EVA Stock Overview
Enviva Inc. produces and sells utility-grade wood pellets.
Price History & Performance
|Historical stock prices|
|Current Share Price||US$66.24|
|52 Week High||US$91.06|
|52 Week Low||US$52.77|
|1 Month Change||-5.30%|
|3 Month Change||15.76%|
|1 Year Change||21.65%|
|3 Year Change||111.43%|
|5 Year Change||122.66%|
|Change since IPO||212.60%|
Recent News & Updates
Enviva: 2 Critical Upcoming Tests
Summary Despite a surprise corporate restructuring late in 2021, the numbers are still not stacking up for the dividends of Enviva. The second quarter saw some green shoots when digging into their cash flow performance, although nowhere near sufficient to fund their oversized dividend payments. The first of their critical upcoming tests centers around their cash conversion rate during the second half of 2022. The second test centers around their ability to continue accessing external capital from debt markets as their bond prices sell off similar to the panic of 2020. Given their junk credit rating, there are plenty of risks abound and thus I believe that maintaining my sell rating is appropriate. Introduction Despite a surprise corporate restructuring late in 2021, sadly the numbers are not still stacking up for the dividends of Enviva (EVA) and thus as my previous article warned, it leaves their moderate yield of 5.41% very risky. Whilst their dividends were sustained throughout the last few months, there are two critical upcoming tests to pass during the second half of 2022 to see them sustained heading into 2023, as discussed within this follow-up analysis that also reviews their subsequently released results for the second quarter of 2022. Executive Summary & Ratings Since many readers are likely short on time, the table below provides a very brief executive summary and ratings for the primary criteria that were assessed. This Google Document provides a list of all my equivalent ratings as well as more information regarding my rating system. The following section provides a detailed analysis for those readers who are wishing to dig deeper into their situation. Author *Instead of simply assessing dividend coverage through earnings per share cash flow, I prefer to utilize free cash flow since it provides the toughest criteria and also best captures the true impact upon their financial position. Detailed Analysis Author Following the first quarter of 2022 seeing operating cash flow of negative $42.9m, disappointingly, it continued during the second quarter with their result for the first half now down to negative $68.9m and thus leaving a result of negative $26m for the second quarter. Similar to the first quarter, this means that they endured a cash burn to merely operate their company, let alone fund any investments. If considering these, their capital expenditure of $97.4m and $4.9m of relatively minor miscellaneous cash expenses as listed beneath the graph included above, it ultimately leaves their free cash flow at negative $171.2m for the first half and by extension, their dividend payments of $105.6m are oversized. Admittedly, if digging deeper there are some green shoots, although relatively speaking, they appear far too small to rectify this problem. If removing their temporary working capital movements from their operating cash flow, it sees their underlying operating cash flow for the second quarter at $20.1m, as they saw a working capital build that weighed down their surface-level results. This is clearly better than the first half that saw an equivalent result of negative $16m but alas, even $20.1m per quarter of operating cash flow is relatively insignificant versus their capital expenditure and dividend payments. When looking ahead into the second half, it will be very interesting to see if their operating cash flow scales higher with their accrual-based earnings that are forecast to accelerate, as the graph included below displays. Enviva Second Quarter Of 2022 Results Presentation When examining the breakdown of their adjusted EBITDA guidance for 2022, it sees the third and fourth quarters accelerating versus the first and second quarters. The first of their two critical upcoming tests centers around the extent this translates into higher operating cash flow and whether it can exceed their dividend payments for the full year. As a reminder, to pass this test at the barest minimum, across the full year they need to generate enough operating cash flow to at least slightly exceed their dividend payments. Whilst dividend coverage would normally be assessed via free cash flow, given this special situation, it is more important that they first pass this easier test. No company, regardless of their industry can safely return more cash to shareholders than their operations generate, as the resulting debt funding to bridge the gap is guaranteed to result in higher leverage. Whilst the prospects for their financial performance to accelerate during the second half of 2022 are positive, thus far their results indicate that it would still be insufficient. If their underlying operating cash flow of $20.1m during the second quarter is compared against their adjusted EBITDA of $39.5m, it shows a cash conversion rate of roughly half, absent of temporary working capital movements. Unless this dramatically improves during the second half, even the $270m upper end of their adjusted EBITDA guidance would only equal operating cash flow of circa $135m, assuming no material working capital builds or draws. Since their dividend payments were $105.6m during the first half, naturally, the full year is going to see these north of $200m and possibly more, depending on whether they issue more equity as was routinely been the case in the past. Author Despite their underlying cash flow performance improvement during the second quarter of 2022, their oversized dividend payments made higher net debt unavoidable with it landing at $1.244b and thus 13.91% or $151.9m higher than its level of $1.092b when conducting the previous analysis following the first quarter. This is a particularly large increase to see from only one quarter and whilst this is merely back to essentially its same level at the end of 2021, the only reason it decreased during the first quarter of 2022 was due to a $333.6m equity issuance, which is now already been depleted, as was broadly expected when conducting my previous analysis. Unless they see dramatically higher cash flow performance during the second half of 2022, this could deplete their remaining capital very fast, as subsequently discussed, which is a very concerning prospect as monetary policy tightens and their bond yields rise significantly, as the graph included below displays. Finra Markets Via Morningstar It can be seen that the tighter monetary policy of 2022 is not being kind to their bonds, which have endured a sell-off that leaves their yield pushing towards heights not seen since the panic of 2020 when the Covid-19 pandemic rocked the financial system. Even though their yield at slightly over 7% is not too high in the grand scheme, its direction is nevertheless still concerning given their likely requirement to source new external capital, especially since central banks are very likely to further tighten monetary policy. The fact that their credit rating is also only B+ as seen above, it makes this situation even more precarious, as anything below BBB- is non-investment grade and commonly referred to as "junk". If they lean upon issuing equity, this would obviously make their already oversized dividend payments even more burdensome and thus not rectify anything. Similar to the previous analysis, as their operating cash flow is negative and remains barely positive even after removing their working capital build, it would be rather pointless to assess their leverage in detail. If viewing their gearing ratio, their equity of $433.8m sees it currently standing at 74.15% and thus unsurprisingly, it once again represents another increase versus its result of 68.55% when conducting the previous analysis following the first quarter 2022, thereby further pushing pass the threshold of 50.01% for the very high territory. Author Even though their liquidity was not been an area of concern in the past, if nothing else, it was positive to see it improving during the second quarter of 2022. Thanks to their working capital build, their respective current and cash ratios climbed to 0.96 and 0.05 versus their results of 0.79 and 0.02 when conducting the previous analysis following the first quarter. Whilst this once again ensures their liquidity is adequate, since monetary policy is widely expected to further tighten it will be important to monitor going forwards given their history of requiring external capital as a result of their oversized dividend payments.
Enviva (NYSE:EVA) Is Increasing Its Dividend To $0.905
Enviva Inc. ( NYSE:EVA ) has announced that it will be increasing its dividend from last year's comparable payment on...
|EVA||US Oil and Gas||US Market|
Return vs Industry: EVA underperformed the US Oil and Gas industry which returned 29.9% over the past year.
Return vs Market: EVA exceeded the US Market which returned -22.1% over the past year.
|EVA Average Weekly Movement||5.8%|
|Oil and Gas Industry Average Movement||8.1%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.8%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: EVA is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.
Volatility Over Time: EVA's weekly volatility (6%) has been stable over the past year.
About the Company
Enviva Inc. produces and sells utility-grade wood pellets. The company’s products are used as a substitute for coal in power generation, and combined heat and power plants. It serves power generators in the United Kingdom, Europe, and Japan.
Enviva Fundamentals Summary
|EVA fundamental statistics|
Is EVA overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|EVA income statement (TTM)|
|Cost of Revenue||US$853.74m|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
|Earnings per share (EPS)||-2.38|
|Net Profit Margin||-15.27%|
How did EVA perform over the long term?See historical performance and comparison
5.5%Current Dividend Yield
Is EVA undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 2/6
Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for EVA?
