Investors Met With Slowing Returns on Capital At Evergy (NYSE:EVRG)
If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an...
Has the U.S. Electric Utilities Industry valuation changed over the past few years?
|Sun, 28 Nov 2021||US$680.2b||US$259.0b||US$25.7b||21.8x|
|Tue, 26 Oct 2021||US$679.2b||US$250.5b||US$24.6b||21.1x|
|Thu, 23 Sep 2021||US$661.9b||US$250.9b||US$25.4b||21.6x|
|Sat, 21 Aug 2021||US$702.9b||US$250.9b||US$25.4b||22x|
|Sat, 05 Jun 2021||US$647.0b||US$243.4b||US$23.1b||20.5x|
|Tue, 09 Mar 2021||US$584.5b||US$231.2b||US$21.3b||19x|
|Mon, 30 Nov 2020||US$617.8b||US$230.6b||US$22.0b||20x|
|Thu, 03 Sep 2020||US$554.2b||US$213.4b||US$28.0b||19.2x|
|Sun, 07 Jun 2020||US$571.2b||US$233.9b||US$22.0b||20.6x|
|Sat, 29 Feb 2020||US$600.3b||US$236.8b||US$24.9b||22.5x|
|Tue, 03 Dec 2019||US$581.7b||US$227.9b||US$14.1b||23.1x|
|Fri, 06 Sep 2019||US$575.7b||US$227.8b||US$15.8b||23.3x|
|Mon, 10 Jun 2019||US$533.2b||US$228.5b||US$15.9b||21.8x|
|Sun, 03 Mar 2019||US$519.8b||US$228.1b||US$17.4b||21.6x|
|Wed, 05 Dec 2018||US$504.9b||US$227.0b||US$27.4b||20.9x|
Current Industry PE: Investors are relatively neutral on the industry at the moment, considering it's trading close to its 3-year average PE ratio of 21.2x. It appears they believe that earnings will grow in-line with historical growth rates.
Past Earnings Growth: The earnings for companies in the Electric Utilities industry have declined 2.1% per year over the last three years, while revenues for these companies have grown 4.5% per year. This means that although more sales are being generated, either the cost of doing business or the level of investment back into businesses has increased, which has decreased profits.
Which industries have driven the changes within the U.S. Electric Utilities industry?
Industry PE: Investors are most optimistic about the Electric Utilities industry, which is trading close to its 3-year average PE ratio of 21.2x. This is likely because analysts are expecting annual earnings growth of 11%, which is higher than its past year's earnings growth of 3.7% per year.
Forecasted Growth: Analysts are most optimistic on the Electric Utilities industry, expecting annual earnings growth of 11% over the next 5 years. This is better than it's past earnings growth rate of 3.7% per year.
Which companies have driven the market over the last 7 days?
Pinnacle West Capital
Pinnacle West Capital is an Arizona/New Mexico utility company with a strong track record of dividend growth. Recent headwinds have pushed the dividend yield to a multi-year high. It's expected to benefit from population and business growth and the stock appears to be trading in value territory.
SO, DUK, and WEC are well-managed utilities that operate in favorable regulatory environments. Financial debt is considered substantial but well-managed and WEC appears to have a slight edge over DUK and SO. As of today, WEC is still much more reliant on coal-fired plants than SO and DUK and thus likely expected to face relatively-increased capital expenditures going forward. Each of the companies have increased their dividend for roughly 20 years but WEC has outpaced SO's and DUK's growth rate by a wide margin. Neither of the companies are considered bargains in November 2021 but SO currently trades at an acceptable dividend yield. WEC, with its traditionally much lower yield, trades closest to its historic average valuation.
American Electric Power Company
PG&E came under well-deserved scrutiny after it was found liable for fire deaths in California. Putting aside the criminal liabilities, the company's higher expenses to pay fines and upgrade its infrastructure are just temporary and other tailwinds are being discounted by the markets. As a result, I am bullish on the company's ability to grow over the next 5 years and believe they are undervalued.