PEARSON PLC-SPONSORED ADR (PSO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:PSO - US7050151056 - ADR
13.15 USD
+0.07 (+0.54%)
13.15 USD
0 (0%)
PSO gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 77 industry peers in the Diversified Consumer Services industry. PSO scores excellent points on both the profitability and health parts. This is a solid base for a good stock. PSO is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
PSO had positive earnings in the past year.
PSO had a positive operating cash flow in the past year.
PSO had positive earnings in each of the past 5 years.
PSO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
PSO's Return On Assets of 7.08% is fine compared to the rest of the industry. PSO outperforms 72.73% of its industry peers.
The Return On Equity of PSO (12.29%) is better than 70.13% of its industry peers.
PSO's Return On Invested Capital of 8.65% is fine compared to the rest of the industry. PSO outperforms 77.92% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PSO is below the industry average of 9.42%.
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
The Profit Margin of PSO (12.53%) is better than 77.92% of its industry peers.
PSO's Profit Margin has improved in the last couple of years.
PSO's Operating Margin of 15.77% is fine compared to the rest of the industry. PSO outperforms 77.92% of its industry peers.
In the last couple of years the Operating Margin of PSO has grown nicely.
PSO has a Gross Margin of 51.45%. This is comparable to the rest of the industry: PSO outperforms 55.84% of its industry peers.
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.
The number of shares outstanding for PSO has been reduced compared to 1 year ago.
Compared to 5 years ago, PSO has less shares outstanding
The debt/assets ratio for PSO is higher compared to a year ago.
2.2 Solvency
PSO has an Altman-Z score of 2.71. 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's Altman-Z score of 2.71 is fine compared to the rest of the industry. PSO outperforms 70.13% 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 Debt to FCF ratio of 2.42. This is in the better half of the industry: PSO outperforms 76.62% 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 45.45% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 2.42 | ||
| Altman-Z | 2.71 |
ROIC/WACC0.78
WACC11.08%
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 81.82% of its industry peers.
A Quick Ratio of 2.24 indicates that PSO has no problem at all paying its short term obligations.
PSO's Quick ratio of 2.24 is amongst the best of the industry. PSO outperforms 81.82% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.31 | ||
| Quick Ratio | 2.24 |
3. Growth
3.1 Past
PSO shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.29%.
Measured over the past 5 years, PSO shows a small growth in Earnings Per Share. The EPS has been growing by 1.15% on average per year.
PSO shows a decrease in Revenue. In the last year, the revenue decreased by -0.82%.
PSO shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.70% yearly.
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 7.68% on average over the next years.
The Revenue is expected to grow by 3.16% on average over the next years.
EPS Next Y3.45%
EPS Next 2Y7.01%
EPS Next 3Y8.36%
EPS Next 5Y7.68%
Revenue Next Year-0.33%
Revenue Next 2Y2.35%
Revenue Next 3Y3.06%
Revenue Next 5Y3.16%
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.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 15.84, PSO is valued correctly.
Based on the Price/Earnings ratio, PSO is valued a bit cheaper than the industry average as 71.43% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of PSO to the average of the S&P500 Index (26.15), we can say PSO is valued slightly cheaper.
With a Price/Forward Earnings ratio of 13.51, PSO is valued correctly.
71.43% of the companies in the same industry are more expensive than PSO, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 36.22. PSO is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.84 | ||
| Fwd PE | 13.51 |
4.2 Price Multiples
67.53% of the companies in the same industry are more expensive than PSO, based on the Enterprise Value to EBITDA ratio.
PSO's Price/Free Cash Flow ratio is rather cheap when compared to the industry. PSO is cheaper than 84.42% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.29 | ||
| EV/EBITDA | 9.62 |
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)4.59
PEG (5Y)13.76
EPS Next 2Y7.01%
EPS Next 3Y8.36%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.46%, PSO has a reasonable but not impressive dividend return.
PSO's Dividend Yield is rather good when compared to the industry average which is at 2.12. PSO pays more dividend than 94.81% of the companies in the same industry.
PSO's Dividend Yield is comparable with the S&P500 average which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.46% |
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.
The dividend of PSO decreased 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 2Y7.01%
EPS Next 3Y8.36%
13.15
+0.07 (+0.54%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners77.62%
Inst Owner Change-1.98%
Ins Owners0.2%
Ins Owner ChangeN/A
Market Cap8.37B
Revenue(TTM)3.52B
Net Income(TTM)441.00M
Analysts68.57
Price Target16.73 (27.22%)
Short Float %0.32%
Short Ratio2.78
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.46% |
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)-0.93%
PT rev (3m)-1.51%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)0.37%
EPS NY rev (3m)1.16%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)-0.14%
Revenue NY rev (3m)4.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.84 | ||
| Fwd PE | 13.51 | ||
| P/S | 1.8 | ||
| P/FCF | 10.29 | ||
| P/OCF | 8.52 | ||
| P/B | 1.77 | ||
| P/tB | 8.13 | ||
| EV/EBITDA | 9.62 |
EPS(TTM)0.83
EY6.31%
EPS(NY)0.97
Fwd EY7.4%
FCF(TTM)1.28
FCFY9.72%
OCF(TTM)1.54
OCFY11.74%
SpS7.3
BVpS7.45
TBVpS1.62
PEG (NY)4.59
PEG (5Y)13.76
Graham Number11.79
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 | 2.71 |
F-Score8
WACC11.08%
ROIC/WACC0.78
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 Y3.45%
EPS Next 2Y7.01%
EPS Next 3Y8.36%
EPS Next 5Y7.68%
Revenue 1Y (TTM)-0.82%
Revenue growth 3Y1.19%
Revenue growth 5Y-1.7%
Sales Q2Q%-1.82%
Revenue Next Year-0.33%
Revenue Next 2Y2.35%
Revenue Next 3Y3.06%
Revenue Next 5Y3.16%
EBIT growth 1Y9.47%
EBIT growth 3Y26.69%
EBIT growth 5Y5.08%
EBIT Next Year36.45%
EBIT Next 3Y14.89%
EBIT Next 5Y14.86%
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 6 / 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 15.84 and the Price/Book (PB) ratio is 1.77.
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 3.45% in the next year.