We assign a fundamental rating of 3 out of 10 to FE. FE was compared to 46 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 valied quite expensively at the moment, while it does show a decent growth rate. Finally FE also has an excellent dividend rating.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year FE was profitable.
In the past year FE had a positive cash flow from operations.
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

The Return On Assets of FE (2.38%) is worse than 73.91% of its industry peers.
FE's Return On Equity of 10.39% is in line compared to the rest of the industry. FE outperforms 52.17% of its industry peers.
FE has a Return On Invested Capital of 4.34%. This is comparable to the rest of the industry: FE outperforms 56.52% of its industry peers.
The Average Return On Invested Capital over the past 3 years for FE is in line with the industry average of 4.57%.
The 3 year average ROIC (3.82%) for FE is below the current ROIC(4.34%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	2.38%
ROE	10.39%
ROIC	4.34%

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

FE's Profit Margin of 9.19% is on the low side compared to the rest of the industry. FE is outperformed by 73.91% of its industry peers.
In the last couple of years the Profit Margin of FE has declined.
The Operating Margin of FE (19.35%) is comparable to the rest of the industry.
FE's Operating Margin has declined in the last couple of years.
The Gross Margin of FE (70.32%) is better than 60.87% of its industry peers.
FE's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	19.35%
PM (TTM)	9.19%
GM	70.32%

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%

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ROA

ROE

ROIC

Operating and Profit Margin

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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

FE has an Altman-Z score of 0.78. This is a bad value and indicates that FE is not financially healthy and even has some risk of bankruptcy.
FE has a Altman-Z score of 0.78. This is comparable to the rest of the industry: FE outperforms 47.83% of its industry peers.
A Debt/Equity ratio of 2.02 is on the high side and indicates that FE has dependencies on debt financing.
The Debt to Equity ratio of FE (2.02) is worse than 86.96% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	2.02
Debt/FCF	N/A
Altman-Z	0.78

ROIC/WACC0.69

WACC6.29%

2.3 Liquidity

FE has a Current Ratio of 0.75. 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 Current ratio of 0.75. This is in the lower half of the industry: FE underperforms 67.39% of its industry peers.
A Quick Ratio of 0.64 indicates that FE may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.64, FE is in line with its industry, outperforming 50.00% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	0.75
Quick Ratio	0.64

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 4.26% over the past year.
The Earnings Per Share has been growing slightly by 0.31% on average over the past years.
FE shows a small growth in Revenue. In the last year, the Revenue has grown by 7.64%.
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)4.26%

EPS 3Y0.25%

EPS 5Y0.31%

EPS Q2Q%-2.35%

Revenue 1Y (TTM)7.64%

Revenue growth 3Y6.57%

Revenue growth 5Y4.07%

Sales Q2Q%11.24%

3.2 Future

Based on estimates for the next years, FE will show a small growth in Earnings Per Share. The EPS will grow by 5.86% on average per year.
FE is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.92% yearly.

EPS Next Y-0.29%

EPS Next 2Y3.2%

EPS Next 3Y4.74%

EPS Next 5Y5.86%

Revenue Next Year2%

Revenue Next 2Y2.76%

Revenue Next 3Y3.21%

Revenue Next 5Y3.92%

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.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 17.47, FE is valued on the expensive side.
FE's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 28.41, FE is valued a bit cheaper.
With a Price/Forward Earnings ratio of 16.78, FE is valued correctly.
Compared to the rest of the industry, the Price/Forward Earnings ratio of FE is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.64, FE is valued a bit cheaper.

		Industry Rank	Sector Rank
PE	17.47
Fwd PE	16.78

4.2 Price Multiples

FE's Enterprise Value to EBITDA ratio is in line with the industry average.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	11.91

4.3 Compensation for Growth

PEG (NY)N/A

PEG (5Y)56.9

EPS Next 2Y3.2%

EPS Next 3Y4.74%

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5. Dividend

5.1 Amount

FE has a Yearly Dividend Yield of 3.76%. Purely for dividend investing, there may be better candidates out there.
FE's Dividend Yield is a higher than the industry average which is at 2.90.
FE's Dividend Yield is rather good when compared to the S&P500 average which is at 1.83.

		Industry Rank	Sector Rank
Dividend Yield	3.76%

5.2 History

The dividend of FE has a limited annual growth rate of 1.59%.
FE has been paying a dividend for at least 10 years, so it has 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

75.49% of the earnings are spent on dividend by FE. This is not a sustainable payout ratio.
FE's earnings are growing more than its dividend. This makes the dividend growth sustainable.

DP75.49%

EPS Next 2Y3.2%

EPS Next 3Y4.74%

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FIRSTENERGY CORP / FE FAQ

Can you provide the ChartMill fundamental rating for FIRSTENERGY CORP?

ChartMill assigns a fundamental rating of 3 / 10 to FE.

What is the valuation status for FE stock?

ChartMill assigns a valuation rating of 2 / 10 to FIRSTENERGY CORP (FE). This can be considered as Overvalued.

How profitable is FIRSTENERGY CORP (FE) stock?

FIRSTENERGY CORP (FE) has a profitability rating of 4 / 10.

What is the financial health of FIRSTENERGY CORP (FE) stock?

The financial health rating of FIRSTENERGY CORP (FE) is 1 / 10.

Is the dividend of FIRSTENERGY CORP sustainable?

The dividend rating of FIRSTENERGY CORP (FE) is 7 / 10 and the dividend payout ratio is 75.49%.