|Bid||0.00 x 900|
|Ask||0.00 x 800|
|Day's Range||68.50 - 69.20|
|52 Week Range||57.63 - 83.38|
|Beta (3Y Monthly)||-0.15|
|PE Ratio (TTM)||54.11|
|Earnings Date||Oct 29, 2018|
|Forward Dividend & Yield||2.42 (3.53%)|
|1y Target Est||71.94|
This analysis is intended to introduce important early concepts to people who are starting to invest and want to learn about the link between company’s fundamentals and stock market performance. Read More...
The Intergovernmental Panel on Climate Change released a report this week that calls for faster electric vehicle and hybrid adoption as part of the actions needed to limit the effects of climate change. The report will be a key topic at the Katowice Climate Change Conference in December, where governments from around the world will review the Paris agreement. Over the next decade, battery electric vehicles will reach cost parity with internal combustion engines.
PG&E (PCG) stock has an upside potential of 8.3% for the next 12 months based on analysts’ median target price of $52.57 and its current market price of $48.55.
Recently, PG&E (PCG) witnessed one of the highest implied volatility levels among its peers. On October 9, PG&E’s implied volatility was 36%—higher than its 15-day average. In comparison, broader utilities’ (XLU) implied volatility was ~13%. The implied volatility represents investors’ anxiety. Higher volatility is usually related to a fall in the stock prices and vice versa.
PG&E (PCG) is trading at a forward PE ratio of 12x—based on the estimated EPS in 2019. PG&E’s ratio is lower than its peers’ average forward PE ratio of 14x. Also, PG&E’s five-year historical PE ratio is ~20x.
On October 9, fire investigator Cal Fire said that PG&E’s (PCG) sagging power lines and heavy winds started the Cascade fire in October 2017. However, Cal Fire mentioned that it didn’t find any violations of the Public Resources Code. The Cascade fire in Yuba County destroyed 264 structures and claimed four lives. Cal Fire already said that PG&E was responsible for 16 other fires in 2017. The cause of the Tubbs fire, the most devastating fire, is still under investigation.
Southern California Edison today issued the following statement in response to a press release issued by the Riverside County Fire Department in cooperation with the California Department of Forestry and Fire Protection (CAL FIRE) on the 2017 Liberty Fire, which impacted 300 acres and destroyed one structure and one outbuilding. SCE fully and actively cooperated with fire officials throughout their investigation and looks forward to reviewing the CAL FIRE report when it is made available. While it may not always be possible to reach conclusions about origin and cause, in this case we do know that the Liberty Fire began during a period of strong Santa Ana wind conditions with red flag warnings in effect in an area severely impacted by years of historic drought.
Blazes have already ripped through enough acres to blacken the entire state of Delaware, and what’s typically California’s worst month for fires is just beginning. “We are going into a difficult period of the year,’’ said Scott McLean, a deputy chief at the California Department of Forestry & Fire Protection, or Cal Fire.
High school seniors who dream of making a difference in the world through STEM studies are invited to apply to Edison International’s $1.2 million Edison Scholars Program. Edison International, the parent company of Southern California Edison, is awarding $40,000 scholarships, paid over four years, to 30 high school students planning to major in science, technology, engineering or math (STEM) fields at four-year accredited U.S. colleges and universities. Applicants must live in SCE’s service territory and plan to be a full-time undergraduate college freshman majoring in a STEM field in fall 2019.
Sempra Energy (SRE) has a median target price of $124.60 compared to its current market price of $115.21, which indicates an upside potential of ~8% for the next 12 months. Morgan Stanley cut Sempra Energy’s target price from $121.0 to $120.0 last week.
Let’s have a look at California utility stocks’ volatility in this part. Sempra Energy (SRE) stock witnessed an implied volatility of 15%, which was close to its 15-day average. In comparison, the implied volatility of PG&E (PCG) stock was 34%, and Edison International’s (EIX) was 19%. Implied volatility indicates investors’ nervousness. Higher volatility is typically associated with a fall in stock prices and vice versa.
