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EVA

Enviva NYSE:EVA Stock Report

Last Price

US$63.21

Market Cap

US$4.2b

7D

-8.9%

1Y

15.1%

Updated

27 Sep, 2022

Data

Company Financials +
EVA fundamental analysis
Snowflake Score
Valuation3/6
Future Growth5/6
Past Performance0/6
Financial Health0/6
Dividends2/6

EVA Stock Overview

Enviva Inc. produces and sells utility-grade wood pellets.

Enviva Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Enviva
Historical stock prices
Current Share PriceUS$63.21
52 Week HighUS$91.06
52 Week LowUS$52.77
Beta1.14
1 Month Change-12.12%
3 Month Change6.22%
1 Year Change15.12%
3 Year Change101.76%
5 Year Change112.11%
Change since IPO198.30%

Recent News & Updates

Sep 07

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.

Aug 07
Enviva (NYSE:EVA) Is Increasing Its Dividend To $0.905

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...

Shareholder Returns

EVAUS Oil and GasUS Market
7D-8.9%-10.0%-5.8%
1Y15.1%29.9%-22.1%

Return vs Industry: EVA underperformed the US Oil and Gas industry which returned 28% over the past year.

Return vs Market: EVA exceeded the US Market which returned -23.7% over the past year.

Price Volatility

Is EVA's price volatile compared to industry and market?
EVA volatility
EVA Average Weekly Movement5.9%
Oil and Gas Industry Average Movement8.1%
Market Average Movement6.9%
10% most volatile stocks in US Market15.7%
10% least volatile stocks in US Market2.8%

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

FoundedEmployeesCEOWebsite
20131,196John Kepplerhttps://www.envivabiomass.com

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

How do Enviva's earnings and revenue compare to its market cap?
EVA fundamental statistics
Market CapUS$4.22b
Earnings (TTM)-US$159.31m
Revenue (TTM)US$1.04b

4.0x

P/S Ratio

-26.5x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
EVA income statement (TTM)
RevenueUS$1.04b
Cost of RevenueUS$853.74m
Gross ProfitUS$189.66m
Other ExpensesUS$348.97m
Earnings-US$159.31m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)-2.38
Gross Margin18.18%
Net Profit Margin-15.27%
Debt/Equity Ratio289.8%

How did EVA perform over the long term?

See historical performance and comparison

Dividends

5.7%

Current Dividend Yield

-111%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is EVA undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

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.

EVA key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue5.3x
Enterprise Value/EBITDA150.7x
PEG Ration/a

Price to Sales Ratio vs Peers

How does EVA's PS Ratio compare to its peers?

EVA PS Ratio vs Peers
The above table shows the PS ratio for EVA vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPSEstimated GrowthMarket Cap
Peer Average1.1x
ARCH Arch Resources
0.6x-19.4%US$2.2b
ARLP Alliance Resource Partners
1.5x11.4%US$2.9b
CEIX CONSOL Energy
1.4x9.6%US$2.2b
BTU Peabody Energy
0.8x-3.9%US$3.2b
EVA Enviva
4x22.0%US$4.2b

Price-To-Sales vs Peers: EVA is expensive based on its Price-To-Sales Ratio (4x) compared to the peer average (1.1x).


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 (4x) 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.

EVA PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio4x
Fair PS Ratio1.1x

Price-To-Sales vs Fair Ratio: EVA is expensive based on its Price-To-Sales Ratio (4x) 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 ($63.21) is trading below our estimate of fair value ($473.58)

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 more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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Future Growth

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

Future Growth Score

5/6

Future Growth Score 5/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


60.4%

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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Past Performance

How has Enviva performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-70.5%

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.


Discover strong past performing companies

Financial Health

How is Enviva's financial position?

Financial Health Score

0/6

Financial Health Score 0/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • 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.


Balance Sheet


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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Dividend

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

Dividend Score

2/6

Dividend Score 2/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


5.73%

Current Dividend Yield

Dividend Yield vs Market

Enviva Dividend Yield vs Market
How does Enviva dividend yield compare to the market?
SegmentDividend Yield
Company (Enviva)5.7%
Market Bottom 25% (US)1.7%
Market Top 25% (US)4.7%
Industry Average (Oil and Gas)5.2%
Analyst forecast in 3 Years (Enviva)5.9%

Notable Dividend: EVA's dividend (5.73%) is higher than the bottom 25% of dividend payers in the US market (1.67%).

High Dividend: EVA's dividend (5.73%) is in the top 25% of dividend payers in the US market (4.68%)


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.


