PINNACLE WEST CAPITAL (PNW) Stock Fundamental Analysis
NYSE:PNW - New York Stock Exchange, Inc. - US7234841010 - Common Stock - Currency: USD
PNW gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals 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. While showing a medium growth rate, PNW is valued expensive at the moment. 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
The Return On Assets of PNW (2.33%) is comparable to the rest of the industry.
With a Return On Equity value of 9.01%, PNW perfoms like the industry average, outperforming 58.70% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 3.42%, PNW is in line with its industry, outperforming 45.65% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for PNW is in line with the industry average of 4.68%.
The last Return On Invested Capital (3.42%) for PNW is above the 3 year average (3.05%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.33% | ||
| ROE | 9.01% | ||
| ROIC | 3.42% |
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's Profit Margin of 11.88% is in line compared to the rest of the industry. PNW outperforms 54.35% of its industry peers.
In the last couple of years the Profit Margin of PNW has declined.
PNW has a Operating Margin of 19.75%. This is comparable to the rest of the industry: PNW outperforms 52.17% of its industry peers.
PNW's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.75% | ||
| PM (TTM) | 11.88% | ||
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so PNW is destroying value.
PNW has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, PNW has more shares outstanding
Compared to 1 year ago, PNW has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.81, we must say that PNW is in the distress zone and has some risk of bankruptcy.
With a decent Altman-Z score value of 0.81, PNW is doing good in the industry, outperforming 60.87% of the companies in the same industry.
PNW has a Debt/Equity ratio of 1.28. This is a high value indicating a heavy dependency on external financing.
PNW has a better Debt to Equity ratio (1.28) than 71.74% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.28 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.81 |
ROIC/WACC0.55
WACC6.26%
2.3 Liquidity
PNW has a Current Ratio of 0.59. This is a bad value and indicates that PNW is not financially healthy enough and could expect problems in meeting its short term obligations.
PNW has a Current ratio of 0.59. This is in the lower half of the industry: PNW underperforms 65.22% of its industry peers.
PNW has a Quick Ratio of 0.59. This is a bad value and indicates that PNW is not financially healthy enough and could expect problems in meeting its short term obligations.
PNW has a worse Quick ratio (0.42) than 69.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.59 | ||
| Quick Ratio | 0.42 |
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.
Measured over the past 5 years, PNW shows a small growth in Earnings Per Share. The EPS has been growing by 1.78% on average per year.
The Revenue has grown by 9.13% in the past year. This is quite good.
Measured over the past years, PNW shows a quite strong growth in Revenue. The Revenue has been growing by 8.10% on average per year.
EPS 1Y (TTM)9.59%
EPS 3Y-1.55%
EPS 5Y1.78%
EPS Q2Q%-126.67%
Revenue 1Y (TTM)9.13%
Revenue growth 3Y10.45%
Revenue growth 5Y8.1%
Sales Q2Q%8.47%
3.2 Future
PNW is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 3.95% yearly.
The Revenue is expected to grow by 4.85% on average over the next years.
EPS Next Y-11.91%
EPS Next 2Y-0.36%
EPS Next 3Y2.85%
EPS Next 5Y3.95%
Revenue Next Year3.17%
Revenue Next 2Y4.46%
Revenue Next 3Y4.84%
Revenue Next 5Y4.85%
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.
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 18.75, 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 63.04% of the companies listed in the same industry.
PNW's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.75.
A Price/Forward Earnings ratio of 18.20 indicates a rather expensive valuation of PNW.
The rest of the industry has a similar Price/Forward Earnings ratio as PNW.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.49, PNW is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.75 | ||
| Fwd PE | 18.2 |
4.2 Price Multiples
71.74% of the companies in the same industry are more expensive than PNW, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 10.16 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)10.55
EPS Next 2Y-0.36%
EPS Next 3Y2.85%
5. Dividend
5.1 Amount
PNW has a Yearly Dividend Yield of 3.76%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.45, PNW pays a bit more dividend than its industry peers.
PNW's Dividend Yield is rather good when compared to the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.76% |
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
64.83% 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.
