SM ENERGY CO (SM) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:SM - US78454L1008 - Common Stock
19.88 USD
+0.7 (+3.65%)
Overall SM gets a fundamental rating of 5 out of 10. We evaluated SM against 207 industry peers in the Oil, Gas & Consumable Fuels industry. SM scores excellent on profitability, but there are concerns on its financial health. SM is not valued too expensively and it also shows a decent growth rate. SM also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- SM had positive earnings in the past year.
- SM had a positive operating cash flow in the past year.
- Of the past 5 years SM 4 years were profitable.
- In the past 5 years SM always reported a positive cash flow from operatings.
1.2 Ratios
- The Return On Assets of SM (8.00%) is better than 82.13% of its industry peers.
- Looking at the Return On Equity, with a value of 15.43%, SM is in the better half of the industry, outperforming 79.23% of the companies in the same industry.
- SM's Return On Invested Capital of 10.83% is amongst the best of the industry. SM outperforms 86.47% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for SM is below the industry average of 21.94%.
- The last Return On Invested Capital (10.83%) for SM is well below the 3 year average (19.03%), which needs to be investigated, but indicates that SM had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8% | ||
| ROE | 15.43% | ||
| ROIC | 10.83% |
ROA(3y)13.75%
ROA(5y)5.32%
ROE(3y)25.61%
ROE(5y)8.13%
ROIC(3y)19.03%
ROIC(5y)N/A
1.3 Margins
- SM's Profit Margin of 22.03% is fine compared to the rest of the industry. SM outperforms 79.71% of its industry peers.
- SM's Profit Margin has improved in the last couple of years.
- SM has a Operating Margin of 30.85%. This is in the better half of the industry: SM outperforms 76.81% of its industry peers.
- SM's Operating Margin has improved in the last couple of years.
- The Gross Margin of SM (72.96%) is better than 83.57% of its industry peers.
- In the last couple of years the Gross Margin of SM has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.85% | ||
| PM (TTM) | 22.03% | ||
| GM | 72.96% |
OM growth 3Y-4.43%
OM growth 5Y58.54%
PM growth 3Y174.7%
PM growth 5YN/A
GM growth 3Y-1.85%
GM growth 5Y2.19%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so SM is creating value.
- The number of shares outstanding for SM has been reduced compared to 1 year ago.
- The number of shares outstanding for SM has been increased compared to 5 years ago.
- SM has a worse debt/assets ratio than last year.
2.2 Solvency
- Based on the Altman-Z score of 1.46, we must say that SM is in the distress zone and has some risk of bankruptcy.
- With a Altman-Z score value of 1.46, SM perfoms like the industry average, outperforming 53.62% of the companies in the same industry.
- A Debt/Equity ratio of 0.49 indicates that SM is not too dependend on debt financing.
- The Debt to Equity ratio of SM (0.49) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.46 |
ROIC/WACC1.38
WACC7.83%
2.3 Liquidity
- A Current Ratio of 0.56 indicates that SM may have some problems paying its short term obligations.
- SM has a Current ratio of 0.56. This is amonst the worse of the industry: SM underperforms 81.64% of its industry peers.
- A Quick Ratio of 0.56 indicates that SM may have some problems paying its short term obligations.
- The Quick ratio of SM (0.56) is worse than 77.78% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.56 | ||
| Quick Ratio | 0.56 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 0.46% over the past year.
- SM shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 54.53% yearly.
- The Revenue has grown by 34.93% in the past year. This is a very strong growth!
- SM shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.10% yearly.
EPS 1Y (TTM)0.46%
EPS 3Y54.53%
EPS 5YN/A
EPS Q2Q%-17.9%
Revenue 1Y (TTM)34.93%
Revenue growth 3Y0.85%
Revenue growth 5Y11.1%
Sales Q2Q%26.1%
3.2 Future
- SM is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -7.34% yearly.
- The Revenue is expected to grow by 5.00% on average over the next years.
EPS Next Y-16.59%
EPS Next 2Y-27.07%
EPS Next 3Y-8.42%
EPS Next 5Y-7.34%
Revenue Next Year20.58%
Revenue Next 2Y50.17%
Revenue Next 3Y41.79%
Revenue Next 5Y5%
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.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 3.06 indicates a rather cheap valuation of SM.
- Based on the Price/Earnings ratio, SM is valued cheaply inside the industry as 98.55% of the companies are valued more expensively.
- When comparing the Price/Earnings ratio of SM to the average of the S&P500 Index (28.60), we can say SM is valued rather cheaply.
- Based on the Price/Forward Earnings ratio of 5.51, the valuation of SM can be described as very cheap.
- Based on the Price/Forward Earnings ratio, SM is valued cheaply inside the industry as 97.58% of the companies are valued more expensively.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.83, SM is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 3.06 | ||
| Fwd PE | 5.51 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SM indicates a rather cheap valuation: SM is cheaper than 98.07% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 2.19 |
4.3 Compensation for Growth
- SM has an outstanding profitability rating, which may justify a higher PE ratio.
- A cheap valuation may be justified as SM's earnings are expected to decrease with -8.42% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-27.07%
EPS Next 3Y-8.42%
5. Dividend
5.1 Amount
- SM has a Yearly Dividend Yield of 4.27%, which is a nice return.
- Compared to an average industry Dividend Yield of 3.73, SM pays a bit more dividend than its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.82, SM pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.27% |
5.2 History
- On average, the dividend of SM grows each year by 49.05%, which is quite nice.
- SM has been paying a dividend for at least 10 years, so it has a reliable track record.
- SM has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)49.05%
Div Incr Years3
Div Non Decr Years4
5.3 Sustainability
- 12.60% of the earnings are spent on dividend by SM. This is a low number and sustainable payout ratio.
DP12.6%
EPS Next 2Y-27.07%
EPS Next 3Y-8.42%
SM ENERGY CO / SM FAQ
Can you provide the ChartMill fundamental rating for SM ENERGY CO?
ChartMill assigns a fundamental rating of 5 / 10 to SM.
What is the valuation status for SM stock?
ChartMill assigns a valuation rating of 6 / 10 to SM ENERGY CO (SM). This can be considered as Fairly Valued.
How profitable is SM ENERGY CO (SM) stock?
SM ENERGY CO (SM) has a profitability rating of 8 / 10.
How financially healthy is SM ENERGY CO?
The financial health rating of SM ENERGY CO (SM) is 2 / 10.
How sustainable is the dividend of SM ENERGY CO (SM) stock?
The dividend rating of SM ENERGY CO (SM) is 7 / 10 and the dividend payout ratio is 12.6%.