BME:NTGY

Stock Analysis Report

Naturgy Energy Group

Executive Summary

Naturgy Energy Group, S.A., together with its subsidiaries, engages in the supply, liquefaction, regasification, transport, storage, distribution, and sale of natural gas in Spain and internationally.

Rewards

Trading at 54.8% below its fair value

Earnings are forecast to grow 5.58% per year

Became profitable this year

Risk Analysis

Has a high level of debt

Dividend of 6.03% is not well covered by earnings

Large one-off items impacting financial results



Snowflake Analysis

Average dividend payer with mediocre balance sheet.


Similar Companies

Share Price & News

How has Naturgy Energy Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NTGY has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.8%

NTGY

-0.2%

ES Gas Utilities

1.9%

ES Market


1 Year Return

0.5%

NTGY

5.2%

ES Gas Utilities

8.0%

ES Market

Return vs Industry: NTGY underperformed the Spanish Gas Utilities industry which returned 5.2% over the past year.

Return vs Market: NTGY underperformed the Spanish Market which returned 8% over the past year.


Shareholder returns

NTGYIndustryMarket
7 Day-0.8%-0.2%1.9%
30 Day-5.1%-5.1%0.1%
90 Day-2.6%-0.5%2.5%
1 Year5.1%0.5%10.2%5.2%11.9%8.0%
3 Year51.8%32.6%43.9%25.1%14.0%3.2%
5 Year40.5%11.1%55.8%16.6%15.2%-4.2%

Price Volatility Vs. Market

How volatile is Naturgy Energy Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Naturgy Energy Group undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NTGY (€22.72) is trading below our estimate of fair value (€50.24)

Significantly Below Fair Value: NTGY is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: NTGY is poor value based on its PE Ratio (22.3x) compared to the Gas Utilities industry average (15.6x).

PE vs Market: NTGY is poor value based on its PE Ratio (22.3x) compared to the Spanish market (17.2x).


Price to Earnings Growth Ratio

PEG Ratio: NTGY is poor value based on its PEG Ratio (4x)


Price to Book Ratio

PB vs Industry: NTGY is overvalued based on its PB Ratio (2x) compared to the XE Gas Utilities industry average (1.3x).


Next Steps

Future Growth

How is Naturgy Energy Group forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

5.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NTGY's forecast earnings growth (5.6% per year) is above the savings rate (0.4%).

Earnings vs Market: NTGY's earnings (5.6% per year) are forecast to grow slower than the Spanish market (10.1% per year).

High Growth Earnings: NTGY's earnings are forecast to grow, but not significantly.

Revenue vs Market: NTGY's revenue (1.7% per year) is forecast to grow slower than the Spanish market (3.5% per year).

High Growth Revenue: NTGY's revenue (1.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NTGY's Return on Equity is forecast to be low in 3 years time (15.7%).


Next Steps

Past Performance

How has Naturgy Energy Group performed over the past 5 years?

-41.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NTGY has a large one-off loss of €4.2B impacting its September 30 2019 financial results.

Growing Profit Margin: NTGY became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: NTGY's earnings have declined by -41.6% per year over the past 5 years.

Accelerating Growth: NTGY has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: NTGY has become profitable in the last year, making it difficult to compare its past year earnings growth to the Gas Utilities industry (11.9%).


Return on Equity

High ROE: NTGY's Return on Equity (10.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Naturgy Energy Group's financial position?


Financial Position Analysis

Short Term Liabilities: NTGY's short term assets (€8.3B) exceed its short term liabilities (€6.6B).

Long Term Liabilities: NTGY's short term assets (€8.3B) do not cover its long term liabilities (€20.0B).


Debt to Equity History and Analysis

Debt Level: NTGY's debt to equity ratio (122%) is considered high.

Reducing Debt: NTGY's debt to equity ratio has increased from 106.4% to 122% over the past 5 years.

Debt Coverage: NTGY's debt is well covered by operating cash flow (23.1%).

Interest Coverage: NTGY's interest payments on its debt are well covered by EBIT (11.5x coverage).


Balance Sheet

Inventory Level: NTGY has a high level of physical assets or inventory.

Debt Coverage by Assets: NTGY's debt is not covered by short term assets (assets are 0.5x debt).


Next Steps

Dividend

What is Naturgy Energy Group's current dividend yield, its reliability and sustainability?

6.03%

Current Dividend Yield


Dividend Yield vs Market

company6.0%marketbottom25%2.3%markettop25%5.6%industryaverage5.4%forecastin3Years6.4%

Current dividend yield vs market & industry

Notable Dividend: NTGY's dividend (6.03%) is higher than the bottom 25% of dividend payers in the Spanish market (2.26%).

High Dividend: NTGY's dividend (6.03%) is in the top 25% of dividend payers in the Spanish market (5.56%)


Stability and Growth of Payments

Stable Dividend: NTGY's dividend payments have been volatile in the past 10 years.

