PEARSON PLC-SPONSORED ADR (PSO) Stock Fundamental Analysis
USA - NYSE:PSO - US7050151056 - ADR
13.91 USD
-0.14 (-1%)
13.91 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to PSO. PSO was compared to 77 industry peers in the Diversified Consumer Services industry. PSO has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. PSO has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year PSO was profitable.
In the past year PSO had a positive cash flow from operations.
PSO had positive earnings in each of the past 5 years.
Each year in the past 5 years PSO had a positive operating cash flow.
1.2 Ratios
PSO has a better Return On Assets (7.08%) than 75.32% of its industry peers.
With a decent Return On Equity value of 12.29%, PSO is doing good in the industry, outperforming 72.73% of the companies in the same industry.
With an excellent Return On Invested Capital value of 8.65%, PSO belongs to the best of the industry, outperforming 81.82% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for PSO is below the industry average of 9.47%.
The 3 year average ROIC (6.70%) for PSO is below the current ROIC(8.65%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.08% | ||
| ROE | 12.29% | ||
| ROIC | 8.65% |
ROA(3y)5.07%
ROA(5y)4.41%
ROE(3y)8.59%
ROE(5y)7.58%
ROIC(3y)6.7%
ROIC(5y)5.84%
1.3 Margins
PSO has a better Profit Margin (12.53%) than 75.32% of its industry peers.
In the last couple of years the Profit Margin of PSO has grown nicely.
With a decent Operating Margin value of 15.77%, PSO is doing good in the industry, outperforming 75.32% of the companies in the same industry.
PSO's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 51.45%, PSO is in line with its industry, outperforming 57.14% of the companies in the same industry.
PSO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.77% | ||
| PM (TTM) | 12.53% | ||
| GM | 51.45% |
OM growth 3Y25.2%
OM growth 5Y6.89%
PM growth 3Y33.26%
PM growth 5Y12.36%
GM growth 3Y1.31%
GM growth 5Y-0.38%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so PSO is destroying value.
PSO has less shares outstanding than it did 1 year ago.
PSO has less shares outstanding than it did 5 years ago.
The debt/assets ratio for PSO is higher compared to a year ago.
2.2 Solvency
PSO has an Altman-Z score of 2.83. This is not the best score and indicates that PSO is in the grey zone with still only limited risk for bankruptcy at the moment.
PSO has a Altman-Z score of 2.83. This is in the better half of the industry: PSO outperforms 71.43% of its industry peers.
PSO has a debt to FCF ratio of 2.42. This is a good value and a sign of high solvency as PSO would need 2.42 years to pay back of all of its debts.
PSO has a better Debt to FCF ratio (2.42) than 75.32% of its industry peers.
A Debt/Equity ratio of 0.40 indicates that PSO is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.40, PSO is in line with its industry, outperforming 48.05% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 2.42 | ||
| Altman-Z | 2.83 |
ROIC/WACC0.97
WACC8.95%
2.3 Liquidity
PSO has a Current Ratio of 2.31. This indicates that PSO is financially healthy and has no problem in meeting its short term obligations.
PSO has a Current ratio of 2.31. This is amongst the best in the industry. PSO outperforms 80.52% of its industry peers.
A Quick Ratio of 2.24 indicates that PSO has no problem at all paying its short term obligations.
The Quick ratio of PSO (2.24) is better than 80.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.31 | ||
| Quick Ratio | 2.24 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 3.29% over the past year.
The Earnings Per Share has been growing slightly by 1.15% on average over the past years.
PSO shows a decrease in Revenue. In the last year, the revenue decreased by -0.82%.
Measured over the past years, PSO shows a decrease in Revenue. The Revenue has been decreasing by -1.70% on average per year.
