The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value. We use
analyst's estimates of cash flows going forward 5 years.
See our documentation to learn about this calculation.
|Levered FCF (GBP, Millions)||£881.00||£1,047.50||£1,479.00||£1,165.00||£1,134.00|
|Source||Analyst x2||Analyst x2||Analyst x3||Analyst x1||Analyst x1|
Discounted (@ 8.3%)
Present value of next 5 years cash flows:
Terminal Value = FCF2022 × (1 + g) ÷ (Discount Rate – g)
Terminal Value = £1,134 × (1 + 1.49%) ÷ (8.3% – 1.49%)
Terminal value based on the Perpetuity Method where growth (g) =
Present value of terminal value:
Equity Value (Total value) = Present value of next 5 years cash flows +
£15,827 = £4,479 + £11,348
Value = Total value / Shares Outstanding (£15,827 / 1,012)Discount to Share Price
Value per share:
Current discount (share price of £12.52): 20.01%
The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.
Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
Discount rate = 8.3% = 1.49% + (0.8 * 8.51%)
The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value (£12,503,311,357).
Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
0.649 = 0.418 (1 + (1- 19%) (68.29%))
Levered Beta used in calculation = 0.8
Mr. Alistair Phillips-Davies has been Vice President of Eurelectric Aisbl since June 2015. Mr. Phillips-Davies has been the Chief Executive Officer of SSE plc since July 1, 2013. He leads the Executive Committee and the rest of the SSE team in the day-to-day running and operations of SSE and is responsible for implementing the strategy and policy set by the Board. He also has Board-level responsibility for Human Resources and Corporate Affairs. He served as Deputy Chief Executive of SSE plc since 2012. He served as Deputy Chief Executive of Retail and Wholesale Business at SSE plc (alternative name, Scottish & Southern Energy PLC) from September 2012 to July 1, 2013. He served as the Generation & Supply Director at SSE plc since December 2010 and served as its Member of Management Board. He served as Energy Supply Director at SSE plc since 2002. He joined Southern Electric in February 1997 having worked for HSBC and the National Westminster Bank in corporate finance and business development roles. He also served as Director of Energy Supply Operations at SSE plc and oversaw the introduction of the New Electricity Trading Arrangements. He serves as a Member of Eurelectric Aisbl. He has been an Executive Director of SSE plc since January 2002. He serves as the Chairman of the Risk Committee and has Board level responsibility for Energy Trading, Electricity and Gas Supply, Marketing and Energy Services. He has a degree in Natural Sciences and is a qualified Chartered Accountant.
Average tenure and age of the SSE management team in years:
Average tenure and age of the SSE board of directors in years:
Formula Price-Earnings Ratio = Price per share ÷ Earnings per share P/E Calculation for SSE Price per share = £12.52 Earnings per share = £1.353 ∴ Price-Earnings Ratio = £12.52 ÷ £1.353 = 9.3x On its own, the P/E ratio doesn’t tell you much; however, it becomes extremely useful when you compare it with other similar companies. … For example, if you accidentally compared higher growth firms with SSE, then SSE’s P/E would naturally be lower since investors would reward its peers’ higher growth with a higher price. … Alternatively, if you inadvertently compared less risky firms with SSE, SSE’s P/E would again be lower since investors would reward its peers’ lower risk with a higher price as well.Simply Wall St - – Full article
5-year cash flow forecast 2018 2019 2020 2021 2022 Levered FCF (£, Millions) £986.00 £1,047.50 £1,479.00 £1,165.00 £1,134.00 Source Analyst x1 Analyst x2 Analyst x3 Analyst x1 Analyst x1 Present Value Discounted @ 8.3% £910.45 £893.13 £1,164.41 £846.92 £761.22 Present Value of 5-year Cash Flow (PVCF)= £4,576 After calculating the present value of future cash flows in the intial 5-year period we need to calculate the Terminal Value, which accounts for all the future cash flows beyond the first stage. … Terminal Value (TV) = FCF2022 × (1 + g) ÷ (r – g) = £1,134 × (1 + 1.5%) ÷ (8.3% – 1.5%) = £16,905 Present Value of Terminal Value (PVTV) = TV / (1 + r)5 = £16,905 / ( 1 + 8.3%)5 = £11,348 The total value is the sum of cash flows for the next five years and the discounted terminal value, which results in the Total Equity Value, which in this case is £15,924. … LSE:SSE Intrinsic Value Feb 17th 18 The assumptions Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows.Simply Wall St - – Full article
After reading SSE plc's (LSE:SSE) most recent earnings announcement (30 September 2017), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. … I prefer to use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. … This blend enables me to analyze different stocks on a similar basis, using the latest information.Simply Wall St - – Full article
Knowing the portion of top line revenue that is turned into net income helps to assess this ability whilst spotting profit drivers, and can be found by calculating SSE's profit margin. … Margin Calculation for SSE Profit Margin = Net Income ÷ Revenue ∴ Profit Margin = 1.36 Billion ÷ 29.96 Billion = 4.55% SSE's margin has expanded in the past five years, due to positive average net income growth of 8.74% and decline in revenue growth of -0.005% on average, indicating that that despite the previous revenue decline, the company has managed to maintain positive earnigns growth and therefore increase the proportion of revenue that falls to the bottom line. … SSE's most recent margin of 4.55% appears to follow this trend, which could imply that improved cost efficiency has driven earnings growth rather than growing top line revenue.Simply Wall St - – Full article
