PINNACLE WEST CAPITAL (PNW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:PNW - US7234841010 - Common Stock
92.17 USD
-0.25 (-0.27%)
92.17 USD
0 (0%)
PNW gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 46 industry peers in the Electric Utilities industry. Both the profitability and financial health of PNW have multiple concerns. PNW is valied quite expensively at the moment, while it does show a decent growth rate. PNW also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- PNW had positive earnings in the past year.
- In the past year PNW had a positive cash flow from operations.
- In the past 5 years PNW has always been profitable.
- In the past 5 years PNW always reported a positive cash flow from operatings.
1.2 Ratios
- PNW's Return On Assets of 1.99% is on the low side compared to the rest of the industry. PNW is outperformed by 82.61% of its industry peers.
- Looking at the Return On Equity, with a value of 8.29%, PNW is doing worse than 69.57% of the companies in the same industry.
- PNW has a Return On Invested Capital of 3.01%. This is in the lower half of the industry: PNW underperforms 73.91% of its industry peers.
- PNW had an Average Return On Invested Capital over the past 3 years of 3.05%. This is in line with the industry average of 4.58%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.99% | ||
| ROE | 8.29% | ||
| ROIC | 3.01% |
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
- Looking at the Profit Margin, with a value of 11.20%, PNW is doing worse than 65.22% of the companies in the same industry.
- In the last couple of years the Profit Margin of PNW has declined.
- With a Operating Margin value of 19.43%, PNW perfoms like the industry average, outperforming 43.48% of the companies in the same industry.
- PNW's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.43% | ||
| PM (TTM) | 11.2% | ||
| 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.
- Compared to 1 year ago, PNW has more shares outstanding
- The number of shares outstanding for PNW has been increased compared to 5 years ago.
- PNW has a better debt/assets ratio than last year.
2.2 Solvency
- PNW has an Altman-Z score of 0.73. This is a bad value and indicates that PNW is not financially healthy and even has some risk of bankruptcy.
- PNW's Altman-Z score of 0.73 is on the low side compared to the rest of the industry. PNW is outperformed by 63.04% of its industry peers.
- PNW has a Debt/Equity ratio of 1.38. This is a high value indicating a heavy dependency on external financing.
- PNW has a Debt to Equity ratio of 1.38. This is comparable to the rest of the industry: PNW outperforms 58.70% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.38 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.73 |
ROIC/WACC0.48
WACC6.27%
2.3 Liquidity
- PNW has a Current Ratio of 0.67. 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 Current ratio (0.67) than 78.26% of its industry peers.
- PNW has a Quick Ratio of 0.67. 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 (0.49) than 78.26% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.67 | ||
| Quick Ratio | 0.49 |
3. Growth
3.1 Past
- PNW shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -7.77%.
- PNW shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 1.78% yearly.
- Looking at the last year, PNW shows a small growth in Revenue. The Revenue has grown by 5.70% in the last year.
- The Revenue has been growing by 8.10% on average over the past years. This is quite good.
EPS 1Y (TTM)-7.77%
EPS 3Y-1.55%
EPS 5Y1.78%
EPS Q2Q%0.59%
Revenue 1Y (TTM)5.7%
Revenue growth 3Y10.45%
Revenue growth 5Y8.1%
Sales Q2Q%2.94%
3.2 Future
- Based on estimates for the next years, PNW will show a small growth in Earnings Per Share. The EPS will grow by 4.74% on average per year.
- PNW is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.16% yearly.
EPS Next Y-5.92%
EPS Next 2Y-4.77%
EPS Next 3Y2.85%
EPS Next 5Y4.74%
Revenue Next Year5.97%
Revenue Next 2Y4.96%
Revenue Next 3Y5.71%
Revenue Next 5Y5.16%
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
- A Price/Earnings ratio of 18.93 indicates a rather expensive valuation of PNW.
- PNW's Price/Earnings ratio is in line with the industry average.
- When comparing the Price/Earnings ratio of PNW to the average of the S&P500 Index (27.21), we can say PNW is valued slightly cheaper.
- PNW is valuated rather expensively with a Price/Forward Earnings ratio of 19.47.
- PNW's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. PNW is more expensive than 67.39% of the companies in the same industry.
- When comparing the Price/Forward Earnings ratio of PNW to the average of the S&P500 Index (25.98), we can say PNW is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.93 | ||
| Fwd PE | 19.47 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PNW is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 10.36 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)10.65
EPS Next 2Y-4.77%
EPS Next 3Y2.85%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 3.94%, PNW has a reasonable but not impressive dividend return.
- PNW's Dividend Yield is rather good when compared to the industry average which is at 2.90. PNW pays more dividend than 82.61% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.81, PNW pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.94% |
5.2 History
- The dividend of PNW has a limited annual growth rate of 2.90%.
- PNW has paid a dividend for at least 10 years, which is a reliable track record.
- PNW has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)2.9%
Div Incr Years13
Div Non Decr Years31
5.3 Sustainability
- 69.92% 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.
DP69.92%
EPS Next 2Y-4.77%
EPS Next 3Y2.85%
PINNACLE WEST CAPITAL / PNW FAQ
What is the fundamental rating for PNW stock?
ChartMill assigns a fundamental rating of 3 / 10 to PNW.
Can you provide the valuation status for PINNACLE WEST CAPITAL?
ChartMill assigns a valuation rating of 2 / 10 to PINNACLE WEST CAPITAL (PNW). This can be considered as Overvalued.
How profitable is PINNACLE WEST CAPITAL (PNW) stock?
PINNACLE WEST CAPITAL (PNW) has a profitability rating of 3 / 10.
Can you provide the financial health for PNW stock?
The financial health rating of PINNACLE WEST CAPITAL (PNW) is 1 / 10.
What is the expected EPS growth for PINNACLE WEST CAPITAL (PNW) stock?
The Earnings per Share (EPS) of PINNACLE WEST CAPITAL (PNW) is expected to decline by -5.92% in the next year.