| Snowflake Score | |
|---|---|
| Valuation | 3/6 |
| Future Growth | 1/6 |
| Past Performance | 4/6 |
| Financial Health | 0/6 |
| Dividends | 4/6 |
ED Stock Overview
Consolidated Edison, Inc., through its subsidiaries, engages in the regulated electric, gas, and steam delivery businesses in the United States.
Consolidated Edison, Inc. Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$85.76 |
| 52 Week High | US$102.21 |
| 52 Week Low | US$71.52 |
| Beta | 0.25 |
| 1 Month Change | -12.92% |
| 3 Month Change | -11.81% |
| 1 Year Change | 19.78% |
| 3 Year Change | -8.90% |
| 5 Year Change | 5.15% |
| Change since IPO | 193.20% |
Recent News & Updates
With EPS Growth And More, Consolidated Edison (NYSE:ED) Makes An Interesting Case
It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story...
Consolidated Edison: Still Not Easy, And Now Overvalued
Summary In this article, I'm doing a recap after about 8 months since my last article on Consolidated Edison. This year has seen me shifting my investments heavily towards cash-flow heavy and recession-resistant businesses with good yields. Utilities qualify here. Consolidated Edison is not my largest position - but it's a stock I own. Here is an update on the business. Dear readers, I wrote about Consolidated Edison (NYSE:ED) about 19 months back in the early parts of 2021 - before Russia invaded Ukraine, before the market turned into the interest, CPI-driven mania that it's currently in, and when my portfolio was still fairly heavily weighted towards things like pharma. That is now somewhat different. Since then, I've shifted my new investments toward cash-flow safe, higher-yield businesses that in my view, will have no issues sustaining their payouts or earnings during even the harshest winter times. Utilities, being in the business of heating and lighting our homes and cities, are certainly a part of this. With that in mind, here is my update on Consolidated Edison. Consolidated Edison - An update In my original article, I explained ConEd, a company with a $33.7B market capitalization that operates multiple subsidiaries in the eastern area of the US, with perhaps the crown jewel being the Consolidated Edison Company of New York, which is a regulated utility providing electricity and gas service in New York City and Westchester. It's unique by operating the New York Steam service, probably the largest of its kind anywhere - and the company is on a tear to make sure that its operations are as future-proof as is humanly possible. With a 200-year history, this company has seen pretty much everything you could conceive to throw at it. Currently, it provides electricity, gas, and steam services giving energy to around 10 million people. Alternatively, in different terms, essentially more than the population of all of Sweden. More interestingly perhaps, given today's climate, is the fact that ConEd is one of the cleanest and greenest energy providers in the US, with 71% of assets based on various forms of renewable energy. ConEd does not own coal or nuclear assets. It's the 2nd largest owner of solar electricity in the United States and 7th in the entire world. The company currently constructs or has in operation, renewable electric production in 20 states, and its steam network eliminates about 1M tons of Co2 per year. Also, the company is going 100% clean by 2040 as a goal and has taken it upon itself to transform energy efficiency, as well as going with a full electric fleet going forward. The state of New York, while a politically divisive area, has goals to go 100% carbon-free by 2040 and 70% renewable by 2030, at the latest. The energy development goals reflect these goals, and the installations for customers also reflect this increased focus on different types of energy. That's the base case for ConEd - both theoretically and concrete future-proof as well as with a decent current set of assets that should safeguard the company going forward. ConEdison IR (ConEdison IR) The case of investing in this fundamentally safe BBB+ rated company is usually based on one of a few, or several arguments. It's future-proof grid, its work with the gas system, it's resilience thanks to New York Steam, its ESG focus and plans for reducing Co2 and/or fundamentals. ConEd has excellent shareholder history, with 47 consecutive years of dividend increases, which beats any utility company on the S&P 500. The company's EPS payout target is around 60-70%, and even on an NTM basis, the company meets these targets. EPS has been clocking away on a reliable basis for 10 years, and things show very little signs of slowing down. it's growing by that single-digit EPS on an annual basis, estimated 2.5% for 2021E. I'm not the only person who considered this a great investment. Take a look at what happened since I wrote about the company last. ConED Article (Seeking Alpha) The fact is, I'm a bit late with this article. But it's a testament to value investing. While many of the companies I currently invest in are nowhere near to normalizing or realizing their potential, I believe ED to be a good example of what happens when things turn the right way - which things have, for ED. When I wrote my article, I remember there being plenty of fundamental bears on the company - now we're mostly talking about the valuation of ED, which by the way I agree with, is high. More on that later. Quarterly results were good. The company continues to invest heavily - $15.7B until 2024E through a mix of safety investments as well as green energy pushes. The company is essentially retrofitting huge swathes of its infrastructure to work for the next half-century or so - and we should want to be a part of this development. Rate cases for the company are