More specifically: Its annual yield is among the top 25% of dividend payers It consistently pays out dividend without missing a payment or significantly cutting payout Its has increased its dividend per share amount over the past It can afford to pay the current rate of dividends from its earnings It has the ability to keep paying its dividends going forward High Yield And Dependable The company's dividend yield stands at 7.07%, which is high for electric utilities stocks. … Going forward, analysts expect SSE's payout to increase to 75.86% of its earnings, which leads to a dividend yield of around 7.49%. … Other Dividend Rockstars: Are there strong dividend payers with better fundamentals out there.Simply Wall St - – Full article
More specifically: Its annual yield is among the top 25% of dividend payers It consistently pays out dividend without missing a payment or significantly cutting payout Its dividend per share amount has increased over the past It is able to pay the current rate of dividends from its earnings It is able to continue to payout at the current rate in the future High Yield And Dependable SSE's yield sits at 6.91%, which is high for electric utilities stocks. … LSE:SSE Historical Dividend Yield Jan 14th 18 If there is one thing that you want to be reliable in your life, it's dividend stocks and their constant income stream. … There aren't many other stocks out there with the same track record as SSE, so I would certainly recommend further examining the stock if its dividend characteristics appeal to you.Simply Wall St - – Full article
Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine SSE's latest financial data to analyse its dividend characteristics. … More specifically: Its annual yield is among the top 25% of dividend payers It has paid dividend every year without dramatically reducing payout in the past Its has increased its dividend per share amount over the past It can afford to pay the current rate of dividends from its earnings It has the ability to keep paying its dividends going forward High Yield And Dependable SSE's yield sits at 6.90%, which is high for electric utilities stocks. … There aren't many other stocks out there with the same track record as SSE, so I would certainly recommend further examining the stock if its dividend characteristics appeal to you.Simply Wall St - – Full article
The latest earnings announcement SSE plc's (LSE:SSE) released in September 2017 suggested that the business experienced a substantial tailwind, more than doubling its earnings from the prior year. … Check out our latest analysis for SSE Analysts' expectations for the upcoming year seems pessimistic, with earnings reducing by a double-digit -17.27%. … LSE:SSE Future Profit Dec 30th 17 Although it is helpful to understand the growth rate year by year relative to today’s figure, it may be more insightful evaluating the rate at which the earnings are growing every year, on average.Simply Wall St - – Full article
LSE:SSE Historical Dividend Yield Nov 24th 17 Pearson plc (LSE:PSON) Pearson plc provides educational materials and learning technologies for teachers and students worldwide. … LSE:PSON Historical Dividend Yield Nov 24th 17 Aggreko plc (LSE:AGK) Aggreko plc engages in the rental of temporary power and temperature control solutions to various customers. … LSE:AGK Historical Dividend Yield Nov 24th 17 For more solid dividend payers to add to your portfolio, you can use our free platform to explore our interactive list of top dividend payers.Simply Wall St - – Full article
To assess the reasonability of SSE’s earnings per share contraction, we should look at its most recent growth rate delivered. … SSE’s earnings growth of -26.44% for the past five years shows an adverse and continuous trend of double-digit contraction in earnings growth. … As a well-established company, SSE could be exhibiting signs of potential market share loss or obsolete products to sustain large negative growth over time.Next Steps: For SSE, I've compiled three essential factors you should look at: 1.Simply Wall St - – Full article
SSE plc produces, generates, distributes, and supplies electricity and gas, as well as other energy-related services in the United Kingdom and Ireland. It operates through three segments: Wholesale, Networks, and Retail. The company generates electricity from gas, oil, coal, water, and wind. Its electricity networks transmit and distribute electricity to approximately 3.7 million businesses, offices, and homes through approximately 130,000 kilometers of overhead lines and underground cables; and gas networks distribute gas to approximately 5.7 million homes, offices, and businesses through 75,000 kilometers of gas mains. The company also supplies electricity and gas to approximately 9 million households and businesses under the SSE, Scottish Hydro, Southern Electric, SWALEC, Atlantic, and Airtricity brands. In addition, it maintains and replaces street and highway lighting; designs, builds, owns, and operates networks for electricity, gas, water, and heat; and provides network capacity, bandwidth, and data center services. Further, the company offers energy-related products and services, including home services, such as gas boiler covers, central heating and wiring maintenance and installation, telephone line rental, and calls and broadband services; and supplying, installing, maintaining, and reading meters in the household, commercial, industrial, and generation sectors. The company was formerly known as Scottish and Southern Energy plc and changed its name to SSE plc in September 2011. SSE plc was incorporated in 1989 and is based in Perth, the United Kingdom.
200 Dunkeld Road,
Perthshire, PH1 3AQ,
|Exchange Symbol||Ticker Symbol||Security||Exchange||Country||Currency||Listed on|
|LSE||SSE||Ordinary Shares||London Stock Exchange||GB||GBP||31. Mar 1993|
|OTCPK||SSEZ.F||Ordinary Shares||Pink Sheets LLC||US||USD||31. Mar 1993|
|DB||SCT||Ordinary Shares||Deutsche Boerse AG||DE||EUR||31. Mar 1993|
|BATS-CHIXE||SSEL||Ordinary Shares||BATS 'Chi-X Europe'||GB||GBP||31. Mar 1993|
|OTCPK||SSEZ.Y||SPONSORED ADR||Pink Sheets LLC||US||USD||03. Jan 1900|
|Company Analysis updated:||2018/02/24|
|Last estimates confirmation:||2018/02/23|
|Last earnings update:||2017/09/30|
|Last annual earnings update:||2017/03/31|
All dates in UTC. All financial data provided by Standard & Poor’s Capital IQ.
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.