NYSE:AGR

Stock Analysis Report

Executive Summary

Avangrid, Inc. operates as an energy services holding company in the United States.

Rewards

Earnings are forecast to grow 13.43% per year

Earnings grew by 49.4% over the past year

Risk Analysis

Has a high level of debt

Dividend of 3.47% is not well covered by earnings



Snowflake Analysis

Solid track record with imperfect balance sheet.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

1.3%

AGR

4.0%

US Electric Utilities

2.0%

US Market


1 Year Return

4.1%

AGR

27.2%

US Electric Utilities

23.6%

US Market

Return vs Industry: AGR underperformed the US Electric Utilities industry which returned 24.9% over the past year.

Return vs Market: AGR underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

AGRIndustryMarket
7 Day1.3%4.0%2.0%
30 Day-1.2%4.5%3.9%
90 Day0.7%5.9%12.0%
1 Year7.8%4.1%31.5%27.2%26.2%23.6%
3 Year47.7%32.7%52.7%37.7%53.2%43.3%
5 Yearn/a62.1%34.8%75.7%56.3%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

26.58x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: AGR ($50.79) is trading above our estimate of fair value ($32.51)

Significantly Below Fair Value: AGR is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: AGR is poor value based on its PE Ratio (26.4x) compared to the Electric Utilities industry average (25x).

PE vs Market: AGR is poor value based on its PE Ratio (26.4x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: AGR is poor value based on its PEG Ratio (2x)


Price to Book Ratio

PB vs Industry: AGR is good value based on its PB Ratio (1x) compared to the US Electric Utilities industry average (2.3x).


Next Steps

Future Growth

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

9.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AGR's forecast earnings growth (13.4% per year) is above the savings rate (1.7%).

Earnings vs Market: AGR's earnings (13.4% per year) are forecast to grow slower than the US market (14.3% per year).

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

Revenue vs Market: AGR's revenue (3.7% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: AGR's revenue (3.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AGR's Return on Equity is forecast to be low in 3 years time (4.9%).


Next Steps

Past Performance

How has Avangrid performed over the past 5 years?

14.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AGR has high quality earnings.

Growing Profit Margin: AGR's current net profit margins (9.3%) are higher than last year (6.3%).


Past Earnings Growth Analysis

Earnings Trend: AGR's earnings have grown by 14.7% per year over the past 5 years.

Accelerating Growth: AGR's earnings growth over the past year (49.4%) exceeds its 5-year average (14.7% per year).

Earnings vs Industry: AGR earnings growth over the past year (49.4%) exceeded the Electric Utilities industry 2%.


Return on Equity

High ROE: AGR's Return on Equity (3.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Avangrid's financial position?


Financial Position Analysis

Short Term Liabilities: AGR's short term assets ($1.9B) do not cover its short term liabilities ($2.8B).

Long Term Liabilities: AGR's short term assets ($1.9B) do not cover its long term liabilities ($15.2B).


Debt to Equity History and Analysis

Debt Level: AGR's debt to equity ratio (48.8%) is considered high.

Reducing Debt: AGR's debt to equity ratio has increased from 27.8% to 48.8% over the past 5 years.

Debt Coverage: AGR's debt is well covered by operating cash flow (22.7%).

Interest Coverage: AGR's interest payments on its debt are well covered by EBIT (3x coverage).


Balance Sheet

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

Debt Coverage by Assets: AGR's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

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

3.44%

Current Dividend Yield


Dividend Yield vs Market

company3.4%marketbottom25%1.4%markettop25%3.7%industryaverage3.0%forecastin3Years3.6%

Current dividend yield vs market & industry

Notable Dividend: AGR's dividend (3.47%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: AGR's dividend (3.47%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

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

Growing Dividend: AGR'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 (91.4%), AGR's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AGR's dividends in 3 years are forecast to be covered by earnings (67.1% payout ratio).


Next Steps

Management

What is the CEO of Avangrid's salary, the management and board of directors tenure and is there insider trading?

4.1yrs

Average management tenure


CEO

Jim Torgerson (67yo)

4.1yrs

Tenure

US$5,709,436

Compensation

Mr. James P. Torgesrson, also known as Jim, has been Chief Executive Officer at Avangrid, Inc. since December 16, 2015. Mr. Torgesrson has financial and business experience. He served as an Executive Direc ...


CEO Compensation Analysis

Compensation vs Market: Jim's total compensation ($USD5.71M) is below average for companies of similar size in the US market ($USD10.76M).

Compensation vs Earnings: Jim's compensation has increased by more than 20% in the past year.


Management Age and Tenure

4.1yrs

Average Tenure

55yo

Average Age

Experienced Management: AGR's management team is considered experienced (4.1 years average tenure).


