PENSKE AUTOMOTIVE GROUP INC (PAG) Stock Fundamental Analysis
NYSE:PAG - New York Stock Exchange, Inc. - US70959W1036 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to PAG. PAG was compared to 122 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 is valued correctly, 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.
Each year in the past 5 years PAG had a positive operating cash flow.
1.2 Ratios
PAG has a better Return On Assets (5.60%) than 71.31% of its industry peers.
PAG has a better Return On Equity (17.57%) than 75.41% of its industry peers.
PAG has a better Return On Invested Capital (6.85%) than 65.57% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PAG is below the industry average of 12.03%.
| 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
The Profit Margin of PAG (3.10%) is better than 69.67% of its industry peers.
PAG's Profit Margin has improved in the last couple of years.
PAG's Operating Margin of 4.26% is fine compared to the rest of the industry. PAG outperforms 62.30% 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 84.43% 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so PAG is destroying value.
PAG has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, PAG has less shares outstanding
Compared to 1 year ago, PAG has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.08 indicates that PAG is not in any danger for bankruptcy at the moment.
PAG's Altman-Z score of 3.08 is fine compared to the rest of the industry. PAG outperforms 69.67% 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.
Looking at the Debt to FCF ratio, with a value of 8.64, PAG is in line with its industry, outperforming 56.56% of the companies in the same industry.
PAG has a Debt/Equity ratio of 0.92. This is a neutral value indicating 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 | 3.08 |
ROIC/WACC0.77
WACC8.91%
2.3 Liquidity
PAG has a Current 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.
The Current ratio of PAG (0.90) is worse than 78.69% 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.
The Quick ratio of PAG (0.23) is worse than 83.61% 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.
PAG shows a small growth in Revenue. In the last year, the Revenue has grown by 3.29%.
PAG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.61% yearly.
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
The Earnings Per Share is expected to grow by 6.00% on average over the next years.
Based on estimates for the next years, PAG will show a small growth in Revenue. The Revenue will grow by 3.79% on average per year.
EPS Next Y1.73%
EPS Next 2Y2.71%
EPS Next 3Y2.14%
EPS Next 5Y6%
Revenue Next Year2.34%
Revenue Next 2Y3.15%
Revenue Next 3Y3.35%
Revenue Next 5Y3.79%
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.
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
The Price/Earnings ratio is 12.26, which indicates a correct valuation of PAG.
Compared to the rest of the industry, the Price/Earnings ratio of PAG indicates a rather cheap valuation: PAG is cheaper than 81.97% of the companies listed in the same industry.
PAG's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.35.
PAG is valuated reasonably with a Price/Forward Earnings ratio of 11.78.
PAG's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. PAG is cheaper than 77.05% of the companies in the same industry.
PAG's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 37.54.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.26 | ||
| Fwd PE | 11.78 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, PAG is valued a bit cheaper than the industry average as 63.93% 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 76.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.03 | ||
| EV/EBITDA | 8.96 |
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)7.08
PEG (5Y)0.59
EPS Next 2Y2.71%
EPS Next 3Y2.14%
5. Dividend
5.1 Amount
PAG has a Yearly Dividend Yield of 2.89%.
PAG's Dividend Yield is rather good when compared to the industry average which is at 5.06. PAG pays more dividend than 86.89% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, PAG pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.89% |
5.2 History
The dividend of PAG is nicely growing with an annual growth rate of 21.07%!
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
31.39% of the earnings are spent on dividend by PAG. This is a low number and sustainable payout ratio.
The dividend of PAG is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP31.39%
EPS Next 2Y2.71%
EPS Next 3Y2.14%
170.8
-2.48 (-1.43%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners76.73%
Inst Owner Change-0.4%
Ins Owners0.86%
Ins Owner Change-4.26%
Market Cap11.30B
Analysts72
Price Target175.83 (2.94%)
Short Float %2.55%
Short Ratio5.7
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.89% |
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)0.36%
PT rev (3m)-4.48%
EPS NQ rev (1m)-0.25%
EPS NQ rev (3m)3.35%
EPS NY rev (1m)0.57%
EPS NY rev (3m)0.66%
Revenue NQ rev (1m)-0.21%
Revenue NQ rev (3m)1.3%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)-0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.26 | ||
| Fwd PE | 11.78 | ||
| P/S | 0.37 | ||
| P/FCF | 17.03 | ||
| P/OCF | 11.23 | ||
| P/B | 2.09 | ||
| P/tB | 5.64 | ||
| EV/EBITDA | 8.96 |
EPS(TTM)13.93
EY8.16%
EPS(NY)14.5
Fwd EY8.49%
FCF(TTM)10.03
FCFY5.87%
OCF(TTM)15.21
OCFY8.91%
SpS462.63
BVpS81.53
TBVpS30.3
PEG (NY)7.08
PEG (5Y)0.59
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 | 3.08 |
F-Score5
WACC8.91%
ROIC/WACC0.77
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 Y1.73%
EPS Next 2Y2.71%
EPS Next 3Y2.14%
EPS Next 5Y6%
Revenue 1Y (TTM)3.29%
Revenue growth 3Y6.02%
Revenue growth 5Y5.61%
Sales Q2Q%2.1%
Revenue Next Year2.34%
Revenue Next 2Y3.15%
Revenue Next 3Y3.35%
Revenue Next 5Y3.79%
EBIT growth 1Y-3.09%
EBIT growth 3Y-0.98%
EBIT growth 5Y15.06%
EBIT Next Year18.91%
EBIT Next 3Y7.27%
EBIT Next 5Y3.47%
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%