NYSE:NRG

Stock Analysis Report

Executive Summary

NRG Energy, Inc., together with its subsidiaries, operates as an energy company in the United States.

Rewards

Trading at 67.3% below its fair value

Earnings are forecast to grow 4.97% per year

Became profitable this year

Risk Analysis

Interest payments are not well covered by earnings

Unstable dividend track record

Large one-off items impacting financial results



Snowflake Analysis

Fair value second-rate dividend payer.


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Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

1.8%

NRG

1.9%

US Renewable Energy

0.06%

US Market


1 Year Return

-5.0%

NRG

21.1%

US Renewable Energy

19.4%

US Market

Return vs Industry: NRG underperformed the US Renewable Energy industry which returned 21.1% over the past year.

Return vs Market: NRG underperformed the US Market which returned 19.4% over the past year.


Shareholder returns

NRGIndustryMarket
7 Day1.8%1.9%0.06%
30 Day3.7%6.6%1.1%
90 Day1.9%8.6%8.9%
1 Year-4.0%-5.0%25.0%21.1%21.9%19.4%
3 Year142.0%137.4%68.6%51.2%48.9%39.3%
5 Year68.2%57.4%45.4%11.7%71.9%53.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is NRG Energy 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: NRG ($39.95) is trading below our estimate of fair value ($122.08)

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


Price To Earnings Ratio

PE vs Industry: NRG is good value based on its PE Ratio (19.2x) compared to the Renewable Energy industry average (27.4x).

PE vs Market: NRG is poor value based on its PE Ratio (19.2x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: NRG is poor value based on its PEG Ratio (3.9x)


Price to Book Ratio

PB vs Industry: NRG has negative assets, so we can't compare its PB Ratio to the US Renewable Energy industry average.


Next Steps

Future Growth

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

5.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NRG's forecast earnings growth (5% per year) is above the savings rate (1.7%).

Earnings vs Market: NRG's earnings (5% per year) are forecast to grow slower than the US market (14.2% per year).

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

Revenue vs Market: NRG's revenue (3.3% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: NRG's revenue (3.3% 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 NRG's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has NRG Energy performed over the past 5 years?

28.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NRG has a large one-off loss of $220.0M impacting its September 30 2019 financial results.

Growing Profit Margin: NRG became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: NRG has become profitable over the past 5 years, growing earnings by 28.3% per year.

Accelerating Growth: NRG has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: NRG has become profitable in the last year, making it difficult to compare its past year earnings growth to the Renewable Energy industry (-31.7%).


Return on Equity

High ROE: NRG's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is NRG Energy's financial position?


Financial Position Analysis

Short Term Liabilities: NRG has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: NRG has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: NRG has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: NRG's has negative shareholder equity, so we do not need to check if its debt has reduced over time.


Balance Sheet

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

Debt Coverage by Assets: NRG has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.


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

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


Next Steps

Dividend

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

3.00%

Current Dividend Yield


Dividend Yield vs Market

company3.0%marketbottom25%1.4%markettop25%3.7%industryaverage2.9%forecastin3Years3.2%

Current dividend yield vs market & industry

Notable Dividend: NRG's dividend (3%) is higher than the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: NRG's dividend (3%) is low compared to the top 25% of dividend payers in the US market (3.7%).


Stability and Growth of Payments

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

Growing Dividend: NRG's dividend payments have increased, but the company has only paid a dividend for 8 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (5.8%), NRG's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NRG's dividends in 3 years are forecast to be well covered by earnings (30.2% payout ratio).


Next Steps

Management

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

4.0yrs

Average management tenure


CEO

Mauricio Gutierrez (48yo)

4.2yrs

Tenure

US$8,914,948

Compensation

Mr. Mauricio Gutierrez serves as Interim Chief Executive Officer and Interim President at NRG Yield LLC. Mr. Gutierrez served as the Chief Executive Officer and President at GenOn Energy, Inc. He has been  ...