Discover strong dividend paying companies

Management

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

2.8yrs

Average management tenure


CEO

John Keppler (51 yo)

8.83yrs

Tenure

US$6,205,730

Compensation

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
How has John Keppler's remuneration changed compared to Enviva's earnings?
DateTotal Comp.SalaryCompany Earnings
Jun 30 2022n/an/a

-US$159m

Mar 31 2022n/an/a

-US$152m

Dec 31 2021US$6mUS$817k

-US$122m

Sep 30 2021n/an/a

-US$132m

Jun 30 2021n/an/a

-US$127m

Mar 31 2021n/an/a

-US$106m

Dec 31 2020US$3mUS$183k

-US$86m

Sep 30 2020n/an/a

-US$7m

Jun 30 2020n/an/a

US$5m

Mar 31 2020n/an/a

-US$3m

Dec 31 2019US$1mUS$171k

-US$82m

Sep 30 2019n/an/a

-US$6m

Jun 30 2019n/an/a

US$551k

Mar 31 2019n/an/a

US$10m

Dec 31 2018US$1mUS$190k

US$1m

Sep 30 2018n/an/a

US$65k

Jun 30 2018n/an/a

-US$6m

Mar 31 2018n/an/a

-US$5m

Dec 31 2017US$1mUS$214k

US$17m

Sep 30 2017n/an/a

US$2m

Jun 30 2017n/an/a

US$10m

Mar 31 2017n/an/a

US$18m

Dec 31 2016US$1mUS$213k

US$24m

Sep 30 2016n/an/a

US$41m

Jun 30 2016n/an/a

US$35m

Mar 31 2016n/an/a

US$29m

Dec 31 2015US$871kUS$211k

US$19m

Compensation vs Market: John's total compensation ($USD6.21M) is about average for companies of similar size in the US market ($USD6.90M).

Compensation vs Earnings: John's compensation has increased whilst the company is unprofitable.


Leadership Team

Experienced Management: EVA's management team is considered experienced (2.8 years average tenure).


Board Members

Experienced Board: EVA's board of directors are considered experienced (3.2 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

NYSE:EVA Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
23 Jun 22BuyUS$253,055Shai EvenIndividual4,300US$58.85
23 Jun 22BuyUS$994,650John KepplerIndividual16,422US$61.00
23 Jun 22BuyUS$505,508Thomas MethIndividual8,600US$58.78
10 May 22BuyUS$994,540John BumgarnerIndividual13,600US$74.20
07 Mar 22SellUS$37,818,425Inclusive Capital Partners, L.P.Company501,691US$79.79
07 Mar 22SellUS$37,818,425Inclusive Capital Partners, L.P.Company501,691US$79.79
04 Mar 22BuyUS$249,567Ralph AlexanderIndividual3,234US$77.28

Ownership Breakdown

What is the ownership structure of EVA?
Owner TypeNumber of SharesOwnership Percentage
State or Government12,9460.02%
Individual Insiders2,968,3274.4%
Hedge Funds5,212,2967.8%
General Public8,059,43412.1%
Institutions22,753,50234.1%
VC/PE Firms27,797,92341.6%

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 48.4%.


Top Shareholders

Top 25 shareholders own 77.79% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
41.61%
Riverstone Holdings LLC
27,797,923$1.8b0%85.15%
7.8%
Inclusive Capital Partners, L.P.
5,212,296$329.5m0%27.59%
4.79%
Capital Research and Management Company
3,200,748$202.3m1616.53%0.01%
3.89%
The Vanguard Group, Inc.
2,598,340$164.2m5.69%no data
2.61%
FMR LLC
1,742,234$110.1m-52.77%0.01%
2.3%
BlackRock, Inc.
1,538,583$97.3m309.47%no data
1.96%
State Street Global Advisors, Inc.
1,310,007$82.8m1306.1%no data
1.56%
Kayne Anderson Capital Advisors, L.P.
1,044,941$66.1m54.1%1.75%
1.09%
American Century Investment Management Inc
728,126$46.0m-38.93%0.03%
1.08%
John Keppler
719,598$45.5m0.3%no data
0.98%
GW&K Investment Management, LLC
653,699$41.3m18.09%0.45%
0.97%
Invesco Ltd.
650,483$41.1m0%0.01%
0.7%
ClearBridge Investments, LLC
464,378$29.4m8.4%0.03%
0.65%
Harvest Fund Advisors LLC
437,236$27.6m-7.02%0.43%
0.64%
Thomas Meth
427,671$27.0m0.33%no data
0.59%
Wesley Schmidt
395,068$25.0m0.33%no data
0.59%
William Schmidt
391,556$24.8m0%no data
0.57%
Forge First Asset Management Inc.
384,051$24.3m0%7.21%
0.54%
Shai Even
360,416$22.8m0.36%no data
0.52%
Geode Capital Management, LLC
346,767$21.9m47.48%no data
0.52%
North Star Investment Management Corporation
344,154$21.8m13.07%2.1%
0.48%
Morgan Stanley, Investment Banking and Brokerage Investments
322,123$20.4m24.48%no data
0.48%
Duff & Phelps Investment Management Co.
320,796$20.3m35.99%0.23%
0.44%
Gagnon Securities LLC
292,068$18.5m-1.76%4.08%
0.43%
Macquarie Investment Management Business Trust
285,010$18.0m9.98%0.02%

Company Information

Enviva Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Enviva Inc.
  • Ticker: EVA
  • Exchange: NYSE
  • Founded: 2013
  • Industry: Coal and Consumable Fuels
  • Sector: Energy
  • Implied Market Cap: US$4.223b
  • Shares outstanding: 66.80m
  • Website: https://www.envivabiomass.com

Number of Employees


Location

  • Enviva Inc.
  • 7272 Wisconsin Avenue
  • Suite 1800
  • Bethesda
  • Maryland
  • 20814
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
EVANYSE (New York Stock Exchange)YesCommon StockUSUSDApr 2015
XV6DB (Deutsche Boerse AG)YesCommon StockDEEURApr 2015

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/27 00:00
End of Day Share Price2022/09/27 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


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.