PHILLIPS EDISON & COMPANY IN (PECO) Stock Fundamental Analysis
NASDAQ:PECO - Nasdaq - US71844V2016 - REIT - Currency: USD
PECO gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 129 industry peers in the Diversified REITs industry. While PECO has a great profitability rating, there are quite some concerns on its financial health. PECO is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year PECO was profitable.
PECO had a positive operating cash flow in the past year.
PECO had positive earnings in each of the past 5 years.
PECO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
PECO has a Return On Assets of 1.38%. This is in the better half of the industry: PECO outperforms 60.47% of its industry peers.
Looking at the Return On Equity, with a value of 3.09%, PECO is in line with its industry, outperforming 58.91% of the companies in the same industry.
PECO has a Return On Invested Capital (2.79%) which is in line with its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PECO is in line with the industry average of 3.15%.
The 3 year average ROIC (2.51%) for PECO is below the current ROIC(2.79%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.38% | ||
| ROE | 3.09% | ||
| ROIC | 2.79% |
ROA(3y)1.14%
ROA(5y)0.77%
ROE(3y)2.44%
ROE(5y)1.66%
ROIC(3y)2.51%
ROIC(5y)2.07%
1.3 Margins
PECO has a better Profit Margin (10.51%) than 61.24% of its industry peers.
In the last couple of years the Profit Margin of PECO has grown nicely.
With a Operating Margin value of 26.19%, PECO perfoms like the industry average, outperforming 57.36% of the companies in the same industry.
PECO's Operating Margin has improved in the last couple of years.
PECO has a better Gross Margin (71.12%) than 63.57% of its industry peers.
PECO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.19% | ||
| PM (TTM) | 10.51% | ||
| GM | 71.12% |
OM growth 3Y23.39%
OM growth 5Y7%
PM growth 3Y49.54%
PM growth 5YN/A
GM growth 3Y0.43%
GM growth 5Y0.35%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so PECO is destroying value.
PECO has more shares outstanding than it did 1 year ago.
The number of shares outstanding for PECO has been increased compared to 5 years ago.
PECO has a worse debt/assets ratio than last year.
2.2 Solvency
PECO has an Altman-Z score of 0.75. This is a bad value and indicates that PECO is not financially healthy and even has some risk of bankruptcy.
PECO has a better Altman-Z score (0.75) than 64.34% of its industry peers.
PECO has a debt to FCF ratio of 10.19. This is a negative value and a sign of low solvency as PECO would need 10.19 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 10.19, PECO belongs to the best of the industry, outperforming 91.47% of the companies in the same industry.
A Debt/Equity ratio of 0.99 indicates that PECO is somewhat dependend on debt financing.
PECO has a Debt to Equity ratio (0.99) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.99 | ||
| Debt/FCF | 10.19 | ||
| Altman-Z | 0.75 |
ROIC/WACC0.39
WACC7.17%
2.3 Liquidity
PECO has a Current Ratio of 0.15. This is a bad value and indicates that PECO is not financially healthy enough and could expect problems in meeting its short term obligations.
PECO's Current ratio of 0.15 is on the low side compared to the rest of the industry. PECO is outperformed by 92.25% of its industry peers.
PECO has a Quick Ratio of 0.15. This is a bad value and indicates that PECO is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.15, PECO is not doing good in the industry: 91.47% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.15 | ||
| Quick Ratio | 0.15 |
3. Growth
3.1 Past
PECO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 16.33%, which is quite good.
PECO shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 55.36% yearly.
The Revenue has grown by 9.36% in the past year. This is quite good.
The Revenue has been growing slightly by 4.27% on average over the past years.
EPS 1Y (TTM)16.33%
EPS 3Y55.36%
EPS 5YN/A
EPS Q2Q%50%
Revenue 1Y (TTM)9.36%
Revenue growth 3Y7.47%
Revenue growth 5Y4.27%
Sales Q2Q%10.54%
3.2 Future
The Earnings Per Share is expected to grow by 15.74% on average over the next years. This is quite good.
The Revenue is expected to grow by 8.15% on average over the next years. This is quite good.
EPS Next Y22.4%
EPS Next 2Y14.71%
EPS Next 3Y15.74%
EPS Next 5YN/A
Revenue Next Year9.62%
Revenue Next 2Y8.08%
Revenue Next 3Y8.15%
Revenue Next 5YN/A
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past 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
A Price/Earnings ratio of 61.23 indicates a quite expensive valuation of PECO.
Compared to the rest of the industry, the Price/Earnings ratio of PECO is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 26.35. PECO is valued rather expensively when compared to this.
The Price/Forward Earnings ratio is 53.05, which means the current valuation is very expensive for PECO.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PECO is on the same level as its industry peers.
The average S&P500 Price/Forward Earnings ratio is at 22.20. PECO is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 61.23 | ||
| Fwd PE | 53.05 |
4.2 Price Multiples
PECO's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. PECO is more expensive than 60.47% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PECO indicates a somewhat cheap valuation: PECO is cheaper than 77.52% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.57 | ||
| EV/EBITDA | 14.98 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates PECO does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of PECO may justify a higher PE ratio.
A more expensive valuation may be justified as PECO's earnings are expected to grow with 15.74% in the coming years.
PEG (NY)2.73
PEG (5Y)N/A
EPS Next 2Y14.71%
EPS Next 3Y15.74%
5. Dividend
5.1 Amount
PECO has a Yearly Dividend Yield of 3.58%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 6.93, PECO is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.40, PECO pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.58% |
5.2 History
The dividend of PECO decreases each year by -3.54%.