Growing Dividend: NTGY's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (85%), NTGY's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NTGY's dividends in 3 years are not forecast to be well covered by earnings (94% payout ratio).


Next Steps

Management

What is the CEO of Naturgy Energy Group's salary, the management and board of directors tenure and is there insider trading?

4.7yrs

Average management tenure


CEO

Francisco Miguel Reynés Massanet (56yo)

1.8yrs

Tenure

€1,028,571

Compensation

Mr. Francisco Miguel Reynés Massanet serves as Vice-Chairman and Chief Executive Officer of Abertis Infraestructuras, S.A. Mr. Massanet has been CEO and Chairman of Gas Natural SDG, S.A since February 2018 ...


Management Age and Tenure

4.7yrs

Average Tenure

56yo

Average Age

Experienced Management: NTGY's management team is considered experienced (4.7 years average tenure).


Board Age and Tenure

3.3yrs

Average Tenure

61.5yo

Average Age

Experienced Board: NTGY's board of directors are considered experienced (3.3 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Buy€484,00006 Feb 19
Pedro Sainz de Baranda Riva
EntityIndividual
Shares20,000
Max Price€24.20
Buy€120,00004 Feb 19
Ramón Adell
EntityIndividual
Role
Lead Director
Lead Director
Shares5,000
Max Price€24.00

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Carlos Javier Álvarez Fernández (56yo)

    Chief Financial Officer

    • Tenure: 19.9yrs
  • Manuel García Cobaleda (51yo)

    GM of Legal Services

    • Tenure: 0yrs
  • Francisco Miguel Reynés Massanet (56yo)

    CEO & Chairman

    • Tenure: 1.8yrs
    • Compensation: €1.03m
  • Steven Fernández

    Director of Capital Markets

    • Tenure: 1.5yrs
  • Rosa María Sanz García (50yo)

    Managing Director of España & Empl-Medgaz Infrastructure Business

    • Tenure: 4.7yrs
  • Carlos Ayuso Salinas (57yo)

    Director of Internal Audit

    • Tenure: 5.9yrs
  • Abel Arbat

    Head of Investor Relations

    • Tenure: 0yrs
  • Jon Ganuza Fernández De Arroyabe

    Controller

    • Tenure: 0yrs

Board Members

  • Javier de Jaime Guijarro

    Proprietary Director

    • Tenure: 1.6yrs
    • Compensation: €153.37k
  • Marcelino Armenter Vidal (62yo)

    Proprietary Director

    • Tenure: 3.3yrs
    • Compensation: €255.50k
  • Enrique Alcántara-García Irazoqui (75yo)

    Independent Director

    • Tenure: 28.5yrs
    • Compensation: €208.32k
  • Francisco Miguel Reynés Massanet (56yo)

    CEO & Chairman

    • Tenure: 1.8yrs
    • Compensation: €1.03m
  • Ramón Adell (61yo)

    Lead Director

    • Tenure: 0yrs
    • Compensation: €354.18k
  • Rajaram Rao (48yo)

    Proprietary Director

    • Tenure: 3.3yrs
    • Compensation: €277.32k
  • Francisco Belil Creixell (73yo)

    Independent Director

    • Tenure: 4.6yrs
    • Compensation: €319.30k
  • Helena Herrero Starkie (60yo)

    Independent Director

    • Tenure: 3.6yrs
    • Compensation: €208.32k
  • Claudi Santiago Ponsa (63yo)

    Independent Director

    • Tenure: 1.5yrs
    • Compensation: €117.50k
  • José Antonio Torre de Silva López de Letona

    Proprietary Director

    • Tenure: 1.6yrs
    • Compensation: €155.31k

Company Information

Naturgy Energy Group, S.A.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Naturgy Energy Group, S.A.
  • Ticker: NTGY
  • Exchange: BME
  • Founded: 1843
  • Industry: Gas Utilities
  • Sector: Utilities
  • Market Cap: €22.114b
  • Shares outstanding: 973.31m
  • Website: https://www.naturgy.com

Number of Employees


Location

  • Naturgy Energy Group, S.A.
  • Plaza del Gas, 1
  • Barcelona
  • Catalonia
  • 8003
  • Spain

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NTGYBME (Bolsas y Mercados Espanoles)YesOrdinary SharesESEURJan 1980
GANDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1980
GASN.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1980
0NPVLSE (London Stock Exchange)YesOrdinary SharesGBEURJan 1980
GAS-UETLX (Eurotlx)YesOrdinary SharesITEURJan 1980
GASWBAG (Wiener Boerse AG)YesOrdinary SharesATEURJan 1980
GASN.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDOct 2008

Biography

Naturgy Energy Group, S.A., together with its subsidiaries, engages in the supply, liquefaction, regasification, transport, storage, distribution, and sale of natural gas in Spain and internationally. The  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/10 20:41
End of Day Share Price2019/12/10 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.