NZSE:TPW

Stock Analysis Report

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Executive Summary

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


Snowflake Analysis

Solid track record with adequate balance sheet.


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 is not significantly more volatile than the rest of NZ stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: TPW's weekly volatility (4%) has been stable over the past year.


Market Performance


7 Day Return

0.9%

TPW

-6.3%

NZ Electric Utilities

-4.0%

NZ Market


1 Year Return

19.3%

TPW

26.1%

NZ Electric Utilities

7.9%

NZ Market

Return vs Industry: TPW underperformed the NZ Electric Utilities industry which returned 26.2% over the past year.

Return vs Market: TPW exceeded the NZ Market which returned 8% over the past year.


Shareholder returns

TPWIndustryMarket
7 Day0.9%-6.3%-4.0%
30 Day14.0%10.8%2.4%
90 Day13.4%24.7%7.4%
1 Year25.6%19.3%32.8%26.1%11.9%7.9%
3 Year87.7%48.8%118.7%83.5%53.6%33.2%
5 Yearn/a127.1%68.7%109.4%58.7%

Long-Term 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?

1.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TPW (NZ$8.78) is trading below our estimate of fair value (NZ$8.89)

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 good value based on its PE Ratio (30.5x) compared to the NZ Electric Utilities industry average (45.5x).

PE vs Market: TPW is poor value based on its PE Ratio (30.5x) compared to the NZ market (25.2x).


Price to Earnings Growth Ratio

PEG Ratio: TPW is poor value based on its PEG Ratio (3x)


Price to Book Ratio

PB vs Industry: TPW's PB Ratio (2.6x) is in line with the NZ Electric Utilities industry average.


Next Steps

Future Growth

How is Trustpower forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

10.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TPW's forecast earnings growth (10.3% per year) is above the savings rate (2.3%).

Earnings vs Market: TPW's earnings (10.3% per year) are forecast to grow slower than the NZ market (11.3% 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 (-0.9% per year).

High Growth Revenue: TPW's revenue is forecast to decline over the next 3 years (-0.9% 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 (9.4%).


Next Steps

Past Performance

How has Trustpower performed over the past 5 years?

1.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TPW has high quality earnings.

Growing Profit Margin: TPW's current net profit margins (9.4%) are higher than last year (6.2%).


Past Earnings Growth Analysis

Earnings Trend: TPW's earnings have grown by 1.3% per year over the past 5 years.

Accelerating Growth: TPW's earnings growth over the past year (38.4%) exceeds its 5-year average (1.3% per year).

Earnings vs Industry: TPW earnings growth over the past year (38.4%) exceeded the Electric Utilities industry -21.9%.


Return on Equity

High ROE: TPW's Return on Equity (8.4%) is considered low.


Next Steps

Financial Health

How is Trustpower's financial position?


Financial Position Analysis

Short Term Liabilities: TPW's short term assets (NZ$210.9M) exceed its short term liabilities (NZ$128.4M).

Long Term Liabilities: TPW's short term assets (NZ$210.9M) do not cover its long term liabilities (NZ$946.3M).


Debt to Equity History and Analysis

Debt Level: TPW's debt to equity ratio (61.7%) is considered high.

Reducing Debt: TPW's debt to equity ratio has reduced from 67.9% to 61.7% over the past 5 years.

Debt Coverage: TPW's debt is well covered by operating cash flow (24.4%).

Interest Coverage: TPW's interest payments on its debt are well covered by EBIT (4.5x coverage).


Balance Sheet


Next Steps

Dividend

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

5.24%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: TPW's dividend (5.24%) is higher than the bottom 25% of dividend payers in the NZ market (2.39%).

High Dividend: TPW's dividend (5.24%) is in the top 25% of dividend payers in the NZ market (4.1%)


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 4 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (112.8%), 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?

0.6yrs

Average management tenure


CEO

David Prentice (50 yo)

1

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
CEO & Non-Independent Director1yrno datano data
Kevin Palmer
CFO & Company Secretary4.08yrsno data0.010%
NZ$ 283.0k
Matthew van Deventer
General Manager of Technology & Delivery0.083yrno data0.0049%
NZ$ 133.8k
Sara Broadhurst
General Manager of People & Culture0.25yrno datano data

0.6yrs

Average Tenure

Experienced Management: TPW's management team is not considered experienced ( 0.6 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
David Prentice
CEO & Non-Independent Director1yrno datano data
Peter Coman
Non-Independent Director0.17yrno data0.087%
NZ$ 2.4m
Keith Turner
Non Independent Director1.5yrsno data0.0024%
NZ$ 65.9k
Paul Ridley-Smith
Chairman of the Board5.08yrsNZ$176.50kno data
Kevin Baker
Non Independent Director2.58yrsNZ$84.17kno data
David Edward Gibson
Independent Director0.33yrno data0.0017%
NZ$ 45.9k
Susan Peterson
Independent Director5.42yrsNZ$118.50kno data

1.5yrs

Average Tenure

Experienced Board: TPW's board of directors are not considered experienced ( 1.5 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: 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$2.748b
  • Shares outstanding: 312.97m
  • 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...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/01/16 06:04
End of Day Share Price2021/01/15 00:00
Earnings2020/09/30
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.