PECO has been paying a dividend for over 5 years, so it has already some track record.
PECO has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)-3.54%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
209.73% of the earnings are spent on dividend by PECO. This is not a sustainable payout ratio.
DP209.73%
EPS Next 2Y14.71%
EPS Next 3Y15.74%
34.9
+0.96 (+2.83%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryDiversified REITs
Earnings (Last)
Earnings (Next)
Inst Owners85.72%
Inst Owner Change2.26%
Ins Owners0.54%
Ins Owner Change4.52%
Market Cap4.38B
Analysts76.47
Price Target40.46 (15.93%)
Short Float %3.24%
Short Ratio4.69
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.58% |
Yearly Dividend1.08
Dividend Growth(5Y)-3.54%
DP209.73%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)30.62%
Min EPS beat(2)20.87%
Max EPS beat(2)40.37%
EPS beat(4)2
Avg EPS beat(4)3.04%
Min EPS beat(4)-36.21%
Max EPS beat(4)40.37%
EPS beat(8)6
Avg EPS beat(8)5.86%
EPS beat(12)10
Avg EPS beat(12)12.99%
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)2
Avg Revenue beat(2)1.78%
Min Revenue beat(2)0.95%
Max Revenue beat(2)2.6%
Revenue beat(4)2
Avg Revenue beat(4)0.22%
Min Revenue beat(4)-2.27%
Max Revenue beat(4)2.6%
Revenue beat(8)4
Avg Revenue beat(8)0.04%
Revenue beat(12)8
Avg Revenue beat(12)0.63%
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)-1.38%
PT rev (3m)-1.38%
EPS NQ rev (1m)-6.96%
EPS NQ rev (3m)-1.43%
EPS NY rev (1m)0.28%
EPS NY rev (3m)4.35%
Revenue NQ rev (1m)1.59%
Revenue NQ rev (3m)0.76%
Revenue NY rev (1m)1.37%
Revenue NY rev (3m)1.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 61.23 | ||
| Fwd PE | 53.05 | ||
| P/S | 6.45 | ||
| P/FCF | 19.57 | ||
| P/OCF | 13.18 | ||
| P/B | 1.89 | ||
| P/tB | 1.92 | ||
| EV/EBITDA | 14.98 |
EPS(TTM)0.57
EY1.63%
EPS(NY)0.66
Fwd EY1.89%
FCF(TTM)1.78
FCFY5.11%
OCF(TTM)2.65
OCFY7.59%
SpS5.41
BVpS18.43
TBVpS18.15
PEG (NY)2.73
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.38% | ||
| ROE | 3.09% | ||
| ROCE | 3.53% | ||
| ROIC | 2.79% | ||
| ROICexc | 2.79% | ||
| ROICexgc | 2.83% | ||
| OM | 26.19% | ||
| PM (TTM) | 10.51% | ||
| GM | 71.12% | ||
| FCFM | 32.96% |
ROA(3y)1.14%
ROA(5y)0.77%
ROE(3y)2.44%
ROE(5y)1.66%
ROIC(3y)2.51%
ROIC(5y)2.07%
ROICexc(3y)2.52%
ROICexc(5y)2.08%
ROICexgc(3y)2.56%
ROICexgc(5y)2.12%
ROCE(3y)3.18%
ROCE(5y)2.62%
ROICexcg growth 3Y28.89%
ROICexcg growth 5Y10.24%
ROICexc growth 3Y28.89%
ROICexc growth 5Y10.67%
OM growth 3Y23.39%
OM growth 5Y7%
PM growth 3Y49.54%
PM growth 5YN/A
GM growth 3Y0.43%
GM growth 5Y0.35%
F-Score5
Asset Turnover0.13
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.99 | ||
| Debt/FCF | 10.19 | ||
| Debt/EBITDA | 5.23 | ||
| Cap/Depr | 42.05% | ||
| Cap/Sales | 16% | ||
| Interest Coverage | 2.03 | ||
| Cash Conversion | 76.22% | ||
| Profit Quality | 313.47% | ||
| Current Ratio | 0.15 | ||
| Quick Ratio | 0.15 | ||
| Altman-Z | 0.75 |
F-Score5
WACC7.17%
ROIC/WACC0.39
Cap/Depr(3y)40.7%
Cap/Depr(5y)36.89%
Cap/Sales(3y)16.05%
Cap/Sales(5y)15.02%
Profit Quality(3y)370.81%
Profit Quality(5y)1082.19%
High Growth Momentum
Growth
EPS 1Y (TTM)16.33%
EPS 3Y55.36%
EPS 5YN/A
EPS Q2Q%50%
EPS Next Y22.4%
EPS Next 2Y14.71%
EPS Next 3Y15.74%
EPS Next 5YN/A
Revenue 1Y (TTM)9.36%
Revenue growth 3Y7.47%
Revenue growth 5Y4.27%
Sales Q2Q%10.54%
Revenue Next Year9.62%
Revenue Next 2Y8.08%
Revenue Next 3Y8.15%
Revenue Next 5YN/A
EBIT growth 1Y10.38%
EBIT growth 3Y32.61%
EBIT growth 5Y11.56%
EBIT Next Year172.21%
EBIT Next 3Y46.43%
EBIT Next 5YN/A
FCF growth 1Y21.71%
FCF growth 3Y8.44%
FCF growth 5Y12.26%
OCF growth 1Y13.16%
OCF growth 3Y8.38%
OCF growth 5Y8.09%