Other financial metrics that can be useful for relative valuation.
|What is EVA's n/a Ratio?|
Price to Sales Ratio vs Peers
How does EVA's PS Ratio compare to its peers?
|EVA PS Ratio vs Peers|
|Company||PS||Estimated Growth||Market Cap|
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Price-To-Sales vs Peers: EVA is expensive based on its Price-To-Sales Ratio (4.2x) compared to the peer average (1.2x).
Price to Earnings Ratio vs Industry
How does EVA's PE Ratio compare vs other companies in the US Oil and Gas Industry?
Price-To-Sales vs Industry: EVA is expensive based on its Price-To-Sales Ratio (4.2x) compared to the US Oil and Gas industry average (1.4x)
Price to Sales Ratio vs Fair Ratio
What is EVA's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PS Ratio||4.2x|
|Fair PS Ratio||1.1x|
Price-To-Sales vs Fair Ratio: EVA is expensive based on its Price-To-Sales Ratio (4.2x) compared to the estimated Fair Price-To-Sales Ratio (1.1x).
Share Price vs Fair Value
What is the Fair Price of EVA when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: EVA ($66.24) is trading below our estimate of fair value ($476.13)
Significantly Below Fair Value: EVA is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is less than 20% higher than the current share price.
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How is Enviva forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?
Future Growth Score5/6
Future Growth Score 5/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: EVA is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.9%).
Earnings vs Market: EVA is forecast to become profitable over the next 3 years, which is considered above average market growth.
High Growth Earnings: EVA is expected to become profitable in the next 3 years.
Revenue vs Market: EVA's revenue (22% per year) is forecast to grow faster than the US market (7.6% per year).
High Growth Revenue: EVA's revenue (22% per year) is forecast to grow faster than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: EVA's Return on Equity is forecast to be low in 3 years time (19.7%).
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How has Enviva performed over the past 5 years?
Past Performance Score0/6
Past Performance Score 0/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: EVA is currently unprofitable.
Growing Profit Margin: EVA is currently unprofitable.
Past Earnings Growth Analysis
Earnings Trend: EVA is unprofitable, and losses have increased over the past 5 years at a rate of 70.5% per year.
Accelerating Growth: Unable to compare EVA's earnings growth over the past year to its 5-year average as it is currently unprofitable
Earnings vs Industry: EVA is unprofitable, making it difficult to compare its past year earnings growth to the Oil and Gas industry (184.6%).
Return on Equity
High ROE: EVA has a negative Return on Equity (-39.17%), as it is currently unprofitable.
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How is Enviva's financial position?
Financial Health Score0/6
Financial Health Score 0/6
Short Term Liabilities
Long Term Liabilities
Stable Cash Runway
Forecast Cash Runway
Financial Position Analysis
Short Term Liabilities: EVA's short term assets ($226.9M) do not cover its short term liabilities ($235.3M).
Long Term Liabilities: EVA's short term assets ($226.9M) do not cover its long term liabilities ($1.4B).
Debt to Equity History and Analysis
Debt Level: EVA's net debt to equity ratio (286.9%) is considered high.
Reducing Debt: EVA's debt to equity ratio has increased from 119.6% to 289.8% over the past 5 years.
Cash Runway Analysis
For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.
Stable Cash Runway: EVA has less than a year of cash runway based on its current free cash flow.
Forecast Cash Runway: EVA has less than a year of cash runway if free cash flow continues to reduce at historical rates of 50.6% each year
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What is Enviva current dividend yield, its reliability and sustainability?
Dividend Score 2/6
Cash Flow Coverage
Current Dividend Yield
Dividend Yield vs Market
|Enviva Dividend Yield vs Market|
|Market Bottom 25% (US)||1.6%|
|Market Top 25% (US)||4.6%|
|Industry Average (Oil and Gas)||4.9%|
|Analyst forecast in 3 Years (Enviva)||5.6%|
Notable Dividend: EVA's dividend (5.46%) is higher than the bottom 25% of dividend payers in the US market (1.67%).
High Dividend: EVA's dividend (5.46%) is in the top 25% of dividend payers in the US market (4.69%)
Stability and Growth of Payments
Stable Dividend: Whilst dividend payments have been stable, EVA has been paying a dividend for less than 10 years.
