AES CORP (AES) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AES - US00130H1059 - Common Stock
14.92 USD
+0.3 (+2.05%)
14.99 USD
+0.07 (+0.47%)
Overall AES gets a fundamental rating of 4 out of 10. We evaluated AES against 20 industry peers in the Independent Power and Renewable Electricity Producers industry. There are concerns on the financial health of AES while its profitability can be described as average. AES has a correct valuation and a medium growth rate. Finally AES also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- In the past year AES was profitable.
- AES had a positive operating cash flow in the past year.
- The reported net income has been mixed in the past 5 years: AES reported negative net income in multiple years.
- Each year in the past 5 years AES had a positive operating cash flow.
1.2 Ratios
- Looking at the Return On Assets, with a value of 2.23%, AES is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
- AES's Return On Equity of 29.37% is amongst the best of the industry. AES outperforms 95.00% of its industry peers.
- AES has a Return On Invested Capital of 3.43%. This is in the better half of the industry: AES outperforms 75.00% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for AES is in line with the industry average of 4.09%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.23% | ||
| ROE | 29.37% | ||
| ROIC | 3.43% |
ROA(3y)0.89%
ROA(5y)0.31%
ROE(3y)11.23%
ROE(5y)4.16%
ROIC(3y)5.05%
ROIC(5y)6.06%
1.3 Margins
- With a decent Profit Margin value of 9.38%, AES is doing good in the industry, outperforming 70.00% of the companies in the same industry.
- In the last couple of years the Profit Margin of AES has grown nicely.
- AES has a better Operating Margin (14.83%) than 70.00% of its industry peers.
- AES's Operating Margin has declined in the last couple of years.
- AES's Gross Margin of 17.26% is on the low side compared to the rest of the industry. AES is outperformed by 80.00% of its industry peers.
- In the last couple of years the Gross Margin of AES has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.83% | ||
| PM (TTM) | 9.38% | ||
| GM | 17.26% |
OM growth 3Y-13.97%
OM growth 5Y-4.63%
PM growth 3YN/A
PM growth 5Y35.68%
GM growth 3Y-8.16%
GM growth 5Y-3.95%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), AES is destroying value.
- Compared to 1 year ago, AES has more shares outstanding
- The number of shares outstanding for AES has been increased compared to 5 years ago.
- The debt/assets ratio for AES is higher compared to a year ago.
2.2 Solvency
- Based on the Altman-Z score of 0.44, we must say that AES is in the distress zone and has some risk of bankruptcy.
- AES's Altman-Z score of 0.44 is in line compared to the rest of the industry. AES outperforms 55.00% of its industry peers.
- A Debt/Equity ratio of 6.85 is on the high side and indicates that AES has dependencies on debt financing.
- With a Debt to Equity ratio value of 6.85, AES is not doing good in the industry: 85.00% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.85 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.44 |
ROIC/WACC0.54
WACC6.34%
2.3 Liquidity
- AES has a Current Ratio of 0.72. This is a bad value and indicates that AES is not financially healthy enough and could expect problems in meeting its short term obligations.
- The Current ratio of AES (0.72) is worse than 70.00% of its industry peers.
- AES has a Quick Ratio of 0.72. This is a bad value and indicates that AES is not financially healthy enough and could expect problems in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 0.66, AES is doing worse than 70.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.72 | ||
| Quick Ratio | 0.66 |
3. Growth
3.1 Past
- The earnings per share for AES have decreased strongly by -10.78% in the last year.
- The Earnings Per Share has been growing by 9.23% on average over the past years. This is quite good.
- The Revenue has decreased by -1.55% in the past year.
- Measured over the past years, AES shows a small growth in Revenue. The Revenue has been growing by 3.80% on average per year.
EPS 1Y (TTM)-10.78%
EPS 3Y11.42%
EPS 5Y9.23%
EPS Q2Q%5.63%
Revenue 1Y (TTM)-1.55%
Revenue growth 3Y3.29%
Revenue growth 5Y3.8%
Sales Q2Q%1.89%
3.2 Future
- AES is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.68% yearly.
- AES is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.94% yearly.
EPS Next Y2.23%
EPS Next 2Y4.6%
EPS Next 3Y3.8%
EPS Next 5Y5.68%
Revenue Next Year-2.73%
Revenue Next 2Y0.69%
Revenue Next 3Y1.86%
Revenue Next 5Y8.94%
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- AES is valuated cheaply with a Price/Earnings ratio of 7.21.
- Based on the Price/Earnings ratio, AES is valued cheaply inside the industry as 95.00% of the companies are valued more expensively.
- The average S&P500 Price/Earnings ratio is at 28.82. AES is valued rather cheaply when compared to this.
- AES is valuated cheaply with a Price/Forward Earnings ratio of 6.40.
- 95.00% of the companies in the same industry are more expensive than AES, based on the Price/Forward Earnings ratio.
- When comparing the Price/Forward Earnings ratio of AES to the average of the S&P500 Index (25.95), we can say AES is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.21 | ||
| Fwd PE | 6.4 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, AES is valued a bit cheaper than 65.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.46 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PEG (NY)3.24
PEG (5Y)0.78
EPS Next 2Y4.6%
EPS Next 3Y3.8%
5. Dividend
5.1 Amount
- AES has a Yearly Dividend Yield of 4.82%, which is a nice return.
- AES's Dividend Yield is rather good when compared to the industry average which is at 1.36. AES pays more dividend than 90.00% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, AES pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.82% |
5.2 History
- The dividend of AES has a limited annual growth rate of 5.08%.
- AES has paid a dividend for at least 10 years, which is a reliable track record.
- AES has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)5.08%
Div Incr Years12
Div Non Decr Years12
5.3 Sustainability
- 43.88% of the earnings are spent on dividend by AES. This is a bit on the high side, but may be sustainable.
- AES's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP43.88%
EPS Next 2Y4.6%
EPS Next 3Y3.8%
AES CORP / AES FAQ
What is the ChartMill fundamental rating of AES CORP (AES) stock?
ChartMill assigns a fundamental rating of 4 / 10 to AES.
What is the valuation status for AES stock?
ChartMill assigns a valuation rating of 5 / 10 to AES CORP (AES). This can be considered as Fairly Valued.
What is the profitability of AES stock?
AES CORP (AES) has a profitability rating of 5 / 10.
What is the financial health of AES CORP (AES) stock?
The financial health rating of AES CORP (AES) is 0 / 10.
Is the dividend of AES CORP sustainable?
The dividend rating of AES CORP (AES) is 8 / 10 and the dividend payout ratio is 43.88%.