PHG gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 184 industry peers in the Health Care Equipment & Supplies industry. While PHG is still in line with the averages on profitability rating, there are concerns on its financial health. PHG is not valued too expensively and it also shows a decent growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

PHG had positive earnings in the past year.
PHG had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: PHG reported negative net income in multiple years.
PHG had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

PHG's Return On Assets of 0.63% is fine compared to the rest of the industry. PHG outperforms 73.91% of its industry peers.
PHG has a Return On Equity of 1.56%. This is in the better half of the industry: PHG outperforms 75.00% of its industry peers.
The Return On Invested Capital of PHG (4.44%) is better than 75.00% of its industry peers.

		Industry Rank	Sector Rank
ROA	0.63%
ROE	1.56%
ROIC	4.44%

ROA(3y)-3.08%

ROA(5y)1.15%

ROE(3y)-7.29%

ROE(5y)2.23%

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

With a decent Profit Margin value of 0.93%, PHG is doing good in the industry, outperforming 73.91% of the companies in the same industry.
With a decent Operating Margin value of 6.10%, PHG is doing good in the industry, outperforming 71.20% of the companies in the same industry.
In the last couple of years the Operating Margin of PHG has declined.
With a Gross Margin value of 43.49%, PHG is not doing good in the industry: 64.13% of the companies in the same industry are doing better.
In the last couple of years the Gross Margin of PHG has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	6.1%
PM (TTM)	0.93%
GM	43.49%

OM growth 3Y-1.59%

OM growth 5Y-8.09%

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y4.71%

GM growth 5Y1.08%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), PHG is destroying value.
Compared to 1 year ago, PHG has less shares outstanding
PHG has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, PHG has a worse debt to assets ratio.

2.2 Solvency

PHG has an Altman-Z score of 2.00. This is not the best score and indicates that PHG is in the grey zone with still only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.00, PHG is in the better half of the industry, outperforming 60.33% of the companies in the same industry.
The Debt to FCF ratio of PHG is 14.51, which is on the high side as it means it would take PHG, 14.51 years of fcf income to pay off all of its debts.
PHG has a better Debt to FCF ratio (14.51) than 70.65% of its industry peers.
A Debt/Equity ratio of 0.69 indicates that PHG is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.69, PHG is not doing good in the industry: 67.39% of the companies in the same industry are doing better.

		Industry Rank	Sector Rank
Debt/Equity	0.69
Debt/FCF	14.51
Altman-Z	2

ROIC/WACC0.66

WACC6.77%

2.3 Liquidity

PHG has a Current Ratio of 1.32. This is a normal value and indicates that PHG is financially healthy and should not expect problems in meeting its short term obligations.
PHG's Current ratio of 1.32 is on the low side compared to the rest of the industry. PHG is outperformed by 77.72% of its industry peers.
A Quick Ratio of 0.86 indicates that PHG may have some problems paying its short term obligations.
With a Quick ratio value of 0.86, PHG is not doing good in the industry: 80.98% of the companies in the same industry are doing better.

		Industry Rank	Sector Rank
Current Ratio	1.32
Quick Ratio	0.86

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

PHG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.15%, which is quite good.
PHG shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -7.17% yearly.
Looking at the last year, PHG shows a decrease in Revenue. The Revenue has decreased by -1.43% in the last year.
The Revenue has been growing slightly by 1.00% on average over the past years.

EPS 1Y (TTM)15.15%

EPS 3Y-5.66%

EPS 5Y-7.17%

EPS Q2Q%12.5%

Revenue 1Y (TTM)-1.43%

Revenue growth 3Y1.65%

Revenue growth 5Y1%

Sales Q2Q%-1.71%

3.2 Future

Based on estimates for the next years, PHG will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.28% on average per year.
The Revenue is expected to grow by 3.00% on average over the next years.

EPS Next Y4.94%

EPS Next 2Y4.81%

EPS Next 3Y7.44%

EPS Next 5Y10.28%

Revenue Next Year-2.27%

Revenue Next 2Y0.25%

Revenue Next 3Y1.58%

Revenue Next 5Y3%

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.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 16.90 indicates a correct valuation of PHG.
Compared to the rest of the industry, the Price/Earnings ratio of PHG indicates a rather cheap valuation: PHG is cheaper than 87.50% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.21, PHG is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 16.45, the valuation of PHG can be described as correct.
Based on the Price/Forward Earnings ratio, PHG is valued cheaply inside the industry as 85.87% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.98, PHG is valued a bit cheaper.

		Industry Rank	Sector Rank
PE	16.9
Fwd PE	16.45

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, PHG is valued cheaper than 84.24% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, PHG is valued a bit cheaper than 75.00% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	41.71
EV/EBITDA	13.13

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates PHG does not grow enough to justify the current Price/Earnings ratio.

PEG (NY)3.42

PEG (5Y)N/A

EPS Next 2Y4.81%

EPS Next 3Y7.44%

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5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 3.86%, PHG has a reasonable but not impressive dividend return.
PHG's Dividend Yield is rather good when compared to the industry average which is at 0.20. PHG pays more dividend than 98.91% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 1.81, PHG pays a better dividend.

		Industry Rank	Sector Rank
Dividend Yield	3.86%

5.2 History

The dividend of PHG decreases each year by -70.49%.
PHG has paid a dividend for at least 10 years, which is a reliable track record.

Dividend Growth(5Y)-70.49%

Div Incr Years0

Div Non Decr Years0

5.3 Sustainability

PHG pays out 199.39% of its income as dividend. This is not a sustainable payout ratio.

DP199.39%

EPS Next 2Y4.81%

EPS Next 3Y7.44%

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KONINKLIJKE PHILIPS NVR- NY / PHG FAQ

What is the ChartMill fundamental rating of KONINKLIJKE PHILIPS NVR- NY (PHG) stock?

ChartMill assigns a fundamental rating of 4 / 10 to PHG.

Can you provide the valuation status for KONINKLIJKE PHILIPS NVR- NY?

ChartMill assigns a valuation rating of 5 / 10 to KONINKLIJKE PHILIPS NVR- NY (PHG). This can be considered as Fairly Valued.

How profitable is KONINKLIJKE PHILIPS NVR- NY (PHG) stock?

KONINKLIJKE PHILIPS NVR- NY (PHG) has a profitability rating of 4 / 10.

How financially healthy is KONINKLIJKE PHILIPS NVR- NY?

The financial health rating of KONINKLIJKE PHILIPS NVR- NY (PHG) is 3 / 10.

Is the dividend of KONINKLIJKE PHILIPS NVR- NY sustainable?

The dividend rating of KONINKLIJKE PHILIPS NVR- NY (PHG) is 4 / 10 and the dividend payout ratio is 199.39%.