NZSE:CEN

Stock Analysis Report

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Market Cap

NZ$6.2b

Last Updated

2021/06/24 07:00 UTC

Data Sources

Company Financials +

Share Price & News

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


Latest Share Price and Events

Stable Share Price: CEN is not significantly more volatile than the rest of NZ stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: CEN's weekly volatility (3%) has been stable over the past year.


Market Performance


7 Day Return

-1.5%

CEN

0.08%

NZ Electric Utilities

0.4%

NZ Market


1 Year Return

30.4%

CEN

33.7%

NZ Electric Utilities

12.2%

NZ Market

Return vs Industry: CEN underperformed the NZ Electric Utilities industry which returned 33.7% over the past year.

Return vs Market: CEN exceeded the NZ Market which returned 12.2% over the past year.


Shareholder returns

CENIndustryMarket
7 Day-1.5%0.08%0.4%
30 Day5.0%-0.2%1.1%
90 Day18.8%5.5%-0.3%
1 Year38.8%30.4%40.0%33.7%15.3%12.2%
3 Year65.3%36.6%98.1%68.0%37.2%20.6%
5 Year111.3%55.0%60.6%27.7%79.8%38.2%

Long-Term Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

35.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CEN (NZ$8.03) is trading below our estimate of fair value (NZ$12.52)

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


Price To Earnings Ratio

PE vs Industry: CEN is poor value based on its PE Ratio (40.2x) compared to the Oceanic Electric Utilities industry average (37.5x).

PE vs Market: CEN is poor value based on its PE Ratio (40.2x) compared to the NZ market (22.5x).


Price to Earnings Growth Ratio

PEG Ratio: CEN is poor value based on its PEG Ratio (10.1x)


Price to Book Ratio

PB vs Industry: CEN's PB Ratio (2.3x) is in line with the NZ Electric Utilities industry average.


Future Growth

How is Contact Energy forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

4.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CEN's forecast earnings growth (4% per year) is above the savings rate (2.1%).

Earnings vs Market: CEN's earnings (4% per year) are forecast to grow slower than the NZ market (12.7% per year).

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

Revenue vs Market: CEN's revenue is expected to decline over the next 3 years (-4.6% per year).

High Growth Revenue: CEN's revenue is forecast to decline over the next 3 years (-4.6% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CEN's Return on Equity is forecast to be low in 3 years time (6.6%).


Past Performance

How has Contact Energy performed over the past 5 years?

26.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CEN has high quality earnings.

Growing Profit Margin: CEN's current net profit margins (6.8%) are higher than last year (5.7%).


Past Earnings Growth Analysis

Earnings Trend: CEN has become profitable over the past 5 years, growing earnings by 26.7% per year.

Accelerating Growth: CEN's earnings growth over the past year (10.8%) is below its 5-year average (26.7% per year).

Earnings vs Industry: CEN earnings growth over the past year (10.8%) exceeded the Electric Utilities industry 7.4%.


Return on Equity

High ROE: CEN's Return on Equity (5.7%) is considered low.


Financial Health

How is Contact Energy's financial position?


Financial Position Analysis

Short Term Liabilities: CEN's short term assets (NZ$288.0M) do not cover its short term liabilities (NZ$533.0M).

Long Term Liabilities: CEN's short term assets (NZ$288.0M) do not cover its long term liabilities (NZ$1.7B).


Debt to Equity History and Analysis

Debt Level: CEN's debt to equity ratio (44.1%) is considered high.

Reducing Debt: CEN's debt to equity ratio has reduced from 61.1% to 44.1% over the past 5 years.

Debt Coverage: CEN's debt is well covered by operating cash flow (34.3%).

Interest Coverage: CEN's interest payments on its debt are well covered by EBIT (5.3x coverage).


Balance Sheet


Dividend

What is Contact Energy current dividend yield, its reliability and sustainability?

4.61%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: CEN's dividend (4.61%) is higher than the bottom 25% of dividend payers in the NZ market (2.33%).

High Dividend: CEN's dividend (4.61%) is low compared to the top 25% of dividend payers in the NZ market (4.62%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (185%), CEN's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CEN's dividends in 3 years are not forecast to be well covered by earnings (158.4% payout ratio).


Next Steps

Management

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

2.0yrs

Average management tenure


CEO

Mike Fuge

1.33yrs

Tenure

NZ$1,365,923

Compensation

Mr. Michael Fuge, also known as Mike, M. Com. (Hons), B.Eng. (Hons), MIPENZ, serves as Chief Executive Officer of Contact Energy Limited since February 24, 2020. He served as Chief Executive Officer at The...


CEO Compensation Analysis

Compensation vs Market: Mike's total compensation ($USD963.00K) is below average for companies of similar size in the NZ market ($USD1.43M).

Compensation vs Earnings: Insufficient data to compare Mike's compensation with company performance.


Leadership Team

Experienced Management: CEN's management team is considered experienced (2 years average tenure).


Board Members

Experienced Board: CEN's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.


Ownership

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


Insider Trading Volume

Insider Buying: CEN insiders have sold more shares than they have bought in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 8.1%.


Top Shareholders

Company Information

Contact Energy Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Contact Energy Limited
  • Ticker: CEN
  • Exchange: NZSE
  • Founded: 1995
  • Industry: Electric Utilities
  • Sector: Utilities
  • Market Cap: NZ$6.232b
  • Shares outstanding: 776.12m
  • Website: https://contact.co.nz

Number of Employees


Location

  • Contact Energy Limited
  • Harbour City Tower
  • 29 Brandon Street
  • Wellington
  • 6011
  • New Zealand

Listings


Biography

Contact Energy Limited generates and sells electricity and natural gas in New Zealand. The company operates through two segments, Wholesale and Customer. The Wholesale segment sells electricity to the whol...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/06/24 07:00
End of Day Share Price2021/06/23 00:00
Earnings2020/12/31
Annual Earnings2020/06/30


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.