May 25, 2023
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 Employee Satisfaction Leaders in the United States
Pinnacle West is listed as a top 10 stock on May 25, 2023 in the market index Employee Focus US 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 from a financial fact perspective where only investor sentiment is a reason for caution. Based on the Obermatt 360° View of 86 (top 86% performer), Obermatt assesses an overall strong buy recommendation for Pinnacle West on May 25, 2023.
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° Assessment Pinnacle West Strong Buy
| 360 METRICS | May 25, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 74 |
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| GROWTH | ||||||||
| GROWTH | 77 |
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| SAFETY | ||||||||
| SAFETY | 83 |
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| SENTIMENT | ||||||||
| SENTIMENT | 30 |
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| 360° VIEW | ||||||||
| 360° VIEW | 86 |
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ANALYSIS: With an Obermatt 360° View of 86 (better than 86% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Pinnacle West are very positive. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators above average for Pinnacle West. The consolidated Value Rank has an attractive rank of 74, which means that the share price of Pinnacle West is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 74% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 77, 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. The company is also safely financed with a Safety Rank of 83. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of only 30. Professional investors are more confident in 70% other stocks. ...read more
RECOMMENDATION: With a 360° View of 86, Pinnacle West is better than 86% 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 74), above-average growth (Growth Rank of 77) and an indication that the company is safely financed (Safety Rank of 83), 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 professional market sentiment is on the riskier side (Sentiment Rank of 30), but that could also mean an overreaction to negative news in the past. Good value is sometimes an indication that the company's future is challenging. If they have been enjoying above average growth and are still a good value, this may not continue. We recommend evaluating whether the future of Pinnacle West is as challenging as the low price of the stock despite good growth and safe financing practices suggest. Since the professional community is pessimistic, you may want to reflect these negative opinions in light of what you find reasonable to expect for the future. If you believe this pessimistic view is transitory, you have a solid investment case based on current financial factors. ...read more
Sentiment Strategy: Professional Market Sentiment for Pinnacle West only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 30 (better than 30% compared with alternatives), overall professional sentiment and engagement for the stock Pinnacle West is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Pinnacle West. Analyst Opinions are at a rank of 11 (worse than 89% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 28, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 74, which means that professional investors hold more stock in this company than in 74% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 71, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 71% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to Pinnacle West and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 30 (less encouraging than 70% compared with investment alternatives), Pinnacle West has a reputation among professional investors that is below that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical, while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Pinnacle West Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 74 (better than 74% 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 57 which means that the stock price compared with what market professionals expect for future sales is lower than for 57% 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 74. Finally, compared with other companies in the same industry, dividend yields of Pinnacle West are expected to be higher than for 80% of all competitors (an Dividend Yield rank of 80). The only low rank is for expected profits with a Price-to-Profit Rank of 39, 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 74, 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
ANALYSIS: With an Obermatt Growth Rank of 77 (better than 77% compared with alternatives) for 2023, 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 but one indicator above average for Pinnacle West. Sales Growth has a rank of 86 which means that currently, professionals expect the company to grow more than 86% of its competitors. Capital Growth is also above 14% of competitors with a rank of 60, and Stock Returns with the rank of 95 is also an outperformance. Only Profit Growth is low with a rank of 14 which means that currently, professionals expect the company to grow its profits less than 86% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 77, is a BUY recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communications about extra growth efforts costing time and money. If that is the case, Pinnacle West is a good growth stock. ...read more
Safety Strategy: Pinnacle West Debt Financing Safety very solid
| SAFETY METRICS | May 25, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 64 |
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| REFINANCING | ||||||||
| REFINANCING | 67 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 79 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 83 |
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ANALYSIS: With an Obermatt Safety Rank of 83 (better than 83% compared with alternatives) for 2023, the company Pinnacle West has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Pinnacle West is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for Pinnacle West. Leverage is at 64, meaning the company has a below-average debt-to-equity ratio. It has less debt than 64% of its competitors. Refinancing is at a rank of 67, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 67% of its competitors. Finally, Liquidity is also good at a rank of 79, which means that the company generates more profit to service its debt than 79% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 83 (better than 83% compared with alternatives), Pinnacle West has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Pinnacle West Top Financial Performance
| COMBINED PERFORMANCE | May 25, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 74 |
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| GROWTH | ||||||||
| GROWTH | 77 |
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| SAFETY | ||||||||
| SAFETY | 79 |
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| COMBINED | ||||||||
| COMBINED | 96 |
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ANALYSIS: With an Obermatt Combined Rank of 96 (better than 96% 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 Obermatt Value Rank of 74 (better than 74% of alternatives), show above-average growth (Growth Rank of 77), and are safely financed (Safety Rank of 83), which means low debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 96, is a strong buy recommendation based on Pinnacle West's financial characteristics. As the company Pinnacle West's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 74), above-average growth (Obermatt Growth Rank of 77), and indicate that the company is safely financed (Obermatt Safety Rank of 83), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of Pinnacle West. 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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