mostly positive, allowing for an RoE of between 8.8-10, which is pretty decent. EPS is up - and pretty significantly at that. ConED IR (ConED IR) The pandemic impact, even the disconnect stops due to nonpayment, have only marginally impacted the company's results, and I don't see any further headwind with regards to this in the near-term. I believe it would be fair to characterize pandemic impacts as "over" for this particular company. While there are risks, I believe these aren't as heavy as we could have considered them even half a year ago. They remain things to keep an eye on - but nothing that would threaten ConED as a business or as a whole. First of all, New York City which can easily be named ConEd's main market has experienced year-over-year population losses for three years running at this point. COVID-19 is only the latest in people essentially fleeing this geography in favor of cheaper, more flexible areas for living. For decades, New York has been able to market itself simply as New York and attract people from across the world to move there. It seems that there's a break here now. (Source: Consolidated Edison Article) The ebb and flow of being a regulated utility means an essential guarantee of being provided with revenues required to cover costs, as well as a certain amount of profit. This is essentially the same all across the world, albeit at specific rates. This is the reason I like utilities so much - especially in this environment. As long as the asset base remains safe, and as long as the demographics remain safe, there are very few things that can fundamentally derail a national or even region utility player. Let's look at the other part of the equation, where it currently, unfortunately, gets hairy. Consolidated Edison Valuation In my last article, I made a case for why it was a once-in-a-rare-time opportunity to essentially buy ED at a multiple of no higher than 16x. Today, that picture is very different. ConEd is currently trading at close to 23x P/E. I like utilities, but a New-Yorker utility with an asset like the steam network that will need considerable retrofitting and CapEx as well as the demographics does not warrant an inch over 20x P/E. ED valuation (F.A.S.T graphs) I've been relatively quiet on ConEd, but when the company started to really touch that 22.8x+ P/E again, I knew I needed to act. It's not just enough to consider, to my mind, the company a "HOLD" here. I'm actively considering the rotation of at least part of my stake in favor of cheaper-valued, higher-yielding alternatives. ED is a great company - but every great company has a point of overvaluation. The latest year has been a reminder to those not schooled in value investing that there comes an inflection point in every company. No matter how safe you believe it to be, or that you might think that "oh, this could never fall". Yes, it can - everything can. For that reason, I remind you of my original thesis target for ED. $71/share at most. The company has broken through every logical barrier in context to that here, and I give the company no more than a 20x P/E based on a normalized EPS, coming to around $88/share at most. And if the company trades at $88/share, the RoR will based on its growth rate, not be that great.
There Are Reasons To Feel Uneasy About Consolidated Edison's (NYSE:ED) Returns On Capital
If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an...
Consolidated Edison (NYSE:ED) Takes On Some Risk With Its Use Of Debt
Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of...
Shareholder Returns
| ED | US Integrated Utilities | US Market | |
|---|---|---|---|
| 7D | -10.2% | -9.4% | -2.5% |
| 1Y | 19.8% | 5.2% | -23.2% |
Return vs Industry: ED exceeded the US Integrated Utilities industry which returned 5.2% over the past year.
Return vs Market: ED exceeded the US Market which returned -23.2% over the past year.
Price Volatility
| ED volatility | |
|---|---|
| ED Average Weekly Movement | 2.9% |
| Integrated Utilities Industry Average Movement | 3.2% |
| Market Average Movement | 6.8% |
| 10% most volatile stocks in US Market | 15.5% |
| 10% least volatile stocks in US Market | 2.8% |
Stable Share Price: ED is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.
Volatility Over Time: ED's weekly volatility (3%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1823 | 13,871 | Tim Cawley | https://www.conedison.com |
Consolidated Edison, Inc., through its subsidiaries, engages in the regulated electric, gas, and steam delivery businesses in the United States. It offers electric services to approximately 3.5 million customers in New York City and Westchester County; gas to approximately 1.1 million customers in Manhattan, the Bronx, parts of Queens, and Westchester County; and steam to approximately 1,555 customers in parts of Manhattan. The company also supplies electricity to approximately 0.3 million customers in southeastern New York and northern New Jersey; and gas to approximately 0.1 million customers in southeastern New York.
Consolidated Edison, Inc. Fundamentals Summary
| ED fundamental statistics | |
|---|---|
| Market Cap | US$30.41b |
| Earnings (TTM) | US$1.62b |
| Revenue (TTM) | US$14.50b |
18.8x
P/E Ratio2.1x
P/S RatioIs ED overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| ED income statement (TTM) | |
|---|---|
| Revenue | US$14.50b |
| Cost of Revenue | US$6.77b |
| Gross Profit | US$7.74b |
| Other Expenses | US$6.12b |
| Earnings | US$1.62b |
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
n/a
| Earnings per share (EPS) | 4.57 |
| Gross Margin | 53.35% |
| Net Profit Margin | 11.16% |
| Debt/Equity Ratio | 122.8% |
How did ED perform over the long term?
See historical performance and comparison