Growing Dividend: EVA's dividend payments have increased, but the company has only paid a dividend for 7 years.
Earnings Payout to Shareholders
Earnings Coverage: EVA is paying a dividend but the company is unprofitable.
Cash Payout to Shareholders
Cash Flow Coverage: EVA is paying a dividend but the company has no free cash flows.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
John Keppler (51 yo)
Mr. John K. Keppler serves as Chairman and Chief Executive Officer at Enviva Inc. (Formerly, Enviva Partners, LP) since November 12, 2013. He had been President of Enviva Inc. since November 2013 until May...
CEO Compensation Analysis
|John Keppler's Compensation vs Enviva Earnings|
|Date||Total Comp.||Salary||Company Earnings|
|Jun 30 2022||n/a||n/a|
|Mar 31 2022||n/a||n/a|
|Dec 31 2021||US$6m||US$817k|
|Sep 30 2021||n/a||n/a|
|Jun 30 2021||n/a||n/a|
|Mar 31 2021||n/a||n/a|
|Dec 31 2020||US$3m||US$183k|
|Sep 30 2020||n/a||n/a|
|Jun 30 2020||n/a||n/a|
|Mar 31 2020||n/a||n/a|
|Dec 31 2019||US$1m||US$171k|
|Sep 30 2019||n/a||n/a|
|Jun 30 2019||n/a||n/a|
|Mar 31 2019||n/a||n/a|
|Dec 31 2018||US$1m||US$190k|
|Sep 30 2018||n/a||n/a|
|Jun 30 2018||n/a||n/a|
|Mar 31 2018||n/a||n/a|
|Dec 31 2017||US$1m||US$214k|
|Sep 30 2017||n/a||n/a|
|Jun 30 2017||n/a||n/a|
|Mar 31 2017||n/a||n/a|
|Dec 31 2016||US$1m||US$213k|
|Sep 30 2016||n/a||n/a|
|Jun 30 2016||n/a||n/a|
|Mar 31 2016||n/a||n/a|
|Dec 31 2015||US$871k||US$211k|
Compensation vs Market: John's total compensation ($USD6.21M) is about average for companies of similar size in the US market ($USD6.87M).
Compensation vs Earnings: John's compensation has increased whilst the company is unprofitable.
Experienced Management: EVA's management team is considered experienced (2.8 years average tenure).
Experienced Board: EVA's board of directors are considered experienced (3.2 years average tenure).
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
|23 Jun 22||BuyUS$253,055||Shai Even||Individual||4,300||US$58.85|
|23 Jun 22||BuyUS$994,650||John Keppler||Individual||16,422||US$61.00|
|23 Jun 22||BuyUS$505,508||Thomas Meth||Individual||8,600||US$58.78|
|10 May 22||BuyUS$994,540||John Bumgarner||Individual||13,600||US$74.20|
|07 Mar 22||SellUS$37,818,425||Inclusive Capital Partners, L.P.||Company||501,691||US$79.79|
|07 Mar 22||SellUS$37,818,425||Inclusive Capital Partners, L.P.||Company||501,691||US$79.79|
|04 Mar 22||BuyUS$249,567||Ralph Alexander||Individual||3,234||US$77.28|
|Owner Type||Number of Shares||Ownership Percentage|
|State or Government||12,946||0.02%|
Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 48.4%.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
Enviva Inc.'s employee growth, exchange listings and data sources
- Name: Enviva Inc.
- Ticker: EVA
- Exchange: NYSE
- Founded: 2013
- Industry: Coal and Consumable Fuels
- Sector: Energy
- Implied Market Cap: US$4.425b
- Shares outstanding: 66.80m
- Website: https://www.envivabiomass.com
Number of Employees
- Enviva Inc.
- 7272 Wisconsin Avenue
- Suite 1800
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|EVA||NYSE (New York Stock Exchange)||Yes||Common Stock||US||USD||Apr 2015|
|XV6||DB (Deutsche Boerse AG)||Yes||Common Stock||DE||EUR||Apr 2015|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/09/28 00:00|
|End of Day Share Price||2022/09/28 00:00|
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.