Board Age and Tenure

4.5yrs

Average Tenure

65yo

Average Age

Experienced Board: AGR's board of directors are considered experienced (4.5 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$48,95129 Jul 19
Teresa Ellen Herbert
EntityIndividual
Shares1,000
Max PriceUS$48.95

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • F. McClain (70yo)

    Chief Development Officer

    • Tenure: 19.3yrs
    • Compensation: US$1.61m
  • Bob Kump (58yo)

    Deputy CEO & President

    • Tenure: 0.6yrs
    • Compensation: US$2.16m
  • Karen Zink (62yo)

    President & COO of the Berkshire Gas Co.

    • Tenure: 16yrs
  • R. Mahoney (53yo)

    Senior VP

    • Tenure: 4.1yrs
    • Compensation: US$1.09m
  • Jim Torgerson (67yo)

    CEO & Director

    • Tenure: 4.1yrs
    • Compensation: US$5.71m
  • Patricia Cosgel

    Vice President Investor & Shareholder Relations

    • Tony Marone (55yo)

      President of AVANGRID Networks & CEO of AVANGRID Networks

      • Tenure: 0.6yrs
    • Douglas Stuver (55yo)

      Senior VP & CFO

      • Tenure: 1.5yrs
      • Compensation: US$993.07k
    • Ignacio Estella (49yo)

      Senior Vice President of Corporate Development

      • Tenure: 4.1yrs
    • Peter Church (46yo)

      Senior VP of Human Resources & Corporate Administration

      • Tenure: 1.3yrs
      • Compensation: US$1.12m

    Board Members

    • John Lahey (72yo)

      Independent Non-Executive Director

      • Tenure: 4.1yrs
      • Compensation: US$170.00k
    • Alan Solomont (70yo)

      Independent Non-Executive Director

      • Tenure: 6yrs
      • Compensation: US$200.00k
    • Jim Torgerson (67yo)

      CEO & Director

      • Tenure: 4.1yrs
      • Compensation: US$5.71m
    • José Sainz Armada (60yo)

      Director

      • Tenure: 6yrs
      • Compensation: US$140.00k
    • Pedro Azagra Blázquez (51yo)

      Director

      • Tenure: 0.08yrs
      • Compensation: US$140.00k
    • José Ignacio Galán (69yo)

      Chairman of the Board

      • Compensation: US$200.00k
    • Santiago Matias Martínez Garrido (51yo)

      Director

      • Tenure: 4.9yrs
      • Compensation: US$140.00k
    • Juan Carlos Rebollo Liceaga (57yo)

      Director

      • Tenure: 4.9yrs
      • Compensation: US$140.00k
    • John Baldacci (64yo)

      Vice Chairman of the Board

      • Compensation: US$200.00k
    • Elizabeth Timm (66yo)

      Independent Director

      • Tenure: 3.5yrs
      • Compensation: US$170.00k

    Company Information

    Avangrid, Inc.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Avangrid, Inc.
    • Ticker: AGR
    • Exchange: NYSE
    • Founded: 1852
    • Industry: Electric Utilities
    • Sector: Utilities
    • Market Cap: US$15.815b
    • Shares outstanding: 309.01m
    • Website: https://www.avangrid.com

    Number of Employees


    Location

    • Avangrid, Inc.
    • 180 Marsh Hill Road
    • Orange
    • Connecticut
    • 6477
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    AGRNYSE (New York Stock Exchange)YesNew Common StockUSUSDDec 2015
    12ADB (Deutsche Boerse AG)YesNew Common StockDEEURDec 2015

    Biography

    Avangrid, Inc. operates as an energy services holding company in the United States. It operates through two segments, Networks and Renewables. The company engages in the generation, transmission, and distribution of electricity, as well as distribution, transportation, and sale of natural gas. It also develops, constructs, and operates renewable energy generation facilities primarily using onshore wind power, as well as solar, biomass, and thermal power. The company delivers natural gas and electricity to residential, commercial, and institutional customers through its regulated utilities in New York, Maine, Connecticut, and Massachusetts; and sells its output to investor-owned utilities, public utilities, and other credit-worthy entities. In addition, it generates and provides power and other services to federal and state agencies, as well as institutional retail and joint action agencies; and delivers thermal output to wholesale customers in the Western United States. As of February 26, 2019, Avangrid, Inc. owned 8 electric and natural gas utilities, serving 3.2 million customers in New York and New England, as well as owned and operated 7.2 gigawatts of electricity capacity, primarily through wind power in 22 states. The company was founded in 1852 and is headquartered in Orange, Connecticut. Avangrid, Inc. is a subsidiary of Iberdrola, S.A. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/19 00:33
    End of Day Share Price2020/01/17 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    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.