OTCPK:EQUE.Y

Stock Analysis Report

Executive Summary

Equatorial Energia S.A., through its subsidiaries, generates, transmits, and distributes electricity in Brazil.

Rewards

PE ratio (17.2x) is below the US market (18.4x)

Earnings are forecast to grow 13.56% per year

Earnings grew by 56.9% over the past year

Risk Analysis

Interest payments are not well covered by earnings

High level of non-cash earnings



Snowflake Analysis

Acceptable track record and slightly overvalued.

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

2.4%

EQUE.Y

1.7%

US Electric Utilities

0.9%

US Market


1 Year Return

31.4%

EQUE.Y

28.4%

US Electric Utilities

20.0%

US Market

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

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


Shareholder returns

EQUE.YIndustryMarket
7 Day2.4%1.7%0.9%
30 Day-3.7%6.0%1.4%
90 Day13.9%14.5%8.8%
1 Year32.8%31.4%32.6%28.4%22.5%20.0%
3 Year61.7%56.3%57.3%42.2%49.9%40.3%
5 Year230.1%207.8%85.2%54.1%73.2%54.1%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

17.16x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: EQUE.Y ($5.94) is trading above our estimate of fair value ($3.38)

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


Price To Earnings Ratio

PE vs Industry: EQUE.Y is good value based on its PE Ratio (17.2x) compared to the Electric Utilities industry average (26.6x).

PE vs Market: EQUE.Y is good value based on its PE Ratio (17.2x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: EQUE.Y is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

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


Next Steps

Future Growth

How is Equatorial Energia forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

13.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: EQUE.Y's forecast earnings growth (13.6% per year) is above the savings rate (1.7%).

Earnings vs Market: EQUE.Y's earnings (13.6% per year) are forecast to grow slower than the US market (14.6% per year).

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

Revenue vs Market: EQUE.Y's revenue (2.4% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: EQUE.Y's revenue (2.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: EQUE.Y's Return on Equity is forecast to be high in 3 years time (22.3%)


Next Steps

Past Performance

How has Equatorial Energia performed over the past 5 years?

13.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: EQUE.Y has a high level of non-cash earnings.

Growing Profit Margin: EQUE.Y's current net profit margins (9.5%) are lower than last year (9.6%).


Past Earnings Growth Analysis

Earnings Trend: EQUE.Y's earnings have grown by 13% per year over the past 5 years.

Accelerating Growth: EQUE.Y's earnings growth over the past year (56.9%) exceeds its 5-year average (13% per year).

Earnings vs Industry: EQUE.Y earnings growth over the past year (56.9%) exceeded the Electric Utilities industry 7.3%.


Return on Equity

High ROE: Whilst EQUE.Y's Return on Equity (23.75%) is high, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Equatorial Energia's financial position?


Financial Position Analysis

Short Term Liabilities: EQUE.Y's short term assets (R$9.7B) exceed its short term liabilities (R$5.8B).

Long Term Liabilities: EQUE.Y's short term assets (R$9.7B) do not cover its long term liabilities (R$20.4B).


Debt to Equity History and Analysis

Debt Level: EQUE.Y's debt to equity ratio (215.5%) is considered high.

Reducing Debt: EQUE.Y's debt to equity ratio has increased from 116.5% to 215.5% over the past 5 years.

Debt Coverage: EQUE.Y's debt is not well covered by operating cash flow (1.5%).

Interest Coverage: EQUE.Y's interest payments on its debt are not well covered by EBIT (2.8x coverage).


Balance Sheet

Inventory Level: EQUE.Y has a low level of unsold assets or inventory.

Debt Coverage by Assets: EQUE.Y's debt is not covered by short term assets (assets are 0.6x debt).


Next Steps

Dividend

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

0.73%

Current Dividend Yield


Dividend Yield vs Market

company0.7%marketbottom25%1.4%markettop25%3.7%industryaverage2.9%forecastin3Years1.6%

Current dividend yield vs market & industry

Notable Dividend: EQUE.Y's dividend (0.73%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: EQUE.Y's dividend (0.73%) is low compared to the top 25% of dividend payers in the US market (3.69%).


Stability and Growth of Payments

Stable Dividend: EQUE.Y is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: EQUE.Y is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: EQUE.Y is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of EQUE.Y's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

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

4.3yrs

Average management tenure


CEO

Augusto da Paz Júnior 0

4.3yrs

Tenure

0

Mr. Augusto Miranda da Paz Júnior, serves as Director at Equatorial Maranhão Distribuidora de Energia S.A. (formally known as CEMAR - Cia Energetica do Maranhao) and served as Chief Executive Officer since ...


Leadership Team

NamePositionTenureCompensationOwnership
Augusto da Paz Júnior
CEO & Member of the Executive Board4.3yrsno datano data
Leonardo da Silva Lucas Tavares de Lima
Member of Executive Board0yrsno datano data
Tinn Amado
Director of Regulatory Affairs & Member of Executive Board0yrsno datano data
Carla Medrado
Member of Executive Board4.3yrsno datano data
Servio dos Santos
Member of Executive Board0yrsno datano data
Humberto Nogueira
Member of Executive Board2.5yrsno datano data
Geovane de Lira
Accounting & Taxes Manager0yrsno datano data

4.3yrs

Average Tenure

Experienced Management: EQUE.Y's management team is considered experienced (4.3 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.


Ownership Breakdown

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


Top Shareholders

Company Information

Equatorial Energia S.A.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Equatorial Energia S.A.
  • Ticker: EQUE.Y
  • Exchange: OTCPK
  • Founded: 1958
  • Industry: Electric Utilities
  • Sector: Utilities
  • Market Cap: R$26.548b
  • Listing Market Cap: R$6.146b
  • Shares outstanding: 1.01b
  • Website: https://www.equatorialenergia.com.br

Location

  • Equatorial Energia S.A.
  • Edifício Business Center Tower
  • Conj. A, Bloco C, sala 702
  • Brasília
  • Distrito Federal
  • 70322-915
  • Brazil

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
EQTL3BOVESPA (Bolsa de Valores de Sao Paulo)YesCommon SharesBRBRLApr 2008
EQUE.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDDec 2008

Biography

Equatorial Energia S.A., through its subsidiaries, generates, transmits, and distributes electricity in Brazil. It primarily distributes electric energy in the 217 municipalities of Maranhão State with a concession area of approximately 331,937 square kilometers serving approximately 6.9 million clients. The company also distributes electric in a concession area covering 1,247,955 square kilometers serving approximately 8.3 million consumers in 144 municipalities of Pará State. In addition, it is involved in the electricity trading business. The company was founded in 1958 and is based in Brasília, Brazil. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/18 00:26
End of Day Share Price2020/02/14 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.