Let’s take a look at analysts’ recommendations for the utility stocks under review in this series. Note that none of these stocks have “sell” recommendations from any of the analysts tracking them.
Currently, Sempra Energy (SRE) stock is trading at $114.3, nearly 1% below its 50-day moving average and 3% above its 200-day moving average levels. Its 50-day moving average around $116 could act as a resistance, while its 200-day moving average level close to $110.9 could act as a support in the short term. It’s trading in the oversold zone with an RSI (relative strength index) at 28.
In this series, we’re comparing utility stocks NextEra Energy (NEE), Edison International (EIX), and American Water Works (AWK), the three utilities that have reported the highest dividend growth over the last five years. Among these utilities, NextEra Energy stock has outperformed its peers this year. NextEra Energy has returned 18% (including dividends) in the last year, while in the last five years, it’s returned 18% compounded annually.
Currently, Edison International (EIX) offers the highest yield among California utilities at 3.6%. In comparison, Sempra Energy (SRE) is trading at a yield of 3.1%. Broader utilities yield around 3.3%. PG&E (PCG) suspended its quarterly dividends in Q4 2017 amid uncertainties related to its wildfire-related liabilities. PCG’s five-year average dividend yield is around 3.7%.
Renewables giant NextEra Energy (NEE) stock is currently trading at a dividend yield of 2.6%, lower than the broader utilities. In comparison, Edison International (EIX) offers a yield of 3.5%, the highest among the three utilities.
Utilities at large managed to raise their per-share dividends by an average of ~4% in the last five years compounded annually. NextEra Energy (NEE), the biggest utility by market cap and the largest component of the Utilities Select Sector SPDR ETF (XLU), has increased its dividend by more than 10% in the last five years. In comparison, leading water utility American Water Works (AWK) has raised its dividend by 11%, while California-based Edison International (EIX) has reported the highest dividend growth of 12.4% compounded annually in the last five years.
In this article, we’ll take a look at these California utilities’ free cash flows. Notably, none of the three top California utilities have generated positive free cash flows in the last few years. Free cash flow is generally calculated as the difference between operating cash flow and capital expenditure. It’s a vital metric to use in measuring utilities’ performances, as free cash flows are used for dividend payments and expansions.
In this article, we’ll take a look at the valuations of California utility stocks. Sempra Energy (SRE), the largest of them all by market cap, is currently trading at a forward PE (price-to-earnings) ratio of above 19x. Sempra Energy is one of the fastest-growing utilities in the industry. Its five-year average historical valuation is around 20x.
At the end of Q2 2018, PG&E (PCG) had net debt of $18.7 billion, while Sempra Energy (SRE) had net debt of $25.8 billion. Sempra Energy’s debt has significantly increased in the last couple of quarters due in part to its Oncor acquisition. Edison International’s (EIX) debt was $14.5 billion as of June 30. Utilities generally have a large amount of debt on their books because of their heavy capex needs.
Sempra Energy (SRE) is the fastest-growing utility in the state. Its presence in outstanding markets like California, the largest economy in the country, and Texas, the second largest, is a big positive. The company is aiming for annualized adjusted EPS growth of 13%, which is much higher than the broader utility (XLU) average. Sempra Energy intends to invest more than $8 billion on capital projects, which will likely expand its US subsidiary rate base by ~7% through 2022.
Sempra Energy (SRE) has outperformed peers in the state in terms of total returns in the last few years. In the last one year, it returned 2%, while broader utilities also (XLU) returned 2%. PG&E (PCG) returned -31%, while Edison International (EIX) returned -12% in the last year. PCG stock’s steep fall and dividend suspension drove its underperformance.
California utility PG&E (PCG) has been in a solid uptrend with a rise of over 15% in the last three months. California governor Jerry Brown signed legislation on September 21 to strengthen the state’s ability to prevent and recover from wildfires. PG&E’s downed power lines were responsible for starting some of the deadly wildfires last year.