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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Eversource Energy (XNYS:ES) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
ES
Name:
Eversource Energy (XNYS:ES)
Sector:
- 392654.00K
Industry:
Utilities�Regulated Electric
CEO:
Mr. James Judge
Total Employees:
9,227
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -7.00% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF EVERSOURCE ENERGY(ES) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND UTILITIES�REGULATED ELECTRIC INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
89.55
One Month Price Target:
$89.78
Six Month Price Target :
$90.92
Likely Price in One Year's Time:
Ticker:
$92.29
Likely Trading Range Today Under (Normal Volatility)
$89.28
Price Upper limit ($) :
$89.89
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$85.89
This week:
$81.36
This month :
$73.17
Other Primary facts
Market Cap:
30.89B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
346.44M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
14.8%
-12.82%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$106.54
$98.75
$72.56
$80.35
Medium risk (<10%) entry points
Buy Call
Sell Call
$96.21
Buy Put:
Sell Put:
$94.55
$82.86
$84.55
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
ES
Sharpe Ratio:
1.26%
Comparison:
ES, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is 7.15% higher than the industry
& is -44.93% lower than the market/S&P 500 average
Average Returns/Yield of
ES
Daily returns:
0.03%
Weekly returns:
0.17%
Monthly returns:
0.68%
Yearly returns:
7.85%
Comparison of returns:
Average annual returns/yield (last 3 years) is 4.14% above industry average
Classification:
ES, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.84
Statistical test of Returns:
ES has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.01%
Weekly Volatility:
4.49%
Monthly Volatility:
8.98%
Yearly Volatility:
31.11%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.31%
Volatility in last five trading days has been -34.92% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.09%
Weekly VaR:
-9.14%
Monthly VaR:
-18.29%
How Much Can the price of
ES
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-16%
Worst case (decline):
-63.35%
This translates to price declining to:
$75.42
This translates to price declining to:
$32.82
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
ES is a 29.08% riskier investment compared to the market/S&P 500 & is 10.58% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -1.05% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
ES
Beta in relation to market/S&P 500--0.45
Expected beta in 1 year's time:
0.491
Expected beta in 3 year's time:
0.695
Unlevered (debt free) Beta:
0.231
Beta in relation to Nasdaq (XNAS):
0.479
Beta in relation to all global stocks::
0.695
Beta Comparison & Analysis
Beta of competitors/peers::
0.556
Beta is -18.15% lower than peers
Average Industry Beta:
0.5
Beta is -8.99% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
2.70%
Sustainable growth rate is -22.65% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.019
Alpha is 49.63% above industry average alpha yield
Alpha is 121% higher than market/& is unsustainably high
Analysis of Cost of Capital of
ES
Equity cost of capital:
0.063
Equity cost of capital is -4.68% below industry mean WACC
Unlevered (without debt) cost of capital:
3.19%
Before-tax cost of debt:
2.86%
After-tax cost of debt:
2.26%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.26%
WACC is -12.97% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$30.33
Revenue growth rate per share of (3Y):
2.07
Annual revenue growth rate is -738.47% below industry average
EPS:
$3.76
Expected Annual growth rate of EPS (3Y):
7.75%
Expected future EPS growth rate is -225.27% lower than the Utilities�Regulated Electric industry
Free cash flow (FCF) per share:
-
Balance sheet equity growth per share: 15.80%
Equity growth rate per share is 169.31% higher than the industry
Debt per share
$52.95
EBITDA per share
$10.81
Valuation Analysis Today of
ES
P/E Ratio:
23.34
P/E Ratio of Competitors/Peers:
42.44
P/E ratio is -44.99% lower than main peers & is -15.69% lower than the industry
Stock price/value with industry average P/E ratio: $104.11
ES is -13.98% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $86.64
Present value of the expected future dividends only: $56.55
P/S (Price to Sales ratio):
2.95
Price to sales ratio is 1.70% above the industry mean
P/B (Price to book value ratio):
2.07
-
Price to free cash flow ratio is -7.76% lower than the industry
