NYSE:FE

Stock Analysis Report

Executive Summary

FirstEnergy Corp., through its subsidiaries, generates, transmits, and distributes electricity in the United States.

Rewards

Earnings are forecast to grow 10.56% per year

Earnings grew by 37.4% over the past year

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 2.99% is not well covered by earnings

Shareholders have been diluted in the past year



Snowflake Analysis

Solid track record unattractive dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

2.0%

FE

2.2%

US Electric Utilities

1.5%

US Market


1 Year Return

31.9%

FE

28.6%

US Electric Utilities

20.1%

US Market

Return vs Industry: FE exceeded the US Electric Utilities industry which returned 28.6% over the past year.

Return vs Market: FE exceeded the US Market which returned 20.1% over the past year.


Shareholder returns

FEIndustryMarket
7 Day2.0%2.2%1.5%
30 Day6.5%6.0%1.4%
90 Day11.7%14.5%8.7%
1 Year36.4%31.9%32.8%28.6%22.7%20.1%
3 Year89.8%68.4%57.8%42.6%50.1%40.5%
5 Year79.3%45.7%86.3%55.1%73.1%54.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

31.05x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: FE ($52.23) is trading above our estimate of fair value ($42.53)

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


Price To Earnings Ratio

PE vs Industry: FE is poor value based on its PE Ratio (31x) compared to the Electric Utilities industry average (26.6x).

PE vs Market: FE is poor value based on its PE Ratio (31x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: FE is poor value based on its PEG Ratio (2.9x)


Price to Book Ratio

PB vs Industry: FE is overvalued based on its PB Ratio (4x) compared to the US Electric Utilities industry average (2.4x).


Next Steps

Future Growth

How is FirstEnergy forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

10.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FE's forecast earnings growth (10.6% per year) is above the savings rate (1.7%).

Earnings vs Market: FE's earnings (10.6% per year) are forecast to grow slower than the US market (14.5% per year).

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

Revenue vs Market: FE's revenue (3.9% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: FE'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: FE's Return on Equity is forecast to be low in 3 years time (17.1%).


Next Steps

Past Performance

How has FirstEnergy performed over the past 5 years?

7.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FE has high quality earnings.

Growing Profit Margin: FE's current net profit margins (8.3%) are higher than last year (5.9%).


Past Earnings Growth Analysis

Earnings Trend: FE has become profitable over the past 5 years, growing earnings by 7.3% per year.

Accelerating Growth: FE's earnings growth over the past year (37.4%) exceeds its 5-year average (7.3% per year).

Earnings vs Industry: FE earnings growth over the past year (37.4%) exceeded the Electric Utilities industry 7.3%.


Return on Equity

High ROE: FE's Return on Equity (13%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is FirstEnergy's financial position?


Financial Position Analysis

Short Term Liabilities: FE's short term assets ($2.4B) do not cover its short term liabilities ($4.9B).

Long Term Liabilities: FE's short term assets ($2.4B) do not cover its long term liabilities ($30.5B).


Debt to Equity History and Analysis

Debt Level: FE's debt to equity ratio (300.2%) is considered high.

Reducing Debt: FE's debt to equity ratio has increased from 175% to 300.2% over the past 5 years.


Balance Sheet

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

Debt Coverage by Assets: FE's debt is not covered by short term assets (assets are 0.1x debt).


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: FE is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: FE is profitable, therefore cash runway is not a concern.


Next Steps

Dividend

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

2.99%

Current Dividend Yield


Dividend Yield vs Market

company3.0%marketbottom25%1.4%markettop25%3.7%industryaverage2.9%forecastin3Years3.1%

Current dividend yield vs market & industry

Notable Dividend: FE's dividend (2.99%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: FE's dividend (2.99%) is low compared to the top 25% of dividend payers in the US market (3.69%).


Stability and Growth of Payments

Stable Dividend: FE's dividend payments have been volatile in the past 10 years.

Growing Dividend: FE's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (91%), FE's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: FE's dividends in 3 years are forecast to be covered by earnings (61.1% payout ratio).


Next Steps

Management

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

5.1yrs

Average management tenure


CEO

Chuck Jones (63yo)

5.1yrs

Tenure

US$11,123,128

Compensation

Mr. Charles E. Jones, Jr., also known as Chuck, serves as Director of Mid-Atlantic Interstate Transmission, LLC and Trans-Allegheny Interstate Line Company. Mr. Jones has been Senior Vice President and Chi ...


