LSE:SSE

Stock Analysis Report

Executive Summary

SSE plc engages in the generation, transmission, distribution, and supply of electricity.

Snowflake

Fundamentals

6 star dividend payer with proven track record.


Similar Companies

Share Price & News

How has SSE's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-0.04%

SSE

0.4%

GB Electric Utilities

1.7%

GB Market


1 Year Return

13.8%

SSE

18.9%

GB Electric Utilities

2.9%

GB Market

Return vs Industry: SSE underperformed the UK Electric Utilities industry which returned 18.9% over the past year.

Return vs Market: SSE exceeded the UK Market which returned 2.9% over the past year.


Shareholder returns

SSEIndustryMarket
7 Day-0.04%0.4%1.7%
30 Day6.6%-0.8%-0.7%
90 Day12.9%2.5%-1.8%
1 Year24.0%13.8%23.6%18.9%8.0%2.9%
3 Year2.1%-18.1%55.4%35.5%18.2%3.8%
5 Year19.3%-14.8%48.2%10.5%35.6%6.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is SSE undervalued compared to its fair value and its price relative to the market?

16.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: SSE (£13.09) is trading below our estimate of fair value (£15.62)

Significantly Undervalued: SSE is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: SSE is good value based on its PE Ratio (9.7x) compared to the Electric Utilities industry average (11.9x).

PE vs Market: SSE is good value based on its PE Ratio (9.7x) compared to the UK market (16.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: SSE's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: SSE is overvalued based on its PB Ratio (2.3x) compared to the XE Electric Utilities industry average (0.9x).


Next Steps

Future Growth

How is SSE forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

-5.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SSE's earnings are forecast to decline over the next 3 years (-5.1% per year).

Earnings vs Market: SSE's earnings are forecast to decline over the next 3 years (-5.1% per year).

High Growth Earnings: SSE's earnings are forecast to decline over the next 3 years.

Revenue vs Market: SSE's revenue (40.3% per year) is forecast to grow faster than the UK market (3.9% per year).

High Growth Revenue: SSE's revenue (40.3% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: SSE's Return on Equity is forecast to be low in 3 years time (16.1%).


Next Steps

Past Performance

How has SSE performed over the past 5 years?

20.9%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: SSE's earnings have grown significantly by 20.9% per year over the past 5 years.

Accelerating Growth: SSE's earnings growth over the past year (112.7%) exceeds its 5-year average (20.9% per year).

Earnings vs Industry: SSE earnings growth over the past year (112.7%) exceeded the Electric Utilities industry 2.3%.


Return on Equity

High ROE: Whilst SSE's Return on Equity (24.45%) is high, this metric is skewed due to their high level of debt.


Return on Assets

ROA vs Industry: SSE has a higher Return on Assets than the Electric Utilities industry average last year.


Return on Capital Employed

ROCE Improving: SSE's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is SSE's financial position?


Financial Position Analysis

Short Term Liabilities: SSE's short term assets (£7.9B) exceeds its short term liabilities (£7.7B)

Long Term Liabilities: SSE's short term assets (7.9B) do not cover its long term liabilities (11.8B)


Debt to Equity History and Analysis

Debt Level: SSE's debt to equity ratio (163.5%) is considered high

Reducing Debt: SSE's debt to equity ratio has increased from 122.2% to 163.5% over the past 5 years.

Debt Coverage: SSE's debt is not well covered by operating cash flow (12.3%).

Interest Coverage: SSE's interest payments on its debt are not well covered by EBIT (1.9x coverage).


Balance Sheet

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

Debt Coverage by Assets: SSE's debt is not covered by short term assets (assets are 0.8x debt).


Next Steps

Dividend

What is SSE's current dividend yield, its reliability and sustainability?

7.45%

Current Dividend Yield


Dividend Yield vs Market

company7.5%marketbottom25%2.0%markettop25%5.4%industryaverage4.0%forecastin3Years6.4%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: SSE's dividend (7.45%) is higher than the bottom 25% of dividend payers in the UK market (1.99%).

High Dividend: SSE's dividend (7.45%) is in the top 25% of dividend payers in the UK market (5.41%)

Stable Dividend: SSE's dividends per share have been stable in the past 10 years.

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (72.1%), SSE's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SSE's dividends in 3 years are forecast to be covered by earnings (85.8% payout ratio).


Next Steps

Management

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

3.3yrs

Average management tenure


CEO

Alistair Phillips-Davies (52yo)

6.3yrs

Tenure

UK£1,656,000

Compensation

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 Com ...


