NYSE:EE

Stock Analysis Report

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Executive Summary

El Paso Electric Company, a public utility company, engages in the generation, transmission, and distribution of electricity in west Texas and southern New Mexico.


Snowflake Analysis

Unattractive dividend payer with concerning outlook.


Similar Companies

Share Price & News

How has El Paso Electric's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

-0.1%

EE

5.8%

US Electric Utilities

2.8%

US Market


1 Year Return

3.4%

EE

2.5%

US Electric Utilities

9.3%

US Market

Return vs Industry: EE matched the US Electric Utilities industry which returned 2.5% over the past year.

Return vs Market: EE underperformed the US Market which returned 9.3% over the past year.


Shareholder returns

EEIndustryMarket
7 Day-0.1%5.8%2.8%
30 Day-0.2%7.2%8.9%
90 Day-0.3%-10.3%-0.5%
1 Year5.8%3.4%5.7%2.5%11.8%9.3%
3 Year34.9%25.4%22.8%11.1%31.4%22.7%
5 Year127.5%99.4%70.0%42.7%58.7%40.9%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is El Paso Electric undervalued compared to its fair value and its price relative to the market?

33.94x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: EE ($67.95) is trading above our estimate of fair value ($33.28)

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


Price To Earnings Ratio

PE vs Industry: EE is poor value based on its PE Ratio (33.9x) compared to the Electric Utilities industry average (19.8x).

PE vs Market: EE is poor value based on its PE Ratio (33.9x) compared to the US market (15.7x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate EE's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: EE is overvalued based on its PB Ratio (2.4x) compared to the US Electric Utilities industry average (2x).


Next Steps

Future Growth

How is El Paso Electric forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

12.0%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if EE's forecast earnings growth is above the savings rate (2.2%).

Earnings vs Market: Insufficient data to determine if EE's earnings are forecast to grow faster than the US market

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

Revenue vs Market: EE's revenue (12% per year) is forecast to grow faster than the US market (8.8% per year).

High Growth Revenue: EE's revenue (12% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if EE's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has El Paso Electric performed over the past 5 years?

3.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: EE has a large one-off loss of $39.0M impacting its March 31 2020 financial results.

Growing Profit Margin: EE's current net profit margins (9.6%) are lower than last year (10.8%).


Past Earnings Growth Analysis

Earnings Trend: EE's earnings have grown by 3.6% per year over the past 5 years.

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

Earnings vs Industry: EE had negative earnings growth (-16.1%) over the past year, making it difficult to compare to the Electric Utilities industry average (1.8%).


Return on Equity

High ROE: EE's Return on Equity (7%) is considered low.


Next Steps

Financial Health

How is El Paso Electric's financial position?


Financial Position Analysis

Short Term Liabilities: EE's short term assets ($208.9M) do not cover its short term liabilities ($429.7M).

Long Term Liabilities: EE's short term assets ($208.9M) do not cover its long term liabilities ($2.3B).


Debt to Equity History and Analysis

Debt Level: EE's debt to equity ratio (139.1%) is considered high.

Reducing Debt: EE's debt to equity ratio has increased from 123.9% to 139.1% over the past 5 years.

Debt Coverage: EE's debt is not well covered by operating cash flow (15.2%).

Interest Coverage: EE's interest payments on its debt are well covered by EBIT (6x coverage).


Balance Sheet


Next Steps

Dividend

What is El Paso Electric's current dividend yield, its reliability and sustainability?

2.27%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: EE's dividend (2.27%) is higher than the bottom 25% of dividend payers in the US market (1.69%).

High Dividend: EE's dividend (2.27%) is low compared to the top 25% of dividend payers in the US market (4.55%).


