FIRSTENERGY CORP (FE) Stock Fundamental Analysis
NYSE:FE - New York Stock Exchange, Inc. - US3379321074 - Common Stock - Currency: USD
We assign a fundamental rating of 3 out of 10 to FE. FE was compared to 47 industry peers in the Electric Utilities industry. FE has a medium profitability rating, but doesn't score so well on its financial health evaluation. FE is quite expensive at the moment. It does show a decent growth rate. Finally FE also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year FE was profitable.
FE had a positive operating cash flow in the past year.
In the past 5 years FE has always been profitable.
Each year in the past 5 years FE had a positive operating cash flow.
1.2 Ratios
FE's Return On Assets of 2.06% is on the low side compared to the rest of the industry. FE is outperformed by 82.98% of its industry peers.
FE has a worse Return On Equity (8.63%) than 68.09% of its industry peers.
FE has a Return On Invested Capital (4.10%) which is in line with its industry peers.
The Average Return On Invested Capital over the past 3 years for FE is significantly below the industry average of 38.54%.
The 3 year average ROIC (3.82%) for FE is below the current ROIC(4.10%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.06% | ||
| ROE | 8.63% | ||
| ROIC | 4.1% |
ROA(3y)1.67%
ROA(5y)2.05%
ROE(3y)7.47%
ROE(5y)10.42%
ROIC(3y)3.82%
ROIC(5y)3.73%
1.3 Margins
With a Profit Margin value of 7.78%, FE is not doing good in the industry: 80.85% of the companies in the same industry are doing better.
In the last couple of years the Profit Margin of FE has declined.
The Operating Margin of FE (17.73%) is worse than 68.09% of its industry peers.
FE's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 71.58%, FE is in the better half of the industry, outperforming 70.21% of the companies in the same industry.
FE's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.73% | ||
| PM (TTM) | 7.78% | ||
| GM | 71.58% |
OM growth 3Y6.67%
OM growth 5Y-4.97%
PM growth 3Y-14.28%
PM growth 5Y-2.47%
GM growth 3Y-1.11%
GM growth 5Y-0.69%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), FE is destroying value.
The number of shares outstanding for FE has been increased compared to 1 year ago.
FE has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, FE has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.68, we must say that FE is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 0.68, FE is not doing good in the industry: 65.96% of the companies in the same industry are doing better.
FE has a Debt/Equity ratio of 1.82. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of FE (1.82) is worse than 74.47% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.82 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.68 |
ROIC/WACC0.5
WACC8.23%
2.3 Liquidity
A Current Ratio of 0.42 indicates that FE may have some problems paying its short term obligations.
The Current ratio of FE (0.42) is worse than 91.49% of its industry peers.
FE has a Quick Ratio of 0.42. This is a bad value and indicates that FE is not financially healthy enough and could expect problems in meeting its short term obligations.
FE has a Quick ratio of 0.34. This is amonst the worse of the industry: FE underperforms 85.11% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.42 | ||
| Quick Ratio | 0.34 |
3. Growth
3.1 Past
FE shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.13%, which is quite good.
Measured over the past 5 years, FE shows a small growth in Earnings Per Share. The EPS has been growing by 0.31% on average per year.
The Revenue for FE has decreased by -13.66% in the past year. This is quite bad
Measured over the past years, FE shows a small growth in Revenue. The Revenue has been growing by 4.07% on average per year.
EPS 1Y (TTM)9.13%
EPS 3Y0.25%
EPS 5Y0.31%
EPS Q2Q%21.82%
Revenue 1Y (TTM)-13.66%
Revenue growth 3Y6.57%
Revenue growth 5Y4.07%
Sales Q2Q%14.54%
3.2 Future
The Earnings Per Share is expected to grow by 5.42% on average over the next years.
Based on estimates for the next years, FE will show a small growth in Revenue. The Revenue will grow by 3.66% on average per year.
EPS Next Y-0.99%
EPS Next 2Y2.91%
EPS Next 3Y4.36%
EPS Next 5Y5.42%
Revenue Next Year0.93%
Revenue Next 2Y2.37%
Revenue Next 3Y2.72%
Revenue Next 5Y3.66%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 14.46, which indicates a correct valuation of FE.
FE's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of FE to the average of the S&P500 Index (27.28), we can say FE is valued slightly cheaper.
FE is valuated correctly with a Price/Forward Earnings ratio of 14.28.
FE's Price/Forward Earnings is on the same level as the industry average.
FE is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.46 | ||
| Fwd PE | 14.28 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as FE.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 11.05 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)47.1
EPS Next 2Y2.91%
EPS Next 3Y4.36%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.46%, FE is a good candidate for dividend investing.
FE's Dividend Yield is a higher than the industry average which is at 3.67.
Compared to an average S&P500 Dividend Yield of 2.42, FE pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.46% |
5.2 History
The dividend of FE has a limited annual growth rate of 1.59%.
FE has paid a dividend for at least 10 years, which is a reliable track record.
FE has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)1.59%
Div Incr Years2
Div Non Decr Years10
5.3 Sustainability
FE pays out 90.32% of its income as dividend. This is not a sustainable payout ratio.
