SONIC AUTOMOTIVE INC-CLASS A (SAH) Stock Fundamental Analysis
NYSE:SAH - New York Stock Exchange, Inc. - US83545G1022 - Common Stock - Currency: USD
SAH gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 121 industry peers in the Specialty Retail industry. While SAH is still in line with the averages on profitability rating, there are concerns on its financial health. SAH has a correct valuation and a medium growth rate. Finally SAH also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year SAH was profitable.
In the past year SAH had a positive cash flow from operations.
SAH had positive earnings in 4 of the past 5 years.
SAH had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 4.16%, SAH is doing good in the industry, outperforming 65.29% of the companies in the same industry.
SAH has a better Return On Equity (22.42%) than 80.17% of its industry peers.
SAH has a Return On Invested Capital of 7.76%. This is in the better half of the industry: SAH outperforms 67.77% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for SAH is below the industry average of 12.74%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.16% | ||
| ROE | 22.42% | ||
| ROIC | 7.76% |
ROA(3y)2.92%
ROA(5y)2.88%
ROE(3y)16.73%
ROE(5y)15.27%
ROIC(3y)8.98%
ROIC(5y)8.83%
1.3 Margins
SAH's Profit Margin of 1.69% is in line compared to the rest of the industry. SAH outperforms 55.37% of its industry peers.
In the last couple of years the Profit Margin of SAH has grown nicely.
SAH has a Operating Margin (3.48%) which is comparable to the rest of the industry.
SAH's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 15.34%, SAH is doing worse than 89.26% of the companies in the same industry.
In the last couple of years the Gross Margin of SAH has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.48% | ||
| PM (TTM) | 1.69% | ||
| GM | 15.34% |
OM growth 3Y-9.02%
OM growth 5Y0.78%
PM growth 3Y-18.59%
PM growth 5Y1.97%
GM growth 3Y-0.06%
GM growth 5Y1.16%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so SAH is still creating some value.
SAH has more shares outstanding than it did 1 year ago.
The number of shares outstanding for SAH has been reduced compared to 5 years ago.
The debt/assets ratio for SAH has been reduced compared to a year ago.
2.2 Solvency
SAH has an Altman-Z score of 3.44. This indicates that SAH is financially healthy and has little risk of bankruptcy at the moment.
SAH has a better Altman-Z score (3.44) than 77.69% of its industry peers.
SAH has a debt to FCF ratio of 82.25. This is a negative value and a sign of low solvency as SAH would need 82.25 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 82.25, SAH is in line with its industry, outperforming 41.32% of the companies in the same industry.
SAH has a Debt/Equity ratio of 3.40. This is a high value indicating a heavy dependency on external financing.
SAH's Debt to Equity ratio of 3.40 is on the low side compared to the rest of the industry. SAH is outperformed by 76.03% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.4 | ||
| Debt/FCF | 82.25 | ||
| Altman-Z | 3.44 |
ROIC/WACC0.89
WACC8.7%
2.3 Liquidity
SAH has a Current Ratio of 1.09. This is a normal value and indicates that SAH is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.09, SAH is not doing good in the industry: 71.07% of the companies in the same industry are doing better.
SAH has a Quick Ratio of 1.09. This is a bad value and indicates that SAH is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.38, SAH is not doing good in the industry: 66.12% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.38 |
3. Growth
3.1 Past
The earnings per share for SAH have decreased strongly by -16.37% in the last year.
The Earnings Per Share has been growing by 16.23% on average over the past years. This is quite good.
SAH shows a small growth in Revenue. In the last year, the Revenue has grown by 1.59%.
SAH shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.35% yearly.
EPS 1Y (TTM)-16.37%
EPS 3Y-12.92%
EPS 5Y16.23%
EPS Q2Q%8.82%
Revenue 1Y (TTM)1.59%
Revenue growth 3Y4.69%
Revenue growth 5Y6.35%
Sales Q2Q%7.9%
3.2 Future
Based on estimates for the next years, SAH will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.18% on average per year.
SAH is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.21% yearly.
EPS Next Y11.33%
EPS Next 2Y11.79%
EPS Next 3Y12.93%
EPS Next 5Y15.18%
Revenue Next Year5.36%
Revenue Next 2Y4.52%
Revenue Next 3Y5.91%
Revenue Next 5Y8.21%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same 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
SAH is valuated reasonably with a Price/Earnings ratio of 11.74.
SAH's Price/Earnings ratio is a bit cheaper when compared to the industry. SAH is cheaper than 79.34% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 25.82, SAH is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 9.59, the valuation of SAH can be described as reasonable.
SAH's Price/Forward Earnings ratio is rather cheap when compared to the industry. SAH is cheaper than 81.82% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of SAH to the average of the S&P500 Index (21.76), we can say SAH is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.74 | ||
| Fwd PE | 9.59 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SAH indicates a somewhat cheap valuation: SAH is cheaper than 69.42% of the companies listed in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as SAH.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 49.25 | ||
| EV/EBITDA | 6.5 |
4.3 Compensation for Growth
SAH's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as SAH's earnings are expected to grow with 12.93% in the coming years.
PEG (NY)1.04
PEG (5Y)0.72
EPS Next 2Y11.79%
EPS Next 3Y12.93%
5. Dividend
5.1 Amount
SAH has a Yearly Dividend Yield of 2.09%. Purely for dividend investing, there may be better candidates out there.
SAH's Dividend Yield is rather good when compared to the industry average which is at 5.22. SAH pays more dividend than 80.99% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, SAH has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.09% |
5.2 History
The dividend of SAH is nicely growing with an annual growth rate of 27.13%!
