SM ENERGY CO (SM)

US78454L1008 - Common Stock

48.9  +0.81 (+1.68%)

Fundamental Rating

5

Overall SM gets a fundamental rating of 5 out of 10. We evaluated SM against 214 industry peers in the Oil, Gas & Consumable Fuels industry. While SM belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. SM has a valuation in line with the averages, but on the other hand it scores bad on growth.



7

1. Profitability

1.1 Basic Checks

In the past year SM was profitable.
In the past year SM had a positive cash flow from operations.
In multiple years SM reported negative net income over the last 5 years.
Each year in the past 5 years SM had a positive operating cash flow.

1.2 Ratios

With a decent Return On Assets value of 12.82%, SM is doing good in the industry, outperforming 72.30% of the companies in the same industry.
With a decent Return On Equity value of 22.62%, SM is doing good in the industry, outperforming 67.61% of the companies in the same industry.
SM has a Return On Invested Capital of 13.52%. This is in the better half of the industry: SM outperforms 70.89% of its industry peers.
SM had an Average Return On Invested Capital over the past 3 years of 22.74%. This is significantly below the industry average of 45.80%.
The last Return On Invested Capital (13.52%) for SM is well below the 3 year average (22.74%), which needs to be investigated, but indicates that SM had better years and this may not be a problem.
Industry RankSector Rank
ROA 12.82%
ROE 22.62%
ROIC 13.52%
ROA(3y)10.99%
ROA(5y)2.93%
ROE(3y)20.14%
ROE(5y)3.14%
ROIC(3y)22.74%
ROIC(5y)N/A

1.3 Margins

The Profit Margin of SM (34.45%) is better than 76.06% of its industry peers.
In the last couple of years the Profit Margin of SM has grown nicely.
SM has a Operating Margin of 38.70%. This is in the better half of the industry: SM outperforms 70.89% of its industry peers.
SM's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 76.26%, SM belongs to the best of the industry, outperforming 81.69% of the companies in the same industry.
In the last couple of years the Gross Margin of SM has grown nicely.
Industry RankSector Rank
OM 38.7%
PM (TTM) 34.45%
GM 76.26%
OM growth 3YN/A
OM growth 5Y16.37%
PM growth 3YN/A
PM growth 5Y2.14%
GM growth 3Y5.32%
GM growth 5Y1.65%

6

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), SM is creating value.
SM has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, SM has more shares outstanding
The debt/assets ratio for SM has been reduced compared to a year ago.

2.2 Solvency

SM has an Altman-Z score of 2.55. This is not the best score and indicates that SM is in the grey zone with still only limited risk for bankruptcy at the moment.
SM has a better Altman-Z score (2.55) than 66.20% of its industry peers.
The Debt to FCF ratio of SM is 3.32, which is a good value as it means it would take SM, 3.32 years of fcf income to pay off all of its debts.
SM has a Debt to FCF ratio of 3.32. This is in the better half of the industry: SM outperforms 65.73% of its industry peers.
A Debt/Equity ratio of 0.44 indicates that SM is not too dependend on debt financing.
SM has a Debt to Equity ratio (0.44) which is comparable to the rest of the industry.
Industry RankSector Rank
Debt/Equity 0.44
Debt/FCF 3.32
Altman-Z 2.55
ROIC/WACC1.64
WACC8.24%

2.3 Liquidity

A Current Ratio of 1.45 indicates that SM should not have too much problems paying its short term obligations.
SM has a better Current ratio (1.45) than 63.38% of its industry peers.
A Quick Ratio of 1.45 indicates that SM should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.45, SM is doing good in the industry, outperforming 69.48% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 1.45
Quick Ratio 1.45

3

3. Growth

3.1 Past

SM shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -18.54%.
Measured over the past years, SM shows a very strong growth in Earnings Per Share. The EPS has been growing by 187.86% on average per year.
SM shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -29.32%.
The Revenue has been growing slightly by 7.67% on average over the past years.
EPS 1Y (TTM)-18.54%
EPS 3YN/A
EPS 5Y187.86%
EPS growth Q2Q23.26%
Revenue 1Y (TTM)-29.32%
Revenue growth 3Y28.2%
Revenue growth 5Y7.67%
Revenue growth Q2Q-9.32%

3.2 Future

The Earnings Per Share is expected to grow by 8.45% on average over the next years. This is quite good.
The Revenue is expected to grow by 2.69% on average over the next years.
EPS Next Y2.49%
EPS Next 2Y9.28%
EPS Next 3Y8.45%
EPS Next 5YN/A
Revenue Next Year3.42%
Revenue Next 2Y5.9%
Revenue Next 3Y2.69%
Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

5

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 8.25, the valuation of SM can be described as very reasonable.
69.01% of the companies in the same industry are more expensive than SM, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 24.75, SM is valued rather cheaply.
With a Price/Forward Earnings ratio of 8.05, the valuation of SM can be described as very reasonable.
Based on the Price/Forward Earnings ratio, SM is valued a bit cheaper than the industry average as 77.00% of the companies are valued more expensively.
SM is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.23, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 8.25
Fwd PE 8.05

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, SM is valued a bit cheaper than the industry average as 77.00% of the companies are valued more expensively.
SM's Price/Free Cash Flow is on the same level as the industry average.
Industry RankSector Rank
P/FCF 11.84
EV/EBITDA 4.03

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
SM has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)3.32
PEG (5Y)0.04
EPS Next 2Y9.28%
EPS Next 3Y8.45%

4

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 1.50%, SM has a reasonable but not impressive dividend return.
SM's Dividend Yield is slightly below the industry average, which is at 5.79.
Compared to the average S&P500 Dividend Yield of 2.45, SM is paying slightly less dividend.
Industry RankSector Rank
Dividend Yield 1.5%

5.2 History

The dividend of SM is nicely growing with an annual growth rate of 43.22%!
SM has paid a dividend for at least 10 years, which is a reliable track record.
SM has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)43.22%
Div Incr Years2
Div Non Decr Years3

5.3 Sustainability

SM pays out 8.76% of its income as dividend. This is a sustainable payout ratio.
The dividend of SM is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP8.76%
EPS Next 2Y9.28%
EPS Next 3Y8.45%

SM ENERGY CO

NYSE:SM (4/22/2024, 11:51:08 AM)

48.9

+0.81 (+1.68%)

Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap5.62B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 1.5%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 8.25
Fwd PE 8.05
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)3.32
PEG (5Y)0.04
Profitability
Industry RankSector Rank
ROA 12.82%
ROE 22.62%
ROCE
ROIC
ROICexc
ROICexgc
OM 38.7%
PM (TTM) 34.45%
GM 76.26%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.37
Health
Industry RankSector Rank
Debt/Equity 0.44
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 1.45
Quick Ratio 1.45
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-18.54%
EPS 3YN/A
EPS 5Y
EPS growth Q2Q
EPS Next Y2.49%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-29.32%
Revenue growth 3Y28.2%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y