Net income growth rate (3Y):
9.00%
Net income growth rate is -405.54% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 16.63%
Dividend yeild: 2.77%
Previous Dividend: $0.64
Previous adjusted dividend: $0.64
Previous Dividend: $2.48
Expected next dividend best case: $0.66
Expected next dividend worst case: $0.61
Average dividend payment (long-term): $0.59
Average dividend increase/decrease (growth rate) % per period: 1.80%
Expected next dividend payment date: 28/09/2022
Expected next dividend record date: 17/08/2022
Expected next dividend declaration date: 08/02/2022
Previous dividend payment date: 30/06/2022
Previous dividend record date: 19/05/2022
Previous dividend declaration date: 05/04/2022
Dividend History:
2022-05-18--$0.64
2021-12-16--$0.60
2021-05-19--$0.60
2022-03-02--$0.64
2021-09-15--$0.60
2021-03-03--$0.60
Dividend growth rate is -280.01% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
123.64%
Net debt to equity ratio:
140.38%
Debt to assets ratio:
37.22%
Net debt to assets ratio:
42.26%
Debt-to-asset ratio is -40.78% below industry average
Ability to repay debt:
Interest coverage ratio:
6.26
Interest coverage ratio is 143.27% more than industry average
Looking forward:
Debt growth rate:
12.52%
Annual debt growth is -73% lower than industry average debt growth rate
Debt repayment rate in last quarter: 4.14%
Analysis of Key Statistics
Correlation of price movement with the market:
0.572
Statistical significance of correlation:
ES has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.597
Stock price is -4.18% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.597
Correlation of price movement with Nasdaq (^IXIC):
0.022
Covariance of price movement with the market:
0.025
Kurtosis
13.697
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
0.416
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
ES
Gross Profit Margin Ratio:
191%
Operating Profit Margin Ratio:
19.71%
Operating profit margin is 69.37% higher than the industry
Net Profit Margin Ratio:
191%
Effective Tax Rate:
21.91%
Effective tax rate is 8.82% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
8.75%
Return on equity (ROE) is -3.77% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
2.63%
Return on assets (ROA) is 13.87% higher than the industry
Financial Leverage:
1.6x
Current Ratio:
0.62
Current ratio is -74.09% below industry average
Cash Conversion Cycle (days):
-128.5
Cash conversion cycle is -236.01% below industry average
The remaining useful life of property plant & equipment is: 27.2 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
1.1M
Each employee generates -59% less revenue than industry average revenue per employee
EBITDA generated per employee:
405.8K
Each employee generates -65% less EBITDA than industry average revenue per employee
Profit generated per employee:
140.7K
Each employee generates -65% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 42.6K
Each employee generates 29% more free cash flow than industry average revenue per employee
Assets/Capital per employee
5.0M
Each employee generates 29% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
ES
WEC ENERGY GROUP, INC. (XNYS:WEC)
CONSOLIDATED EDISON, INC. (XNYS:ED)
AMERICAN WATER WORKS COMPANY, INC. (XNYS:AWK)
PG&E CORPORATION (XNYS:PCG)
EDISON INTERNATIONAL (XNYS:EIX)
FIRSTENERGY CORP. (XNYS:FE)
DTE ENERGY COMPANY (XNYS:DTE)
AMEREN CORPORATION (XNYS:AEE)
PPL CORPORATION (XNYS:PPL)
Current Analyst Ratings
Strong buy�21%
Buy�4%
Hold�29%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
10.51B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
5.51B
5.00B
-
-
-
-
2.93B
2.93B
8.40M
597.81M
1.48B
3.74B
2.07B
1.30B
1.67B
366.29M
1.30B
Statement of Cash Flow
Date:
Period:
526.28M
Differed Income Tax :
67.56M
Stock Based Compensation :
-
Change in Working Capital :
- 368366.00K
Accounts Receivables:
-
Other Working Capital:
11.76M
Other Non-Cash Items:
- 298855.00K
Net Cash Provided by Operating Activities:
371.94M
Investments in PP&E:
- 764594.00K
Net Acquisitions:
- 113856.00K
Purchases of Investments:
- 76182.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
46.18M
-
46.18M
1.66B
287.04M
1.48B
3.47B
33.85B
4.48B
-
1.97B
-
5.52B
45.82B
-
49.29B
1.49B
2.53B
-
-
1.58B
5.60B
18.34B
5.67B
28.70B
-
34.30B
1.79B
5.23B
- 41571.0K
-
March 31, 2022 at 6:00:00 AM
8.44B
14.84B
49.13B
-
20.87B
20.8B
90.41M
5.98M
- 858247.00K
- 791605.00K
-
-
- 215770.00K
1.44B
429.89M
-
- 56419.00K
164.59M
221.01M
371.94M
- 764594.00K
- 392654.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
ES
2023
2024
2025
2026
2027
$92.75
$128.11
$132.02
$136.06
$140.21