SAH has been paying a dividend for at least 10 years, so it has a reliable track record.
SAH has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)27.13%
Div Incr Years4
Div Non Decr Years14
5.3 Sustainability
17.38% of the earnings are spent on dividend by SAH. This is a low number and sustainable payout ratio.
SAH's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP17.38%
EPS Next 2Y11.79%
EPS Next 3Y12.93%
67.14
-0.07 (-0.1%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners69.6%
Inst Owner Change2.21%
Ins Owners29.12%
Ins Owner Change-2.09%
Market Cap2.28B
Analysts76.92
Price Target71.25 (6.12%)
Short Float %10.62%
Short Ratio5.71
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.09% |
Yearly Dividend1.2
Dividend Growth(5Y)27.13%
DP17.38%
Div Incr Years4
Div Non Decr Years14
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.9%
Min EPS beat(2)1.52%
Max EPS beat(2)2.28%
EPS beat(4)3
Avg EPS beat(4)-0.83%
Min EPS beat(4)-12.77%
Max EPS beat(4)5.65%
EPS beat(8)6
Avg EPS beat(8)1%
EPS beat(12)7
Avg EPS beat(12)-1.69%
EPS beat(16)10
Avg EPS beat(16)5.48%
Revenue beat(2)2
Avg Revenue beat(2)4.97%
Min Revenue beat(2)3.11%
Max Revenue beat(2)6.82%
Revenue beat(4)2
Avg Revenue beat(4)0.69%
Min Revenue beat(4)-4.59%
Max Revenue beat(4)6.82%
Revenue beat(8)4
Avg Revenue beat(8)0%
Revenue beat(12)5
Avg Revenue beat(12)-1.91%
Revenue beat(16)7
Avg Revenue beat(16)-1.2%
PT rev (1m)-12.21%
PT rev (3m)3.82%
EPS NQ rev (1m)1.92%
EPS NQ rev (3m)-0.33%
EPS NY rev (1m)-0.87%
EPS NY rev (3m)-0.38%
Revenue NQ rev (1m)2.66%
Revenue NQ rev (3m)1.98%
Revenue NY rev (1m)0.47%
Revenue NY rev (3m)1.72%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.74 | ||
| Fwd PE | 9.59 | ||
| P/S | 0.16 | ||
| P/FCF | 49.25 | ||
| P/OCF | 9.71 | ||
| P/B | 2.09 | ||
| P/tB | 7.52 | ||
| EV/EBITDA | 6.5 |
EPS(TTM)5.72
EY8.52%
EPS(NY)7
Fwd EY10.42%
FCF(TTM)1.36
FCFY2.03%
OCF(TTM)6.91
OCFY10.3%
SpS426.73
BVpS32.12
TBVpS8.92
PEG (NY)1.04
PEG (5Y)0.72
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.16% | ||
| ROE | 22.42% | ||
| ROCE | 15.52% | ||
| ROIC | 7.76% | ||
| ROICexc | 7.86% | ||
| ROICexgc | 9.3% | ||
| OM | 3.48% | ||
| PM (TTM) | 1.69% | ||
| GM | 15.34% | ||
| FCFM | 0.32% |
ROA(3y)2.92%
ROA(5y)2.88%
ROE(3y)16.73%
ROE(5y)15.27%
ROIC(3y)8.98%
ROIC(5y)8.83%
ROICexc(3y)9.23%
ROICexc(5y)9.2%
ROICexgc(3y)10.85%
ROICexgc(5y)10.93%
ROCE(3y)16.97%
ROCE(5y)16.85%
ROICexcg growth 3Y-14.51%
ROICexcg growth 5Y-0.73%
ROICexc growth 3Y-12.08%
ROICexc growth 5Y-0.71%
OM growth 3Y-9.02%
OM growth 5Y0.78%
PM growth 3Y-18.59%
PM growth 5Y1.97%
GM growth 3Y-0.06%
GM growth 5Y1.16%
F-Score5
Asset Turnover2.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.4 | ||
| Debt/FCF | 82.25 | ||
| Debt/EBITDA | 5.82 | ||
| Cap/Depr | 141.41% | ||
| Cap/Sales | 1.3% | ||
| Interest Coverage | 2.54 | ||
| Cash Conversion | 36.84% | ||
| Profit Quality | 18.93% | ||
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.38 | ||
| Altman-Z | 3.44 |
F-Score5
WACC8.7%
ROIC/WACC0.89
Cap/Depr(3y)168.98%
Cap/Depr(5y)194.01%
Cap/Sales(3y)1.45%
Cap/Sales(5y)1.61%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-16.37%
EPS 3Y-12.92%
EPS 5Y16.23%
EPS Q2Q%8.82%
EPS Next Y11.33%
EPS Next 2Y11.79%
EPS Next 3Y12.93%
EPS Next 5Y15.18%
Revenue 1Y (TTM)1.59%
Revenue growth 3Y4.69%
Revenue growth 5Y6.35%
Sales Q2Q%7.9%
Revenue Next Year5.36%
Revenue Next 2Y4.52%
Revenue Next 3Y5.91%
Revenue Next 5Y8.21%
EBIT growth 1Y-0.02%
EBIT growth 3Y-4.75%
EBIT growth 5Y7.18%
EBIT Next Year29.6%
EBIT Next 3Y14.27%
EBIT Next 5Y13.28%
FCF growth 1Y153.9%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y96.32%
OCF growth 3Y-29.11%
OCF growth 5Y-8.59%