EPS 1Y (TTM)3.29%
EPS 3Y20.87%
EPS 5Y1.15%
EPS Q2Q%-5.47%
Revenue 1Y (TTM)-0.82%
Revenue growth 3Y1.19%
Revenue growth 5Y-1.7%
Sales Q2Q%-1.82%
3.2 Future
The Earnings Per Share is expected to grow by 8.39% on average over the next years. This is quite good.
Based on estimates for the next years, PSO will show a small growth in Revenue. The Revenue will grow by 3.04% on average per year.
EPS Next Y3.68%
EPS Next 2Y7.05%
EPS Next 3Y8.39%
EPS Next 5YN/A
Revenue Next Year-0.19%
Revenue Next 2Y2.25%
Revenue Next 3Y3.04%
Revenue Next 5YN/A
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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 16.96 indicates a correct valuation of PSO.
PSO's Price/Earnings ratio is a bit cheaper when compared to the industry. PSO is cheaper than 74.03% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.10, PSO is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 14.45, the valuation of PSO can be described as correct.
Based on the Price/Forward Earnings ratio, PSO is valued a bit cheaper than 75.32% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of PSO to the average of the S&P500 Index (22.52), we can say PSO is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.96 | ||
| Fwd PE | 14.45 |
4.2 Price Multiples
PSO's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. PSO is cheaper than 70.13% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PSO indicates a rather cheap valuation: PSO is cheaper than 85.71% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.02 | ||
| EV/EBITDA | 10.33 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates PSO does not grow enough to justify the current Price/Earnings ratio.
PSO has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)4.61
PEG (5Y)14.73
EPS Next 2Y7.05%
EPS Next 3Y8.39%
5. Dividend
5.1 Amount
PSO has a Yearly Dividend Yield of 2.18%.
Compared to an average industry Dividend Yield of 1.95, PSO pays a better dividend. On top of this PSO pays more dividend than 94.81% of the companies listed in the same industry.
PSO's Dividend Yield is comparable with the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.18% |
5.2 History
The dividend of PSO has a limited annual growth rate of 4.00%.
PSO has paid a dividend for at least 10 years, which is a reliable track record.
PSO has decreased its dividend in the last 3 years.
Dividend Growth(5Y)4%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
36.05% of the earnings are spent on dividend by PSO. This is a low number and sustainable payout ratio.
PSO's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP36.05%
EPS Next 2Y7.05%
EPS Next 3Y8.39%
13.91
-0.14 (-1%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners77.62%
Inst Owner Change-0.2%
Ins Owners0.2%
Ins Owner ChangeN/A
Market Cap8.91B
Revenue(TTM)3.52B
Net Income(TTM)441.00M
Analysts68.57
Price Target16.89 (21.42%)
Short Float %0.28%
Short Ratio3.02
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.18% |
Yearly Dividend0.32
Dividend Growth(5Y)4%
DP36.05%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)N/A
Avg Revenue beat(2)N/A
Min Revenue beat(2)N/A
Max Revenue beat(2)N/A
Revenue beat(4)N/A
