NZSE:TPW

Stock Analysis Report

Executive Summary

Trustpower Limited engages in the development, ownership, and operation of electricity generation facilities in New Zealand.


Snowflake Analysis

Adequate balance sheet with limited growth.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-3.8%

TPW

0.4%

NZ Electric Utilities

0.4%

NZ Market


1 Year Return

10.3%

TPW

30.2%

NZ Electric Utilities

21.9%

NZ Market

Return vs Industry: TPW underperformed the NZ Electric Utilities industry which returned 29.6% over the past year.

Return vs Market: TPW underperformed the NZ Market which returned 22.3% over the past year.


Shareholder returns

TPWIndustryMarket
7 Day-3.8%0.4%0.4%
30 Day-5.4%1.2%0.2%
90 Day-1.5%10.9%8.1%
1 Year18.8%10.3%37.4%30.2%26.8%21.9%
3 Year102.9%57.6%100.4%65.9%60.7%39.8%
5 Yearn/a94.8%40.2%96.5%52.7%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

4.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TPW (NZ$7.06) is trading below our estimate of fair value (NZ$7.39)

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


Price To Earnings Ratio

PE vs Industry: TPW is poor value based on its PE Ratio (34x) compared to the Electric Utilities industry average (30.1x).

PE vs Market: TPW is poor value based on its PE Ratio (34x) compared to the NZ market (20.6x).


Price to Earnings Growth Ratio

PEG Ratio: TPW is poor value based on its PEG Ratio (3.7x)


Price to Book Ratio

PB vs Industry: TPW is overvalued based on its PB Ratio (1.9x) compared to the NZ Electric Utilities industry average (1.9x).


Next Steps

Future Growth

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

9.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TPW's forecast earnings growth (9.2% per year) is above the savings rate (1.3%).

Earnings vs Market: TPW's earnings (9.2% per year) are forecast to grow faster than the NZ market (6.4% per year).

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

Revenue vs Market: TPW's revenue is expected to decline over the next 3 years (-0.4% per year).

High Growth Revenue: TPW's revenue is forecast to decline over the next 3 years (-0.4% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TPW's Return on Equity is forecast to be low in 3 years time (9.2%).


Next Steps

Past Performance

How has Trustpower performed over the past 5 years?

-8.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TPW has high quality earnings.

Growing Profit Margin: TPW's current net profit margins (6.1%) are lower than last year (10.4%).


Past Earnings Growth Analysis

Earnings Trend: TPW's earnings have declined by -8.1% per year over the past 5 years.

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

Earnings vs Industry: TPW had negative earnings growth (-34.2%) over the past year, making it difficult to compare to the Electric Utilities industry average (-9.3%).


Return on Equity

High ROE: TPW's Return on Equity (5.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Trustpower's financial position?


Financial Position Analysis

Short Term Liabilities: TPW's short term assets (NZ$194.0M) exceed its short term liabilities (NZ$116.9M).

Long Term Liabilities: TPW's short term assets (NZ$194.0M) do not cover its long term liabilities (NZ$944.7M).


Debt to Equity History and Analysis

Debt Level: TPW's debt to equity ratio (53.5%) is considered high.

Reducing Debt: TPW's debt to equity ratio has reduced from 86.7% to 53.5% over the past 5 years.

Debt Coverage: TPW's debt is well covered by operating cash flow (22.6%).

Interest Coverage: TPW's interest payments on its debt are well covered by EBIT (5x coverage).


Balance Sheet

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

Debt Coverage by Assets: TPW's debt is not covered by short term assets (assets are 0.3x debt).


Next Steps

Dividend

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

4.81%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: TPW's dividend (4.82%) is higher than the bottom 25% of dividend payers in the NZ market (2.85%).

High Dividend: TPW's dividend (4.82%) is low compared to the top 25% of dividend payers in the NZ market (5.59%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, TPW has been paying a dividend for less than 10 years.

Growing Dividend: TPW's dividend payments have increased, but the company has only paid a dividend for 3 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (163.8%), TPW's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TPW's dividends in 3 years are not forecast to be well covered by earnings (103.4% payout ratio).


Next Steps

Management

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

4.6yrs

Average management tenure


CEO

David Prentice (49yo)

0.08yrs

Tenure

Dr. David Prentice, BEng (HONS), PhD, FEngNZis Chief Executive Officer of Trustpower Limited since January 20, 2020. Dr. Prentice was an Independent Director at Trustpower Limited since July 26, 2019 until ...


Leadership Team

NamePositionTenureCompensationOwnership
David Prentice
Chief Executive & Non-Independent Director0.08yrsno datano data
Kevin Palmer
CFO & Company Secretary3.2yrsno data0.010% NZ$225.8k
Simon Clarke
General Manager of Business Solutions & Technology7.7yrsno data0.020% NZ$434.2k
Melanie Dyer
General Manager of People & Culture6.1yrsno data0.020% NZ$434.2k

4.6yrs

Average Tenure

Experienced Management: TPW's management team is considered experienced (4.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
David Prentice
Chief Executive & Non-Independent Director0.08yrsno datano data
Keith Turner
Director0.6yrsno datano data
Paul Ridley-Smith
Chairman of the Board4.2yrsNZ$176.50kno data
Kevin Baker
Non-Executive Director1.7yrsNZ$84.17kno data
Ian Knowles
Independent Director12.5yrsNZ$123.50k0.014% NZ$301.6k
Geoffrey Jon Swier
Independent Director13.1yrsNZ$118.50k0.020% NZ$450.8k
Susan Peterson
Independent Director4.5yrsNZ$118.50kno data

4.2yrs

Average Tenure

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

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


Key Information

  • Name: Trustpower Limited
  • Ticker: TPW
  • Exchange: NZSE
  • Founded: 1915
  • Industry: Electric Utilities
  • Sector: Utilities
  • Market Cap: NZ$2.210b
  • Shares outstanding: 312.98m
  • Website: https://www.trustpower.co.nz

Number of Employees


Location

  • Trustpower Limited
  • Trustpower Building
  • 108 Durham Street
  • Tauranga
  • 3110
  • New Zealand

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TPWNZSE (New Zealand Stock Exchange)YesOrdinary SharesNZNZDOct 2016

Biography

Trustpower Limited engages in the development, ownership, and operation of electricity generation facilities in New Zealand. It operates through Generation and Retail segments. The company is also involved in the retail sale of electricity and gas; and telecommunications services, which include wireless broadband and mobile services to homes and businesses. As of March 31, 2019, it operated approximately 267,000 electricity customer connections, 39,000 gas customer connections, and 96,000 telecommunications customer connections, as well as owned 27 hydropower schemes with a total installed capacity of 487 megawatts. The company was founded in 1915 and is headquartered in Tauranga, New Zealand. Trustpower Limited is a subsidiary of Infratil Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 10:51
End of Day Share Price2020/02/20 00:00
Earnings2019/09/30
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.