* Note: Prices are in Million (M) USD.
Description:
Pinnacle West Capital is a utility holding company that owns Arizona Public Service and Bright Canyon Energy.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $19 M
Debt : $10,454 M
EBITDA : $2,069 M
Net Debt (Debt - Cash): $10,435 M
Since EBITDA cannot cover net debt within 3 years, Avoid This Stock.
This criteria used industry in which company operates:
Sector: Utilities
Industry: Utilities - regulated electric
Based on industry, 3 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 19.77
Since Forward PE Ratio is between 15 - 20, 3 points assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Error: Invalid cash flow data provided.Using default values for calculation.
Based on default values, 1 points assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $5,125 M
Revenue 5 Years Ago (2019-12-31): $3,471 M
Total Growth over 5 Years: 47.6%
5-Year Revenue CAGR (Historical): 8.1%
Forward 5-Year CAGR (Tapered): 6.5%
Since historical Revenue CAGR is between 5 - 10, 2 points assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $116 M
Share Count 5 Years Ago (2020-12-31): $113 M
Company is not buying back its own shares, 0 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $4.63
Trailing 12-Month Earnings Per Share (EPS): $4.56
Average Earnings Per Share (EPS): $4.59
Dividend Per Share (DPS): $4
Payout Ratio: 78%
Dividend Yield: 4%
⚠️ Caution: Further research is recommended — dividend payout ratio is too high (78%).
Since company Payout Ratio is greater than 50, 1 point assigned.
Since Dividend Yield is greater than 4, 4 points assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 20 valid ROE years (max 20).Average ROE: 8.6%
Since Average ROE is less than 10, 1 point assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $90.82
52-Week Low: $79.08
Threshold Price (15% Above 52-Week Low): $90.94
Since Current price is within 15% threshold, 5 points assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $10,532 M
Since Market Cap is between 10B - 100B, 2 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 3% exposure of Total Portfolio.
Warren Buffett's Owners' Earnings:
No positive free cash flow found (TTM or annual) to compute Owners' Earnings per share.
Note: Many fast-growing companies reinvest heavily, so Owners' Earnings may appear low.
Consider other factors in your valuation.
Value-Trade has assigned 22 points to above Pinnacle West Capital Corp (PNW) stock.
Fair Value PE
15, Industry Based PE
15, Growth Based PE
15, ROE Based PE
8.64, Risk-Free Anchored PE (25% MoS)
18.2. Based on these 5 values, average assigned is
14.37. Value-Trades has assined P/E value
14.37. An average (Current Year EPS + Next Year EPS) earning per share is
$4.5928.
Fair value using multiple P/Es (blended): $65.99 (PE 14.37 × EPS $4.59)
So the Final Fair Value is: $65.99
Understanding the Value-Trades P/E Blend (click to expand)
▾
What goes into the blended P/E?
- 20-Year Avg P/E — Long-run market baseline; conservative anchor.
- Fair Value P/E — Score-based (cash, debt, sector, etc.).
- Industry P/E — Peer group norm.
- Growth-Based P/E — Uses tapered growth rates, floored at 15.
- RCFC-Based P/E — Maps cash conversion efficiency.
- ROE-Based P/E — Higher ROE supports higher multiples.
- Risk-Free Anchored P/E — Macro floor tied to 10y yield w/ MoS.
How it works
- Extreme values are clamped/filtered (IQR method).
- Anchors (20y avg, RCFC/ROE, risk-free) are always kept if valid.
- Final fair value = min(Blended PE × EPS, Avg PE × EPS).
P/E Reference Summary
Using EPS: $4.59
| Source |
P/E Ratio |
Implied Fair Value |
| Value-Trades Assigned | 14.37 | $66.00 |
