NYSE:AES

Stock Analysis Report

Executive Summary

The AES Corporation operates as a diversified power generation and utility company.


Snowflake Analysis

Reasonable growth potential and slightly overvalued.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: AES's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

3.4%

AES

-0.2%

US Renewable Energy

2.4%

US Market


1 Year Return

-26.7%

AES

-14.5%

US Renewable Energy

-10.0%

US Market

Return vs Industry: AES underperformed the US Renewable Energy industry which returned -14.5% over the past year.

Return vs Market: AES underperformed the US Market which returned -10% over the past year.


Shareholder returns

AESIndustryMarket
7 Day3.4%-0.2%2.4%
30 Day-9.3%-18.1%-11.0%
90 Day-34.7%-21.3%-19.4%
1 Year-24.4%-26.7%-11.6%-14.5%-8.1%-10.0%
3 Year30.2%16.4%22.7%9.7%17.3%9.6%
5 Year19.5%-0.9%-1.2%-24.5%36.1%21.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AES ($13.23) is trading below our estimate of fair value ($27.31)

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


Price To Earnings Ratio

PE vs Industry: AES is poor value based on its PE Ratio (29.1x) compared to the Renewable Energy industry average (23.5x).

PE vs Market: AES is poor value based on its PE Ratio (29.1x) compared to the US market (13x).


Price to Earnings Growth Ratio

PEG Ratio: AES is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: AES is overvalued based on its PB Ratio (2.9x) compared to the US Renewable Energy industry average (1.5x).


Next Steps

Future Growth

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

23.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AES's forecast earnings growth (23.3% per year) is above the savings rate (1.7%).

Earnings vs Market: AES's earnings (23.3% per year) are forecast to grow faster than the US market (13.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: AES's revenue (3.9% per year) is forecast to grow slower than the US market (7% per year).

High Growth Revenue: AES's revenue (3.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AES's Return on Equity is forecast to be high in 3 years time (25%)


Next Steps

Past Performance

How has AES performed over the past 5 years?

-14.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AES has a large one-off loss of $322.0M impacting its December 31 2019 financial results.

Growing Profit Margin: AES's current net profit margins (3%) are lower than last year (9.2%).


Past Earnings Growth Analysis

Earnings Trend: AES's earnings have declined by -14.5% per year over the past 5 years.

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

Earnings vs Industry: AES had negative earnings growth (-69.3%) over the past year, making it difficult to compare to the Renewable Energy industry average (-10.1%).


Return on Equity

High ROE: AES's Return on Equity (9%) is considered low.


Next Steps

Financial Health

How is AES's financial position?


Financial Position Analysis

Short Term Liabilities: AES's short term assets ($5.2B) exceed its short term liabilities ($5.1B).

Long Term Liabilities: AES's short term assets ($5.2B) do not cover its long term liabilities ($23.3B).


Debt to Equity History and Analysis

Debt Level: AES's debt to equity ratio (380.1%) is considered high.

Reducing Debt: AES's debt to equity ratio has increased from 281.9% to 380.1% over the past 5 years.

Debt Coverage: AES's debt is not well covered by operating cash flow (11.9%).

Interest Coverage: AES's interest payments on its debt are not well covered by EBIT (2.9x coverage).


Balance Sheet


Next Steps

Dividend

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

4.33%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: AES's dividend (4.33%) is higher than the bottom 25% of dividend payers in the US market (1.93%).

High Dividend: AES's dividend (4.33%) is low compared to the top 25% of dividend payers in the US market (5.46%).


Stability and Growth of Payments

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

Growing Dividend: AES's dividend payments have increased, but the company has only paid a dividend for 7 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (120%), AES's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AES's dividends in 3 years are forecast to be well covered by earnings (38.8% payout ratio).


Next Steps

Management

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

5.3yrs

Average management tenure


CEO

Andrés Ricardo Gluski Weilert (61yo)

8.58s

Tenure

US$10,827,886

Compensation

Mr. Andrés Ricardo Gluski Weilert has been the Chief Executive Officer and President of The AES Corporation since September 30, 2011. Mr. Weilert served as the President of AES Gener S.A. He served as the  ...