The dividend of FE is growing, but earnings are growing more, so the dividend growth is sustainable.
DP90.32%
EPS Next 2Y2.91%
EPS Next 3Y4.36%
39.76
-0.62 (-1.54%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners85.37%
Inst Owner Change-0.88%
Ins Owners0.13%
Ins Owner Change1.62%
Market Cap22.95B
Analysts75.38
Price Target45.88 (15.39%)
Short Float %3.4%
Short Ratio3.7
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.46% |
Yearly Dividend1.69
Dividend Growth(5Y)1.59%
DP90.32%
Div Incr Years2
Div Non Decr Years10
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.11%
Min EPS beat(2)-7.63%
Max EPS beat(2)7.84%
EPS beat(4)1
Avg EPS beat(4)-2.48%
Min EPS beat(4)-7.9%
Max EPS beat(4)7.84%
EPS beat(8)4
Avg EPS beat(8)-1.48%
EPS beat(12)4
Avg EPS beat(12)-2.25%
EPS beat(16)6
Avg EPS beat(16)-2.23%
Revenue beat(2)1
Avg Revenue beat(2)-9.53%
Min Revenue beat(2)-24.16%
Max Revenue beat(2)5.11%
Revenue beat(4)1
Avg Revenue beat(4)-8.04%
Min Revenue beat(4)-24.16%
Max Revenue beat(4)5.11%
Revenue beat(8)2
Avg Revenue beat(8)-4.98%
Revenue beat(12)6
Avg Revenue beat(12)0.31%
Revenue beat(16)7
Avg Revenue beat(16)-0.27%
PT rev (1m)0.05%
PT rev (3m)2.36%
EPS NQ rev (1m)-0.86%
EPS NQ rev (3m)-3.32%
EPS NY rev (1m)-0.25%
EPS NY rev (3m)-12.37%
Revenue NQ rev (1m)0.76%
Revenue NQ rev (3m)1.02%
Revenue NY rev (1m)-0.08%
Revenue NY rev (3m)-2.78%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.46 | ||
| Fwd PE | 14.28 | ||
| P/S | 1.65 | ||
| P/FCF | N/A | ||
| P/OCF | 6.43 | ||
| P/B | 1.83 | ||
| P/tB | 3.3 | ||
| EV/EBITDA | 11.05 |
EPS(TTM)2.75
EY6.92%
EPS(NY)2.79
Fwd EY7.01%
FCF(TTM)-1.17
FCFYN/A
OCF(TTM)6.18
OCFY15.55%
SpS24.17
BVpS21.77
TBVpS12.04
PEG (NY)N/A
PEG (5Y)47.1
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.06% | ||
| ROE | 8.63% | ||
| ROCE | 5.42% | ||
| ROIC | 4.1% | ||
| ROICexc | 4.11% | ||
| ROICexgc | 4.67% | ||
| OM | 17.73% | ||
| PM (TTM) | 7.78% | ||
| GM | 71.58% | ||
| FCFM | N/A |
ROA(3y)1.67%
ROA(5y)2.05%
ROE(3y)7.47%
ROE(5y)10.42%
ROIC(3y)3.82%
ROIC(5y)3.73%
ROICexc(3y)3.84%
ROICexc(5y)3.79%
ROICexgc(3y)4.39%
ROICexgc(5y)4.37%
ROCE(3y)4.93%
ROCE(5y)4.84%
ROICexcg growth 3Y5.98%
ROICexcg growth 5Y-6.21%
ROICexc growth 3Y6.95%
ROICexc growth 5Y-5.5%
OM growth 3Y6.67%
OM growth 5Y-4.97%
PM growth 3Y-14.28%
PM growth 5Y-2.47%
GM growth 3Y-1.11%
GM growth 5Y-0.69%
F-Score5
Asset Turnover0.26
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.82 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 5.45 | ||
| Cap/Depr | 246.8% | ||
| Cap/Sales | 30.43% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 85.07% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.42 | ||
| Quick Ratio | 0.34 | ||
| Altman-Z | 0.68 |
F-Score5
WACC8.23%
ROIC/WACC0.5
Cap/Depr(3y)241.74%
Cap/Depr(5y)219.91%
Cap/Sales(3y)26.04%
Cap/Sales(5y)24.94%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)9.13%
EPS 3Y0.25%
EPS 5Y0.31%
EPS Q2Q%21.82%
EPS Next Y-0.99%
EPS Next 2Y2.91%
EPS Next 3Y4.36%
EPS Next 5Y5.42%
Revenue 1Y (TTM)-13.66%
Revenue growth 3Y6.57%
Revenue growth 5Y4.07%
Sales Q2Q%14.54%
Revenue Next Year0.93%
Revenue Next 2Y2.37%
Revenue Next 3Y2.72%
Revenue Next 5Y3.66%
EBIT growth 1Y-14.04%
EBIT growth 3Y13.67%
EBIT growth 5Y-1.1%
EBIT Next Year63.21%
EBIT Next 3Y24.53%
EBIT Next 5Y15.23%
FCF growth 1Y-1.2%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y61.01%
OCF growth 3Y0.94%
OCF growth 5Y3.22%