PINNACLE WEST CAPITAL (PNW) Stock Fundamental Analysis
NYSE:PNW - New York Stock Exchange, Inc. - US7234841010 - Common Stock - Currency: USD
Overall PNW gets a fundamental rating of 3 out of 10. We evaluated PNW against 46 industry peers in the Electric Utilities industry. There are concerns on the financial health of PNW while its profitability can be described as average. PNW is quite expensive at the moment. It does show a decent growth rate. Finally PNW also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year PNW was profitable.
In the past year PNW had a positive cash flow from operations.
PNW had positive earnings in each of the past 5 years.
PNW had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
PNW's Return On Assets of 2.16% is on the low side compared to the rest of the industry. PNW is outperformed by 65.22% of its industry peers.
PNW's Return On Equity of 8.72% is in line compared to the rest of the industry. PNW outperforms 43.48% of its industry peers.
PNW's Return On Invested Capital of 3.24% is on the low side compared to the rest of the industry. PNW is outperformed by 67.39% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PNW is significantly below the industry average of 45.26%.
The last Return On Invested Capital (3.24%) for PNW is above the 3 year average (3.05%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.16% | ||
| ROE | 8.72% | ||
| ROIC | 3.24% |
ROA(3y)2.16%
ROA(5y)2.41%
ROE(3y)8.38%
ROE(5y)9.08%
ROIC(3y)3.05%
ROIC(5y)3.14%
1.3 Margins
PNW has a Profit Margin (11.28%) which is comparable to the rest of the industry.
In the last couple of years the Profit Margin of PNW has declined.
PNW has a Operating Margin (19.26%) which is comparable to the rest of the industry.
PNW's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.26% | ||
| PM (TTM) | 11.28% | ||
| GM | N/A |
OM growth 3Y-2.29%
OM growth 5Y3.15%
PM growth 3Y-9.95%
PM growth 5Y-5.19%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), PNW is destroying value.
Compared to 1 year ago, PNW has more shares outstanding
PNW has more shares outstanding than it did 5 years ago.
The debt/assets ratio for PNW has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.74, we must say that PNW is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of PNW (0.74) is comparable to the rest of the industry.
A Debt/Equity ratio of 1.33 is on the high side and indicates that PNW has dependencies on debt financing.
With a decent Debt to Equity ratio value of 1.33, PNW is doing good in the industry, outperforming 67.39% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.33 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.74 |
ROIC/WACC0.51
WACC6.39%
2.3 Liquidity
PNW has a Current Ratio of 0.50. This is a bad value and indicates that PNW is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of PNW (0.50) is worse than 69.57% of its industry peers.
PNW has a Quick Ratio of 0.50. This is a bad value and indicates that PNW is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of PNW (0.34) is worse than 67.39% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.5 | ||
| Quick Ratio | 0.34 |
3. Growth
3.1 Past
PNW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.59%, which is quite good.
The Earnings Per Share has been growing slightly by 1.78% on average over the past years.
PNW shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.69%.
The Revenue has been growing by 8.10% on average over the past years. This is quite good.
EPS 1Y (TTM)9.59%
EPS 3Y-1.55%
EPS 5Y1.78%
EPS Q2Q%-126.67%
Revenue 1Y (TTM)10.69%
Revenue growth 3Y10.45%
Revenue growth 5Y8.1%
Sales Q2Q%8.47%
3.2 Future
The Earnings Per Share is expected to grow by 3.95% on average over the next years.
Based on estimates for the next years, PNW will show a small growth in Revenue. The Revenue will grow by 4.85% on average per year.
EPS Next Y-12%
EPS Next 2Y-0.76%
EPS Next 3Y3.12%
EPS Next 5Y3.95%
Revenue Next Year3.07%
Revenue Next 2Y4.45%
Revenue Next 3Y4.84%
Revenue Next 5Y4.85%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
With a Price/Earnings ratio of 18.04, PNW is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of PNW indicates a somewhat cheap valuation: PNW is cheaper than 60.87% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of PNW to the average of the S&P500 Index (25.82), we can say PNW is valued slightly cheaper.
PNW is valuated rather expensively with a Price/Forward Earnings ratio of 17.65.
PNW's Price/Forward Earnings ratio is in line with the industry average.
PNW is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.04 | ||
| Fwd PE | 17.65 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PNW indicates a somewhat cheap valuation: PNW is cheaper than 76.09% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 9.87 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)10.15
EPS Next 2Y-0.76%
EPS Next 3Y3.12%
5. Dividend
5.1 Amount
PNW has a Yearly Dividend Yield of 3.93%.
PNW's Dividend Yield is a higher than the industry average which is at 3.45.
Compared to an average S&P500 Dividend Yield of 2.36, PNW pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.93% |
5.2 History
The dividend of PNW has a limited annual growth rate of 2.90%.
PNW has been paying a dividend for at least 10 years, so it has a reliable track record.
PNW has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)2.9%
Div Incr Years13
Div Non Decr Years31
5.3 Sustainability
68.37% of the earnings are spent on dividend by PNW. This is not a sustainable payout ratio.