Stability and Growth of Payments

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

Growing Dividend: EE's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (76.9%), EE's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

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

5.8yrs

Average management tenure


CEO

Adrian Rodriguez (41yo)

0.83

Tenure

US$1,247,581

Compensation

Mr. Adrian J. Rodriguez has been Interim Chief Executive Officer of El Paso Electric Company since August 1, 2019. Mr. Rodriguez has been General Counsel and Assistant Secretary at El Paso Electric Company ...


CEO Compensation Analysis

Compensation vs Market: Adrian's total compensation ($USD1.25M) is below average for companies of similar size in the US market ($USD5.87M).

Compensation vs Earnings: Adrian's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Adrian Rodriguez
Interim CEO0.83yrUS$1.25m0.055% $1.5m
Nathan Hirschi
Senior VP & CFO6.67yrsUS$1.52m0.086% $2.4m
Elaina Ball
Senior VP & Interim COO0.83yrUS$964.13k0.014% $398.3k
Rocky Miracle
Senior VP of Corporate Development & Chief Compliance Officer5.75yrsUS$1.07m0.095% $2.6m
Steven Buraczyk
Senior Vice President of Operationsno dataUS$1.71m0.089% $2.5m
Lisa Budtke
Director-Treasury Services and Investor Relationsno datano datano data
Victor Rueda
Vice President of Human Resources1.33yrsno datano data
Henry Soza
VP of Compliance & Chief Risk Officer13.75yrsno datano data
Jessica Goldman
Corporate Secretaryno datano datano data
Russell Gibson
VP & Controller5.75yrsno data0.023% $645.4k

5.8yrs

Average Tenure

54yo

Average Age

Experienced Management: EE's management team is seasoned and experienced (5.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Adrian Rodriguez
Interim CEO0.83yrUS$1.25m0.055% $1.5m
James Cicconi
Independent Director23.42yrsUS$308.03k0.18% $5.0m
Paul Barbas
Independent Director3.08yrsUS$291.56k0.026% $713.5k
Charles Yamarone
Independent Chairman of the Board5.33yrsUS$407.53k0.042% $1.2m
Eric Siegel
Independent Director24.42yrsUS$316.53k0.078% $2.2m
Stephen Wertheimer
Independent Director24.42yrsUS$306.06k0.068% $1.9m
Edward Escudero
Independent Vice Chairman of the Board5.33yrsUS$363.53k0.042% $1.2m
Raymond Palacios
Independent Director3.08yrsUS$295.03k0.029% $817.4k

5.3yrs

Average Tenure

61yo

Average Age

Experienced Board: EE's board of directors are considered experienced (5.3 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

Ownership Breakdown

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


Top Shareholders

Company Information

El Paso Electric Company's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: El Paso Electric Company
  • Ticker: EE
  • Exchange: NYSE
  • Founded: 1901
  • Industry: Electric Utilities
  • Sector: Utilities
  • Market Cap: US$2.779b
  • Shares outstanding: 40.90m
  • Website: https://www.epelectric.com

Number of Employees


Location

  • El Paso Electric Company
  • Stanton Tower
  • 100 North Stanton
  • El Paso
  • Texas
  • 79901
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
EENYSE (New York Stock Exchange)YesCommon StockUSUSDFeb 1996
EPGDB (Deutsche Boerse AG)YesCommon StockDEEURFeb 1996

Biography

El Paso Electric Company, a public utility company, engages in the generation, transmission, and distribution of electricity in west Texas and southern New Mexico. It generates electricity through nuclear fuel, natural gas, purchased power, and solar photovoltaic panels. The company owns or has ownership interests in electrical generating facilities with a net generating capacity of approximately 2,085 megawatts; four 345 kilovolt (kv) transmission lines in New Mexico and Arizona; and three 500 kV lines in Arizona. It serves approximately 432,800 residential, commercial, industrial, public authority, and wholesale customers; and distributes electricity to retail customers. El Paso Electric Company was founded in 1901 and is based in El Paso, Texas. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/06/02 03:14
End of Day Share Price2020/06/01 00:00
Earnings2020/03/31
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.