Grupo Aeroportuario del Pacifico SAB de CV Stock Shows Every Sign Of Being Fairly Valued

Author's Avatar
GF Value
Apr 13, 2021
Article's Main Image

The stock of Grupo Aeroportuario del Pacifico SAB de CV (NYSE:PAC, 30-year Financials) appears to be fairly valued, according to GuruFocus Value calculation. GuruFocus Value is GuruFocus' estimate of the fair value at which the stock should be traded. It is calculated based on the historical multiples that the stock has traded at, the past business growth and analyst estimates of future business performance. If the price of a stock is significantly above the GF Value Line, it is overvalued and its future return is likely to be poor. On the other hand, if it is significantly below the GF Value Line, its future return will likely be higher. At its current price of $105.11 per share and the market cap of $5.5 billion, Grupo Aeroportuario del Pacifico SAB de CV stock shows every sign of being fairly valued. GF Value for Grupo Aeroportuario del Pacifico SAB de CV is shown in the chart below.

Grupo Aeroportuario del Pacifico SAB de CV GF Value Chart

Because Grupo Aeroportuario del Pacifico SAB de CV is fairly valued, the long-term return of its stock is likely to be close to the rate of its business growth.

Link: These companies may deliever higher future returns at reduced risk.

Companies with poor financial strength offer investors a high risk of permanent capital loss. To avoid permanent capital loss, an investor must do their research and review a company's financial strength before deciding to purchase shares. Both the cash-to-debt ratio and interest coverage of a company are a great way to to understand its financial strength. Grupo Aeroportuario del Pacifico SAB de CV has a cash-to-debt ratio of 10000.00, which which ranks better than 100% of the companies in Transportation industry. The overall financial strength of Grupo Aeroportuario del Pacifico SAB de CV is 7 out of 10, which indicates that the financial strength of Grupo Aeroportuario del Pacifico SAB de CV is fair. This is the debt and cash of Grupo Aeroportuario del Pacifico SAB de CV over the past years:

debt and cash

It poses less risk to invest in profitable companies, especially those that have demonstrated consistent profitability over the long term. A company with high profit margins is also typically a safer investment than one with low profit margins. Grupo Aeroportuario del Pacifico SAB de CV has been profitable 10 over the past 10 years. Over the past twelve months, the company had a revenue of $547.7 million and earnings of $1.569 a share. Its operating margin is 32.19%, which ranks better than 94% of the companies in Transportation industry. Overall, GuruFocus ranks the profitability of Grupo Aeroportuario del Pacifico SAB de CV at 9 out of 10, which indicates strong profitability. This is the revenue and net income of Grupo Aeroportuario del Pacifico SAB de CV over the past years:

Revnue and Net Income

Growth is probably the most important factor in the valuation of a company. GuruFocus research has found that growth is closely correlated with the long term performance of a company's stock. The faster a company is growing, the more likely it is to be creating value for shareholders, especially if the growth is profitable. The 3-year average annual revenue growth rate of Grupo Aeroportuario del Pacifico SAB de CV is -1.4%, which ranks in the middle range of the companies in Transportation industry. The 3-year average EBITDA growth rate is -10.9%, which ranks worse than 81% of the companies in Transportation industry.

One can also evaluate a company's profitability by comparing its return on invested capital (ROIC) to its weighted average cost of capital (WACC). Return on invested capital (ROIC) measures how well a company generates cash flow relative to the capital it has invested in its business. The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. If the return on invested capital exceeds the weighted average cost of capital, the company is likely creating value for its shareholders. During the past 12 months, Grupo Aeroportuario del Pacifico SAB de CV's ROIC is 7.88 while its WACC came in at 15.21. The historical ROIC vs WACC comparison of Grupo Aeroportuario del Pacifico SAB de CV is shown below:

ROIC vs WACC

In closing, the stock of Grupo Aeroportuario del Pacifico SAB de CV (NYSE:PAC, 30-year Financials) gives every indication of being fairly valued. The company's financial condition is fair and its profitability is strong. Its growth ranks worse than 81% of the companies in Transportation industry. To learn more about Grupo Aeroportuario del Pacifico SAB de CV stock, you can check out its 30-year Financials here.

To find out the high quality companies that may deliever above average returns, please check out GuruFocus High Quality Low Capex Screener.

Rating:
0 / 5 (0 votes)
Author's Avatar