PNW's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP68.37%
EPS Next 2Y-0.76%
EPS Next 3Y3.12%
90.75
+0.86 (+0.96%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners101.91%
Inst Owner Change2.21%
Ins Owners0.09%
Ins Owner Change16.78%
Market Cap10.84B
Analysts75.24
Price Target99.01 (9.1%)
Short Float %3.65%
Short Ratio3.34
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.93% |
Yearly Dividend3.39
Dividend Growth(5Y)2.9%
DP68.37%
Div Incr Years13
Div Non Decr Years31
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-131.46%
Min EPS beat(2)-321.25%
Max EPS beat(2)58.34%
EPS beat(4)2
Avg EPS beat(4)-57.02%
Min EPS beat(4)-321.25%
Max EPS beat(4)58.34%
EPS beat(8)5
Avg EPS beat(8)217.62%
EPS beat(12)7
Avg EPS beat(12)130.22%
EPS beat(16)11
Avg EPS beat(16)128.14%
Revenue beat(2)2
Avg Revenue beat(2)3.22%
Min Revenue beat(2)2.21%
Max Revenue beat(2)4.23%
Revenue beat(4)3
Avg Revenue beat(4)1.79%
Min Revenue beat(4)-6.56%
Max Revenue beat(4)7.29%
Revenue beat(8)5
Avg Revenue beat(8)-0.43%
Revenue beat(12)9
Avg Revenue beat(12)7.5%
Revenue beat(16)13
Avg Revenue beat(16)8.16%
PT rev (1m)0.05%
PT rev (3m)3.47%
EPS NQ rev (1m)5.74%
EPS NQ rev (3m)6.53%
EPS NY rev (1m)-0.11%
EPS NY rev (3m)-0.59%
Revenue NQ rev (1m)-0.07%
Revenue NQ rev (3m)1.81%
Revenue NY rev (1m)0.73%
Revenue NY rev (3m)1.43%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.04 | ||
| Fwd PE | 17.65 | ||
| P/S | 2.08 | ||
| P/FCF | N/A | ||
| P/OCF | 6.5 | ||
| P/B | 1.61 | ||
| P/tB | 1.75 | ||
| EV/EBITDA | 9.87 |
EPS(TTM)5.03
EY5.54%
EPS(NY)5.14
Fwd EY5.66%
FCF(TTM)-5.78
FCFYN/A
OCF(TTM)13.96
OCFY15.38%
SpS43.67
BVpS56.53
TBVpS51.87
PEG (NY)N/A
PEG (5Y)10.15
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.16% | ||
| ROE | 8.72% | ||
| ROCE | 4.17% | ||
| ROIC | 3.24% | ||
| ROICexc | 3.24% | ||
| ROICexgc | 3.31% | ||
| OM | 19.26% | ||
| PM (TTM) | 11.28% | ||
| GM | N/A | ||
| FCFM | N/A |
ROA(3y)2.16%
ROA(5y)2.41%
ROE(3y)8.38%
ROE(5y)9.08%
ROIC(3y)3.05%
ROIC(5y)3.14%
ROICexc(3y)3.05%
ROICexc(5y)3.14%
ROICexgc(3y)3.1%
ROICexgc(5y)3.19%
ROCE(3y)3.88%
ROCE(5y)3.97%
ROICexcg growth 3Y3.09%
ROICexcg growth 5Y3.77%
ROICexc growth 3Y2.69%
ROICexc growth 5Y3.62%
OM growth 3Y-2.29%
OM growth 5Y3.15%
PM growth 3Y-9.95%
PM growth 5Y-5.19%
GM growth 3YN/A
GM growth 5YN/A
F-Score7
Asset Turnover0.19
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.33 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 4.5 | ||
| Cap/Depr | 240.1% | ||
| Cap/Sales | 45.22% | ||
| Interest Coverage | 2.73 | ||
| Cash Conversion | 83.94% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.5 | ||
| Quick Ratio | 0.34 | ||
| Altman-Z | 0.74 |
F-Score7
WACC6.39%
ROIC/WACC0.51
Cap/Depr(3y)220.06%
Cap/Depr(5y)211.68%
Cap/Sales(3y)40.9%
Cap/Sales(5y)39.68%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)9.59%
EPS 3Y-1.55%
EPS 5Y1.78%
EPS Q2Q%-126.67%
EPS Next Y-12%
EPS Next 2Y-0.76%
EPS Next 3Y3.12%
EPS Next 5Y3.95%
Revenue 1Y (TTM)10.69%
Revenue growth 3Y10.45%
Revenue growth 5Y8.1%
Sales Q2Q%8.47%
Revenue Next Year3.07%
Revenue Next 2Y4.45%
Revenue Next 3Y4.84%
Revenue Next 5Y4.85%
EBIT growth 1Y19.24%
EBIT growth 3Y7.91%
EBIT growth 5Y11.51%
EBIT Next Year102.43%
EBIT Next 3Y35.86%
EBIT Next 5Y23.9%
FCF growth 1Y-6.32%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y49.61%
OCF growth 3Y23.24%
OCF growth 5Y10.97%