CEO Compensation Analysis

Compensation vs. Market: Alistair's total compensation ($USD2.13M) is about average for companies of similar size in the UK market ($USD4.63M).

Compensation vs Earnings: Alistair's compensation has been consistent with company performance over the past year.


Management Age and Tenure

3.3yrs

Average Tenure

52yo

Average Age

Experienced Management: SSE's management team is considered experienced (3.3 years average tenure).


Board Age and Tenure

4.2yrs

Average Tenure

59yo

Average Age

Experienced Board: SSE's board of directors are considered experienced (4.2 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

SellUK£28,89204 Jul 19
Martin Pibworth
EntityIndividual
Role
Member of the Board of Directors
Wholesale Director
Shares2,588
Max PriceUK£11.16
BuyUK£33,51019 Nov 18
Peter Lynas
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares3,000
Max PriceUK£11.17

Ownership Breakdown


Management Team

  • Gregor Alexander (56yo)

    Finance Director & Executive Director

    • Tenure: 17yrs
    • Compensation: UK£1.26m
  • Alistair Phillips-Davies (52yo)

    CEO & Executive Director

    • Tenure: 6.3yrs
    • Compensation: UK£1.66m
  • Katie Bickerstaffe (52yo)

    Executive Chair of SSE Energy Services

    • Tenure: 0.3yrs
    • Compensation: UK£7.00k
  • Alan Young

    Managing Director of Corporate Affairs & Sustainability

    • Tenure: 0yrs
  • Sally Fairbairn

    Director of Investor Relations & Company Secretary

    • Tenure: 0yrs
  • Rob McDonald

    Managing Director of Transmission

    • Tenure: 0.4yrs
  • Jim Smith

    Managing Director of Renewables

    • Tenure: 0yrs
  • Martin Pibworth

    Wholesale Director

    • Tenure: 2.1yrs
    • Compensation: UK£687.00k
  • Tony Keeling

    COO & Co-Head of Retail

    • Tenure: 0yrs
  • Liz Tanner

    General Counsel

    • Tenure: 0yrs

Board Members

  • Richard Gillingwater (62yo)

    Chairman of the Baord

    • Tenure: 4.3yrs
    • Compensation: UK£389.00k
  • Gregor Alexander (56yo)

    Finance Director & Executive Director

    • Tenure: 17yrs
    • Compensation: UK£1.26m
  • Alistair Phillips-Davies (52yo)

    CEO & Executive Director

    • Tenure: 6.3yrs
    • Compensation: UK£1.66m
  • Helen Mahy (58yo)

    Independent Non-Executive Director

    • Tenure: 3.6yrs
    • Compensation: UK£80.00k
  • Tony Cocker (60yo)

    Independent Non-Executive Director

    • Tenure: 1.4yrs
    • Compensation: UK£68.00k
  • Peter Lynas

    Independent Non-Executive Director

    • Tenure: 5.3yrs
    • Compensation: UK£88.00k
  • Crawford Gillies (63yo)

    Senior Independent Director

    • Tenure: 4.2yrs
    • Compensation: UK£88.00k
  • Martin Pibworth

    Wholesale Director

    • Tenure: 2.1yrs
    • Compensation: UK£687.00k
  • Sue Bruce

    Independent Non-Executive Director

    • Tenure: 6.1yrs
    • Compensation: UK£86.00k
  • Melanie Smith

    Independent Non-Executive Director

    • Tenure: 0.8yrs
    • Compensation: UK£17.00k

Company Information

SSE plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: SSE plc
  • Ticker: SSE
  • Exchange: LSE
  • Founded: 1989
  • Industry: Electric Utilities
  • Sector: Utilities
  • Market Cap: UK£13.543b
  • Shares outstanding: 1.04b
  • Website: https://www.sse.com

Number of Employees


Location

  • SSE plc
  • Inveralmond House
  • 200 Dunkeld Road
  • Perth
  • Perthshire
  • PH1 3AQ
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SSEZ.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDJan 1900
SSEZ.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDMar 1993
SSELSE (London Stock Exchange)YesOrdinary SharesGBGBPMar 1993
SCTDB (Deutsche Boerse AG)YesOrdinary SharesDEEURMar 1993
SSELBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPMar 1993

Biography

SSE plc engages in the generation, transmission, distribution, and supply of electricity. The company operates through three segments: Wholesale, Networks, and Retail. It generates electricity from water,  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/18 20:33
End of Day Share Price2019/10/18 00:00
Earnings2019/03/31
Annual Earnings2019/03/31


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.