DP64.83%
EPS Next 2Y-0.36%
EPS Next 3Y2.85%
NYSE:PNW (5/2/2025, 11:14:00 AM)
94.32
+0.91 (+0.97%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners101.91%
Inst Owner Change0.44%
Ins Owners0.09%
Ins Owner Change15.3%
Market Cap11.24B
Analysts75.24
Price Target98.43 (4.36%)
Short Float %2.75%
Short Ratio2.6
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.76% |
Yearly Dividend3.39
Dividend Growth(5Y)2.9%
DP64.83%
Div Incr Years13
Div Non Decr Years31
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)26.99%
Min EPS beat(2)-4.36%
Max EPS beat(2)58.34%
EPS beat(4)3
Avg EPS beat(4)495.62%
Min EPS beat(4)-4.36%
Max EPS beat(4)1889.34%
EPS beat(8)5
Avg EPS beat(8)235.2%
EPS beat(12)8
Avg EPS beat(12)169.31%
EPS beat(16)12
Avg EPS beat(16)149.75%
Revenue beat(2)1
Avg Revenue beat(2)-1.17%
Min Revenue beat(2)-6.56%
Max Revenue beat(2)4.23%
Revenue beat(4)2
Avg Revenue beat(4)0.23%
Min Revenue beat(4)-6.56%
Max Revenue beat(4)7.29%
Revenue beat(8)5
Avg Revenue beat(8)1.58%
Revenue beat(12)9
Avg Revenue beat(12)8.31%
Revenue beat(16)12
Avg Revenue beat(16)7.85%
PT rev (1m)2.01%
PT rev (3m)1.73%
EPS NQ rev (1m)-65.5%
EPS NQ rev (3m)-82.33%
EPS NY rev (1m)-0.56%
EPS NY rev (3m)-1.31%
Revenue NQ rev (1m)1.12%
Revenue NQ rev (3m)0.7%
Revenue NY rev (1m)1.55%
Revenue NY rev (3m)2.64%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.75 | ||
| Fwd PE | 18.2 | ||
| P/S | 2.19 | ||
| P/FCF | N/A | ||
| P/OCF | 6.98 | ||
| P/B | 1.66 | ||
| P/tB | 1.82 | ||
| EV/EBITDA | 10.16 |
EPS(TTM)5.03
EY5.33%
EPS(NY)5.18
Fwd EY5.49%
FCF(TTM)-5.36
FCFYN/A
OCF(TTM)13.5
OCFY14.32%
SpS42.99
BVpS56.66
TBVpS51.7
PEG (NY)N/A
PEG (5Y)10.55
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.33% | ||
| ROE | 9.01% | ||
| ROCE | 4.35% | ||
| ROIC | 3.42% | ||
| ROICexc | 3.42% | ||
| ROICexgc | 3.51% | ||
| OM | 19.75% | ||
| PM (TTM) | 11.88% | ||
| 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-Score6
Asset Turnover0.2
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.28 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 4.38 | ||
| Cap/Depr | 235.23% | ||
| Cap/Sales | 43.89% | ||
| Interest Coverage | 2.81 | ||
| Cash Conversion | 81.79% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.59 | ||
| Quick Ratio | 0.42 | ||
| Altman-Z | 0.81 |
F-Score6
WACC6.26%
ROIC/WACC0.55
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-11.91%
EPS Next 2Y-0.36%
EPS Next 3Y2.85%
EPS Next 5Y3.95%
Revenue 1Y (TTM)9.13%
Revenue growth 3Y10.45%
Revenue growth 5Y8.1%
Sales Q2Q%8.47%
Revenue Next Year3.17%
Revenue Next 2Y4.46%
Revenue Next 3Y4.84%
Revenue Next 5Y4.85%
EBIT growth 1Y22.73%
EBIT growth 3Y7.91%
EBIT growth 5Y11.51%
EBIT Next Year102.43%
EBIT Next 3Y35.86%
EBIT Next 5Y23.9%
FCF growth 1Y-0.11%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y33.3%
OCF growth 3Y23.24%
OCF growth 5Y10.97%