CEO Compensation Analysis

Compensation vs Market: Chuck's total compensation ($USD11.12M) is about average for companies of similar size in the US market ($USD10.81M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Charles Jones
President5.1yrsUS$11.12m0.085% $24.0m
Steven Strah
Senior VP & CFO1.9yrsUS$3.50m0.013% $3.6m
Samuel Belcher
Senior VP & President of FirstEnergy Utilities0yrsUS$3.11m0.0076% $2.1m
Bennett Gaines
Senior VP of Corporate Services & Chief Information Officer - FirstEnergy Service Company0yrsUS$1.44m0.012% $3.3m
Jason Lisowski
VP, Controller & Chief Accounting Officer2.1yrsno data0.0011% $307.8k
Robert Reffner
Senior VP & General Counsel2.1yrsno data0.014% $3.8m
Gretchan Sekulich
Vice President of Communications & Marketing9yrsno datano data
Christine Walker
Senior VP & Chief Human Resources Officer - FirstEnergy Service Company14.8yrsno data0.0072% $2.0m
John Judge
Chief Risk Officer and Vice President of Corporate Risk7.5yrsno datano data
Kevin Burgess
Vice President of Risk & Internal Audit0yrsno datano data

5.1yrs

Average Tenure

54.5yo

Average Age

Experienced Management: FE's management team is seasoned and experienced (5.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Charles Jones
President5.1yrsUS$11.12m0.085% $24.0m
James O'Neil
Independent Director3.1yrsUS$245.48k0.00082% $231.6k
Steven Demetriou
Independent Director3.1yrsUS$229.90k0.00076% $214.6k
Michael Anderson
Independent Director13yrsUS$254.20k0.00018% $50.8k
Christopher Pappas
Independent Director8.4yrsUS$247.40k0.0036% $1.0m
Julia Johnson
Independent Director9yrsUS$229.90k0.0016% $454.7k
Thomas Mitchell
Independent Director4.1yrsUS$248.40k0.0014% $386.9k
Sandra Pianalto
Independent Director2yrsUS$197.94k0.00060% $169.4k
Donald Misheff
Non-executive Chairman1.8yrsUS$331.48k0.000020% $5.6k
Luis Reyes
Independent Director6.4yrsUS$232.88k0.000060% $16.9k

4.6yrs

Average Tenure

63yo

Average Age

Experienced Board: FE's board of directors are considered experienced (4.6 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 been diluted in the past year, with total shares outstanding growing by 8.7%.


Top Shareholders

Company Information

FirstEnergy Corp.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: FirstEnergy Corp.
  • Ticker: FE
  • Exchange: NYSE
  • Founded: 1996
  • Industry: Electric Utilities
  • Sector: Utilities
  • Market Cap: US$28.241b
  • Shares outstanding: 540.71m
  • Website: https://www.firstenergycorp.com

Number of Employees


Location

  • FirstEnergy Corp.
  • 76 South Main Street
  • Akron
  • Ohio
  • 44308
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FENYSE (New York Stock Exchange)YesCommon SharesUSUSDNov 1997
FE7DB (Deutsche Boerse AG)YesCommon SharesDEEURNov 1997
0IPBLSE (London Stock Exchange)YesCommon SharesGBUSDNov 1997
FE *BMV (Bolsa Mexicana de Valores)YesCommon SharesMXMXNNov 1997
F1EC34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COMBRBRLDec 2019

Biography

FirstEnergy Corp., through its subsidiaries, generates, transmits, and distributes electricity in the United States. The company operates through Regulated Distribution and Regulated Transmission segments. It owns and operates coal-fired, nuclear, hydroelectric, natural gas, wind, and solar power generating facilities. The company also provides energy-related products and services to retail and wholesale customers. It operates 24,486 circuit miles of overhead and underground transmission lines; and electric distribution systems, including 269,691 miles of overhead pole line and underground conduit carrying primary, secondary, and street lighting circuits, as well as owns substations with a total installed transformer capacity of approximately 156,115,196 kilovolt-amperes. The company serves approximately six million customers in Ohio, Pennsylvania, West Virginia, Maryland, New Jersey, and New York. FirstEnergy Corp. was founded in 1996 and is headquartered in Akron, Ohio. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/16 23:35
End of Day Share Price2020/02/14 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.