||
| Fwd PE | 11.42 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, PAG is valued a bit cheaper than the industry average as 60.83% of the companies are valued more expensively.
PAG's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. PAG is cheaper than 74.17% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.37 | ||
| EV/EBITDA | 8.46 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates PAG does not grow enough to justify the current Price/Earnings ratio.
PAG has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)52.73
PEG (5Y)0.57
EPS Next 2Y2.27%
EPS Next 3Y2.14%
5. Dividend
5.1 Amount
PAG has a Yearly Dividend Yield of 2.92%.
PAG's Dividend Yield is rather good when compared to the industry average which is at 5.08. PAG pays more dividend than 87.50% of the companies in the same industry.
PAG's Dividend Yield is a higher than the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.92% |
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 31.39% 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.
DP31.39%
EPS Next 2Y2.27%
EPS Next 3Y2.14%
164.18
+1.87 (+1.15%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners75.67%
Inst Owner Change1.79%
Ins Owners1.13%
Ins Owner Change1.78%
Market Cap10.86B
Analysts72
Price Target173.74 (5.82%)
Short Float %2.16%
Short Ratio4.17
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.92% |
Yearly Dividend4.1
Dividend Growth(5Y)21.07%
DP31.39%
Div Incr Years4
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.65%
Min EPS beat(2)2.72%
Max EPS beat(2)6.57%
EPS beat(4)3
Avg EPS beat(4)3.3%
Min EPS beat(4)-1.64%
Max EPS beat(4)6.57%
EPS beat(8)4
Avg EPS beat(8)0.1%
EPS beat(12)8
Avg EPS beat(12)1.93%
EPS beat(16)12
Avg EPS beat(16)8.22%
Revenue beat(2)1
Avg Revenue beat(2)-0.58%
Min Revenue beat(2)-2.03%
Max Revenue beat(2)0.87%
Revenue beat(4)2
Avg Revenue beat(4)-0.65%
Min Revenue beat(4)-2.04%
Max Revenue beat(4)0.87%
Revenue beat(8)4
Avg Revenue beat(8)0.04%
Revenue beat(12)7
Avg Revenue beat(12)0.82%
Revenue beat(16)11
Avg Revenue beat(16)1.83%
PT rev (1m)-5.61%
PT rev (3m)-4.86%
EPS NQ rev (1m)3.61%
EPS NQ rev (3m)2.09%
EPS NY rev (1m)-0.83%
EPS NY rev (3m)-2.31%
Revenue NQ rev (1m)1.52%
Revenue NQ rev (3m)2.41%
Revenue NY rev (1m)0.72%
Revenue NY rev (3m)0.56%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.79 | ||
| Fwd PE | 11.42 | ||
| P/S | 0.35 | ||
| P/FCF | 16.37 | ||
| P/OCF | 10.79 | ||
| P/B | 2.01 | ||
| P/tB | 5.42 | ||
| EV/EBITDA | 8.46 |
EPS(TTM)13.93
EY8.48%
EPS(NY)14.38
Fwd EY8.76%
FCF(TTM)10.03
FCFY6.11%
OCF(TTM)15.21
OCFY9.26%
SpS462.63
BVpS81.53
TBVpS30.3
PEG (NY)52.73
PEG (5Y)0.57
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.6% | ||
| ROE | 17.57% | ||
| ROCE | 12.75% | ||
| ROIC | 6.85% | ||
| ROICexc | 6.91% | ||
| ROICexgc | 9.1% | ||
| OM | 4.26% | ||
| PM (TTM) | 3.1% | ||
| GM | 16.45% | ||
| FCFM | 2.17% |
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-Score5
Asset Turnover1.81
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.92 | ||
| Debt/FCF | 8.64 | ||
| Debt/EBITDA | 3.38 | ||
| Cap/Depr | 214.12% | ||
| Cap/Sales | 1.12% | ||
| Interest Coverage | 4.79 | ||
| Cash Conversion | 68.71% | ||
| Profit Quality | 70.01% | ||
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.23 | ||
| Altman-Z | 3.05 |
F-Score5
WACC9%
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)-7.07%
EPS 3Y-3.27%
EPS 5Y20.82%
EPS Q2Q%5.61%
EPS Next Y0.22%
EPS Next 2Y2.27%
EPS Next 3Y2.14%
EPS Next 5Y6.13%
Revenue 1Y (TTM)3.29%
Revenue growth 3Y6.02%
Revenue growth 5Y5.61%
Sales Q2Q%2.1%
Revenue Next Year3.15%
Revenue Next 2Y3.66%
Revenue Next 3Y3.2%
Revenue Next 5Y4.25%
EBIT growth 1Y-3.09%
EBIT growth 3Y-0.98%
EBIT growth 5Y15.06%
EBIT Next Year18.91%
EBIT Next 3Y7.27%
EBIT Next 5Y3.93%
FCF growth 1Y-37.44%
FCF growth 3Y-8.08%
FCF growth 5Y24.3%
OCF growth 1Y-27.57%
OCF growth 3Y-3.02%
OCF growth 5Y17.87%