Avg Revenue beat(4)N/A
Min Revenue beat(4)N/A
Max Revenue beat(4)N/A
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)-1.97%
PT rev (3m)-0.55%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)0.86%
EPS NY rev (3m)-5.21%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.96 | ||
| Fwd PE | 14.45 | ||
| P/S | 1.93 | ||
| P/FCF | 11.02 | ||
| P/OCF | 9.12 | ||
| P/B | 1.89 | ||
| P/tB | 8.7 | ||
| EV/EBITDA | 10.33 |
EPS(TTM)0.82
EY5.9%
EPS(NY)0.96
Fwd EY6.92%
FCF(TTM)1.26
FCFY9.08%
OCF(TTM)1.53
OCFY10.96%
SpS7.22
BVpS7.36
TBVpS1.6
PEG (NY)4.61
PEG (5Y)14.73
Graham Number11.65
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.08% | ||
| ROE | 12.29% | ||
| ROCE | 10.65% | ||
| ROIC | 8.65% | ||
| ROICexc | 9.26% | ||
| ROICexgc | 21.92% | ||
| OM | 15.77% | ||
| PM (TTM) | 12.53% | ||
| GM | 51.45% | ||
| FCFM | 17.5% |
ROA(3y)5.07%
ROA(5y)4.41%
ROE(3y)8.59%
ROE(5y)7.58%
ROIC(3y)6.7%
ROIC(5y)5.84%
ROICexc(3y)7.48%
ROICexc(5y)7.31%
ROICexgc(3y)20.27%
ROICexgc(5y)22.68%
ROCE(3y)8.26%
ROCE(5y)7.2%
ROICexgc growth 3Y7.27%
ROICexgc growth 5Y10.63%
ROICexc growth 3Y17.53%
ROICexc growth 5Y6.81%
OM growth 3Y25.2%
OM growth 5Y6.89%
PM growth 3Y33.26%
PM growth 5Y12.36%
GM growth 3Y1.31%
GM growth 5Y-0.38%
F-Score8
Asset Turnover0.57
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 2.42 | ||
| Debt/EBITDA | 1.84 | ||
| Cap/Depr | 58.45% | ||
| Cap/Sales | 3.64% | ||
| Interest Coverage | 10.09 | ||
| Cash Conversion | 96.12% | ||
| Profit Quality | 139.68% | ||
| Current Ratio | 2.31 | ||
| Quick Ratio | 2.24 | ||
| Altman-Z | 2.83 |
F-Score8
WACC8.95%
ROIC/WACC0.97
Cap/Depr(3y)49.36%
Cap/Depr(5y)46.7%
Cap/Sales(3y)3.58%
Cap/Sales(5y)3.97%
Profit Quality(3y)103.3%
Profit Quality(5y)94.38%
High Growth Momentum
Growth
EPS 1Y (TTM)3.29%
EPS 3Y20.87%
EPS 5Y1.15%
EPS Q2Q%-5.47%
EPS Next Y3.68%
EPS Next 2Y7.05%
EPS Next 3Y8.39%
EPS Next 5YN/A
Revenue 1Y (TTM)-0.82%
Revenue growth 3Y1.19%
Revenue growth 5Y-1.7%
Sales Q2Q%-1.82%
Revenue Next Year-0.19%
Revenue Next 2Y2.25%
Revenue Next 3Y3.04%
Revenue Next 5YN/A
EBIT growth 1Y9.47%
EBIT growth 3Y26.69%
EBIT growth 5Y5.08%
EBIT Next Year36.45%
EBIT Next 3Y14.89%
EBIT Next 5YN/A
FCF growth 1Y133.33%
FCF growth 3Y49.68%
FCF growth 5Y23.37%
OCF growth 1Y82.8%
OCF growth 3Y24.36%
OCF growth 5Y11.19%
PEARSON PLC-SPONSORED ADR / PSO FAQ
What is the ChartMill fundamental rating of PEARSON PLC-SPONSORED ADR (PSO) stock?
ChartMill assigns a fundamental rating of 6 / 10 to PSO.
What is the valuation status of PEARSON PLC-SPONSORED ADR (PSO) stock?
ChartMill assigns a valuation rating of 5 / 10 to PEARSON PLC-SPONSORED ADR (PSO). This can be considered as Fairly Valued.
How profitable is PEARSON PLC-SPONSORED ADR (PSO) stock?
PEARSON PLC-SPONSORED ADR (PSO) has a profitability rating of 7 / 10.
What are the PE and PB ratios of PEARSON PLC-SPONSORED ADR (PSO) stock?
The Price/Earnings (PE) ratio for PEARSON PLC-SPONSORED ADR (PSO) is 16.96 and the Price/Book (PB) ratio is 1.89.
What is the earnings growth outlook for PEARSON PLC-SPONSORED ADR?
The Earnings per Share (EPS) of PEARSON PLC-SPONSORED ADR (PSO) is expected to grow by 3.68% in the next year.