September 5, 2024
Top 10 Stock Pinnacle West Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Pinnacle West – Top 10 Stock in Nuclear Energy
Pinnacle West is listed as a top 10 stock on September 05, 2024 in the market index Nuclear because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low. Based on the Obermatt 360° View of 95 (top 95% performer), Obermatt assesses an overall strong buy recommendation for Pinnacle West on September 05, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Electric Utilities |
| Index | Low Emissions, Dividends USA, Employee Focus US, Energy Efficient, Nuclear, Recycling, Water Efficiency, S&P 500 |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Pinnacle West Strong Buy
| 360 METRICS | September 5, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 59 |
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| GROWTH | ||||||||
| GROWTH | 83 |
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| SAFETY | ||||||||
| SAFETY | 45 |
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| SENTIMENT | ||||||||
| SENTIMENT | 81 |
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| 360° VIEW | ||||||||
| 360° VIEW | 95 |
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ANALYSIS: With an Obermatt 360° View of 95 (better than 95% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Pinnacle West are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Pinnacle West. The consolidated Value Rank has an attractive rank of 59, which means that the share price of Pinnacle West is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 59% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 83, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 81. But the company’s financing is risky with a Safety rank of 45. This means 55% of comparable companies have a safer financing structure than Pinnacle West. ...read more
RECOMMENDATION: With a consolidated 360° View of 95, Pinnacle West is better positioned than 95% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 59), above-average growth (Growth Rank of 83), and positive market sentiment in the professional investor community (Sentiment Rank of 81), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 45), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Pinnacle West is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Pinnacle West very positive
ANALYSIS: With an Obermatt Sentiment Rank of 81 (better than 81% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Pinnacle West is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Pinnacle West. Analyst Opinions are at a rank of 78 (better than 78% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 63, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Pinnacle West. The Professional Investors rank is 63, which means that currently, professional investors hold more stock in this company than in 63% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 62 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 62% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 81 (more positive than 81% compared with investment alternatives), Pinnacle West has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Pinnacle West stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Pinnacle West Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 59 (better than 59% compared with alternatives), Pinnacle West shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where three out of four indicators are above average for Pinnacle West. Price-to-Sales (P/S) is 54 which means that the stock price compared with what market professionals expect for future sales is lower than for 54% of comparable companies, indicating a good value for Pinnacle West's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 75. Finally, compared with other companies in the same industry, dividend yields of Pinnacle West are expected to be higher than for 65% of all competitors (a Dividend Yield rank of 65). The only low rank is for expected profits with a Price-to-Profit Rank of 35, indicating that the market expects the company's profit to be low despite a high dividend. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 59, is a buy recommendation based on Pinnacle West's stock price compared with the company's operational size and dividend yields. The low Profit Rank could result from a one-off charge, for instance, for an accident, a legal settlement, or a restructuring project. If the company keeps its dividends high, the low expected profit may be transitory. If that is the case, the three good value ranks for Sales, Capital, and Dividends are reliable indicators for good stock price value, a low stock price. ...read more
Growth Strategy: Pinnacle West Growth Momentum high
| GROWTH METRICS | September 5, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 55 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 81 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 63 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 69 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 83 |
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ANALYSIS: With an Obermatt Growth Rank of 83 (better than 83% compared with alternatives) for 2024, Pinnacle West shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for Pinnacle West. Sales Growth has a value of 55, which means that, currently, professionals expect the company to grow more than 55% of its competitors. The same is valid for Profit Growth with a value of 81 and for Capital Growth with 63. In addition, Stock Returns had an above-average rank value of 69, which means they have been higher than 69% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 83, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Pinnacle West exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: Pinnacle West Debt Financing Safety below-average
| SAFETY METRICS | September 5, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 56 |
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| REFINANCING | ||||||||
| REFINANCING | 11 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 75 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 45 |
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ANALYSIS: With an Obermatt Safety Rank of 45 (better than 45% compared with alternatives), the company Pinnacle West has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Pinnacle West is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Pinnacle West. Leverage is at a rank of 56, meaning the company has a below-average debt-to-equity ratio. It has less debt than 56% of its competitors. Liquidity is also good at a rank of 75, meaning the company generates more profit to service its debt than 75% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 11, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 89% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 45 (worse than 55% compared with alternatives), Pinnacle West has a financing structure that is riskier than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Pinnacle West. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: Pinnacle West Top Financial Performance
| COMBINED PERFORMANCE | September 5, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 59 |
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| GROWTH | ||||||||
| GROWTH | 83 |
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| SAFETY | ||||||||
| SAFETY | 75 |
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| COMBINED | ||||||||
| COMBINED | 83 |
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ANALYSIS: With an Obermatt Combined Rank of 83 (better than 83% compared with investment alternatives), Pinnacle West (Electric Utilities, USA) shares have much better financial characteristics than comparable stocks. Shares of Pinnacle West are a good value (attractively priced) with a consolidated Value Rank of 59 (better than 59% of alternatives), show above-average growth (Growth Rank of 83) but are riskily financed (Safety Rank of 45), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 83, is a strong buy recommendation based on Pinnacle West's financial characteristics. As the company Pinnacle West's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 59) and above-average growth (Obermatt Growth Rank of 83), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 45) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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