LSE:SSE

Stock Analysis Report

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Executive Summary

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


Snowflake Analysis

Second-rate dividend payer with limited growth.


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

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


Market Performance


7 Day Return

-0.3%

SSE

4.1%

GB Electric Utilities

0.1%

GB Market


1 Year Return

18.2%

SSE

12.4%

GB Electric Utilities

-15.3%

GB Market

Return vs Industry: SSE exceeded the UK Electric Utilities industry which returned 12.4% over the past year.

Return vs Market: SSE exceeded the UK Market which returned -15.3% over the past year.


Shareholder returns

SSEIndustryMarket
7 Day-0.3%4.1%0.1%
30 Day7.3%3.5%-2.7%
90 Day26.7%20.5%16.9%
1 Year27.6%18.2%16.3%12.4%-11.4%-15.3%
3 Year14.9%-7.7%62.3%44.2%-3.4%-15.2%
5 Year18.9%-15.0%57.6%23.9%15.4%-10.3%

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?

9.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SSE (£13.6) is trading below our estimate of fair value (£15.07)

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


Price To Earnings Ratio

PE vs Industry: SSE is poor value based on its PE Ratio (33.5x) compared to the Electric Utilities industry average (11.6x).

PE vs Market: SSE is poor value based on its PE Ratio (33.5x) compared to the UK market (14.9x).


Price to Earnings Growth Ratio

PEG Ratio: SSE is poor value based on its PEG Ratio (2.3x)


Price to Book Ratio

PB vs Industry: SSE is overvalued based on its PB Ratio (2.9x) compared to the XE Electric Utilities industry average (0.7x).


Next Steps

Future Growth

How is SSE forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

14.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SSE's forecast earnings growth (14.5% per year) is above the savings rate (1.2%).

Earnings vs Market: SSE's earnings (14.5% per year) are forecast to grow slower than the UK market (21.7% per year).

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

Revenue vs Market: SSE's revenue (4% per year) is forecast to grow faster than the UK market (3.4% per year).

High Growth Revenue: SSE's revenue (4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SSE's Return on Equity is forecast to be low in 3 years time (16.9%).


Next Steps

Past Performance

How has SSE performed over the past 5 years?

11.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SSE has a large one-off loss of £212.1M impacting its March 31 2010 financial results.

Growing Profit Margin: SSE's current net profit margins (6.2%) are lower than last year (18.9%).


Past Earnings Growth Analysis

Earnings Trend: SSE's earnings have grown by 11.4% per year over the past 5 years.

Accelerating Growth: SSE's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SSE had negative earnings growth (-69.7%) over the past year, making it difficult to compare to the Electric Utilities industry average (6.1%).


Return on Equity

High ROE: SSE's Return on Equity (9.5%) is considered low.


Next Steps

Financial Health

How is SSE's financial position?


Financial Position Analysis

Short Term Liabilities: SSE's short term assets (£3.5B) do not cover its short term liabilities (£5.2B).

Long Term Liabilities: SSE's short term assets (£3.5B) do not cover its long term liabilities (£10.9B).


Debt to Equity History and Analysis

Debt Level: SSE's debt to equity ratio (197.5%) is considered high.

Reducing Debt: SSE's debt to equity ratio has increased from 102.9% to 197.5% over the past 5 years.

Debt Coverage: SSE's debt is not well covered by operating cash flow (13.4%).

Interest Coverage: SSE's interest payments on its debt are well covered by EBIT (3.4x coverage).


Balance Sheet


Next Steps

Dividend

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

5.88%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: SSE's dividend (5.88%) is higher than the bottom 25% of dividend payers in the UK market (2%).

High Dividend: SSE's dividend (5.88%) is in the top 25% of dividend payers in the UK market (5.6%)


Stability and Growth of Payments

Stable Dividend: SSE's dividend payments have been volatile 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 high payout ratio (196.9%), SSE's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SSE's dividends in 3 years are not forecast to be well covered by earnings (95.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.1yrs

Average management tenure


CEO

Alistair Phillips-Davies (53yo)

7yrs

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 ($USD2.06M) is below average for companies of similar size in the UK market ($USD4.63M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Alistair Phillips-Davies
CEO & Executive Director7yrsUK£1.66m0.019% £2.7m
Gregor Alexander
Finance Director & Executive Director17.75yrsUK£1.26m0.018% £2.5m
Katie Bickerstaffe
Executive Chair of SSE Energy Services1.08yrsUK£7.00kno data
Martin Pibworth
Energy Director & Executive Director2.83yrsUK£687.00k0.0027% £384.5k
Anthony Keeling
COO & Co-Head of Retailno datano datano data
Sally Fairbairn
Director of Investor Relations & Company Secretaryno datano datano data
Liz Tanner
General Counsel0.75yrno datano data
Alan Young
Managing Director of Corporate Affairs & Sustainability0.75yrno datano data
Robert McDonald
Managing Director of Transmission1.17yrsno datano data
Jim Smith
Managing Director of Renewablesno datano datano data

1.1yrs

Average Tenure

53yo

Average Age

Experienced Management: SSE's management team is not considered experienced ( 1.1 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Alistair Phillips-Davies
CEO & Executive Director7yrsUK£1.66m0.019% £2.7m
Gregor Alexander
Finance Director & Executive Director17.75yrsUK£1.26m0.018% £2.5m
Martin Pibworth
Energy Director & Executive Director2.83yrsUK£687.00k0.0027% £384.5k
Richard Gillingwater
Chairman of the Board5yrsUK£389.00k0.00021% £29.7k
Helen Mahy
Independent Non-Executive Director4.33yrsUK£80.00k0.00020% £28.3k
Anthony Cocker
Independent Non-Executive Director2.17yrsUK£68.00k0.00048% £67.9k
Peter Lynas
Independent Non-Executive Director6yrsUK£88.00k0.00048% £67.9k
Crawford Gillies
Senior Independent Director4.92yrsUK£88.00k0.00048% £67.9k
Susan Bruce
Independent Non-Executive Director6.83yrsUK£86.00k0.00024% £33.9k
Melanie Smith
Independent Non-Executive Director1.5yrsUK£17.00k0.00019% £26.9k

5.0yrs

Average Tenure

60yo

Average Age

Experienced Board: SSE's board of directors are considered experienced (5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

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


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

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£14.136b
  • 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
SCTADB (Deutsche Boerse AG)SPONSORED ADRDEEURJan 1900
SSEZ.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDMar 1993
SSELSE (London Stock Exchange)YesOrdinary SharesGBGBPMar 1993
SCTXTRA (XETRA Trading Platform)YesOrdinary SharesDEEURMar 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, water, gas, coal, oil, and multi fuel. The company distributes electricity to approximately 3.8 million homes and businesses across the north of the central belt of Scotland and also central southern England; and owns and operates 132 kilovolts (KV), 275kV, and 400kV electricity transmission network using high voltage overhead lines, and underground and subsea cables. It also produces, stores, distributes, and supplies gas. In addition, it engages in electricity and utility contracting, telecommunications, energy trading, insurance, and property holding businesses, as well as provision of corporate and maintenance services. 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. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/04 20:53
End of Day Share Price2020/07/03 00:00
Earnings2020/03/31
Annual Earnings2020/03/31


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.