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Pinnacle West Capital Corp
PNW : NYSE : Utilities
$70.01 | %
Today's Range: 69.63 - 70.70
Avg. Daily Volume: 906,500
12/26/14 - 4:02 PM ET

Financial Analysis


PINNACLE WEST CAPITAL CORP's gross profit margin for the third quarter of its fiscal year 2014 is essentially unchanged when compared to the same period a year ago. The company has grown sales and net income during the past quarter when compared with the same quarter a year ago, however, it was unable to keep up with the growth of the average competitor within its industry. PINNACLE WEST CAPITAL CORP has very weak liquidity. Currently, the Quick Ratio is 0.27 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity decreased from the same period a year ago, despite already having very weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has increased by 5.05% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q3 FY14 Q3 FY13
Net Sales ($mil)1172.671152.39
EBITDA ($mil)525.44523.08
EBIT ($mil)421.78415.69
Net Income ($mil)243.96226.16


Balance Sheet Q3 FY14 Q3 FY13
Cash & Equiv. ($mil)10.47135.46
Total Assets ($mil)13980.3513822.67
Total Debt ($mil)3425.793386.8
Equity ($mil)4491.924275.8


Profitability Q3 FY14 Q3 FY13
Gross Profit Margin44.8145.39
EBITDA Margin44.845.39
Operating Margin35.9736.07
Sales Turnover0.250.25
Return on Assets2.972.92
Return on Equity9.279.55
Debt Q3 FY14 Q3 FY13
Current Ratio0.720.93
Debt/Capital0.430.44
Interest Expense47.6350.59
Interest Coverage8.868.22


Share Data Q3 FY14 Q3 FY13
Shares outstanding (mil)110.45110.04
Div / share0.570.55
EPS2.22.04
Book value / share40.6738.86
Institutional Own % n/a n/a
Avg Daily Volume919622.0926514.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 18.24 for the Electric Utilities industry and a discount compared to the S&P 500 average of 19.99. Conducting a second comparison, its price-to-book ratio of 1.65 indicates a discount versus the S&P 500 average of 2.76 and a premium versus the industry average of 1.64. The current price-to-sales ratio is above both the S&P 500 average and the industry average, indicating a premium.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
PNW 17.94 Peers 18.24   PNW 6.42 Peers 6.75

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

PNW is trading at a valuation on par with its peers.

 

Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

PNW is trading at a valuation on par to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
PNW 17.48 Peers 16.57   PNW 16.46 Peers 1.69

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

PNW is trading at a valuation on par with its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

PNW trades at a significant premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
PNW 1.65 Peers 1.64   PNW 1.90 Peers 45.69

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

PNW is trading at a valuation on par with its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, PNW is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
PNW 2.14 Peers 1.90   PNW 0.49 Peers 4.46

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

PNW is trading at a premium to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

PNW significantly trails its peers on the basis of sales growth

 

 

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