CEO Compensation Analysis

Compensation vs Market: Andrés Ricardo's total compensation ($USD10.83M) is above average for companies of similar size in the US market ($USD7.52M).

Compensation vs Earnings: Andrés Ricardo's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Andrés Ricardo Gluski Weilert
President8.58yrsUS$10.83m0.22% $19.1m
Gustavo Duarte Pimenta
Executive VP & CFO1.42yrsUS$2.36m0.0084% $743.2k
Bernerd Da Santos
Executive VP & COO5.33yrsUS$3.29m0.027% $2.3m
Letitia Mendoza
Senior VP of Global HR & Internal Communication and Chief Human Resources Officer5.25yrsUS$1.78m0.018% $1.6m
Julian Jose Marques
Senior VP & President of South America SBU1.5yrsUS$2.33mno data
Leonardo Moreno
Senior VP of Corporate Strategy & Investment and Chief Commercial Officerno datano data0.0043% $374.7k
Sanjeev Addala
Chief Information Digital Officer & Senior VP1.5yrsno datano data
Ahmed Pasha
Vice President of Investor Relations13.08yrsno datano data
Paul Freedman
Senior VP2.17yrsno data0.0029% $255.9k
Joel Abramson
Chief Financial Officer of Generation8.42yrsno datano data

5.3yrs

Average Tenure

50.5yo

Average Age

Experienced Management: AES's management team is seasoned and experienced (5.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Andrés Ricardo Gluski Weilert
President8.58yrsUS$10.83m0.22% $19.1m
John Morse
Chairman & Lead Independent Director2yrsUS$467.10k0.0016% $145.1k
James Miller
Independent Director6.83yrsUS$270.00kno data
Jeffrey Ubben
Independent Director2.25yrsUS$260.00kno data
Alain Monié
Independent Director2.75yrsUS$275.84k0.00020% $17.6k
Janet Davidson
Independent Director1.17yrsUS$348.11kno data
Holly Koeppel
Independent Director5yrsUS$283.09kno data
Moises Naim
Independent Director7yrsUS$270.84kno data
Charles Harrington
Independent Director6.33yrsUS$290.84kno data
Tarun Khanna
Independent Director11yrsUS$263.84k0.00065% $57.2k

5.7yrs

Average Tenure

62yo

Average Age

Experienced Board: AES's board of directors are considered experienced (5.7 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: AES 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

The AES Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The AES Corporation
  • Ticker: AES
  • Exchange: NYSE
  • Founded: 1981
  • Industry: Independent Power Producers and Energy Traders
  • Sector: Utilities
  • Market Cap: US$8.795b
  • Shares outstanding: 664.77m
  • Website: https://www.aes.com

Number of Employees


Location

  • The AES Corporation
  • 4300 Wilson Boulevard
  • 11th Floor
  • Arlington
  • Virginia
  • 22203
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AESNYSE (New York Stock Exchange)YesCommon StockUSUSDJun 1991
AESDB (Deutsche Boerse AG)YesCommon StockDEEURJun 1991
0H6GLSE (London Stock Exchange)YesCommon StockGBUSDJun 1991
AESCHFBRSE (Berne Stock Exchange)YesCommon StockCHCHFJun 1991
AES *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJun 1991
A1ES34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 1 REPR 1 SHS UNSPONBRBRLJan 2020

Biography

The AES Corporation operates as a diversified power generation and utility company. It owns and/or operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries. The company also owns and/or operates utilities to generate or purchase, distribute, transmit, and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors; and generates and sells electricity on the wholesale market. It uses a range of fuels to generate electricity, including natural gas, coal, pet coke, diesel, and oil, as well as renewables, such as hydro, solar, wind, energy storage, biomass, and landfill gas. The company owns and/or operates a generation portfolio of approximately 31,792 megawatts. It has operations in the United States, El Salvador, Chile, Colombia, Argentina, Brazil, Mexico, Central America, the Caribbean, Europe, and Asia. The company was formerly known as Applied Energy Services, Inc. and changed its name to The AES Corporation in April 2000. The AES Corporation was founded in 1981 and is headquartered in Arlington, Virginia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/08 06:27
End of Day Share Price2020/04/07 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.