CEO Compensation Analysis

Compensation vs Market: Mauricio's total compensation ($USD8.91M) is about average for companies of similar size in the US market ($USD10.78M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Mauricio Gutierrez
President4.2yrsUS$8.91m0.36% $36.0m
Kirkland Andrews
Executive VP & CFO8.4yrsUS$3.00m0.10% $10.5m
Christopher Moser
Executive Vice President of Operations2.1yrsUS$2.20m0.046% $4.6m
Elizabeth Killinger
Executive VP & President of Retail and Reliant4yrsUS$2.17m0.051% $5.2m
Robert Gaudette
Senior Vice President of Business Solutions6.2yrsUS$1.48m0.020% $2.0m
Barry Smitherman
Consultant1.9yrsUS$144.64kno data
David Callen
Senior VP & Chief Accounting Officer4.9yrsno data0.018% $1.8m
Jennifer Wallace
Senior Vice President of Administration3.9yrsno datano data
Kevin Cole
Sr. Vice President4.1yrsno datano data
Brian Curci
Senior VP & General Counsel1.9yrsno data0.011% $1.1m

4.0yrs

Average Tenure

48yo

Average Age

Experienced Management: NRG's management team is considered experienced (4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Mauricio Gutierrez
President4.2yrsUS$8.91m0.36% $36.0m
Thomas Weidemeyer
Independent Director16.2yrsUS$287.01k0.0082% $827.5k
Terry Dallas
Independent Director7.2yrsUS$292.32k0.0057% $572.5k
William Hobby
Independent Director13.9yrsUS$287.01k0.028% $2.9m
Lawrence Coben
Chairman of the Board3yrsUS$472.49k0.00097% $97.8k
E. Abraham
Independent Director7.2yrsUS$295.32k0.0027% $268.1k
Alexandra Pruner
Independent Director0.3yrsno data0.000030% $3.0k
Anne Schaumburg
Independent Director14.8yrsUS$270.89k0.0020% $199.6k
Matthew Carter
Independent Director1.9yrsUS$416.56k0.0056% $566.4k
Heather Cox
Independent Director1.9yrsUS$416.56k0.0056% $563.4k

5.6yrs

Average Tenure

59yo

Average Age

Experienced Board: NRG's board of directors are considered experienced (5.6 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: NRG insiders have only sold shares 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

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


Key Information

  • Name: NRG Energy, Inc.
  • Ticker: NRG
  • Exchange: NYSE
  • Founded: 1989
  • Industry: Independent Power Producers and Energy Traders
  • Sector: Utilities
  • Market Cap: US$10.079b
  • Shares outstanding: 251.59m
  • Website: https://www.nrg.com

Number of Employees


Location

  • NRG Energy, Inc.
  • 804 Carnegie Center
  • Princeton
  • New Jersey
  • 8540
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NRGNYSE (New York Stock Exchange)YesCommon StockUSUSDDec 2003
NRADB (Deutsche Boerse AG)YesCommon StockDEEURDec 2003
NRAXTRA (XETRA Trading Platform)YesCommon StockDEEURDec 2003
0K4CLSE (London Stock Exchange)YesCommon StockGBUSDDec 2003
N1RG34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COMBRBRLDec 2019

Biography

NRG Energy, Inc., together with its subsidiaries, operates as an energy company in the United States. The company is involved in the producing, selling, and delivering electricity and related products and services to 3.1 million residential, industrial, and commercial consumers. It generates electricity using natural gas, coal, oil, solar, nuclear, wind, fossil fuel, and nuclear sources. The company also provides system power, distributed generation, solar and wind products, backup generation, storage and distributed solar, demand response, energy efficiency, advisory, and on-site energy solutions; and carbon management and specialty services. In addition, it trades in electric power, natural gas, and related commodity and financial products, including forwards, futures, options, and swaps. Further, the company supplies fuels; provides transportation services; and directly sells energy, services, and products and services to retail customers under the NRG, Reliant, and other names. It develops, constructs, owns, and operates natural gas, coal, oil, solar, nuclear, wind, fossil fuel, and nuclear plants with generation capacity of 23,000 megawatts. The company was founded in 1989 and is headquartered in Princeton, New Jersey. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 00:22
End of Day Share Price2020/02/18 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.