NRG ENERGY INC (NRG) Stock Fundamental Analysis
NYSE:NRG - New York Stock Exchange, Inc. - US6293775085 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to NRG. NRG was compared to 46 industry peers in the Electric Utilities industry. The financial health of NRG is average, but there are quite some concerns on its profitability. A decent growth rate in combination with a cheap valuation! Better keep an eye on NRG.
1. Profitability
1.1 Basic Checks
NRG had positive earnings in the past year.
NRG had a positive operating cash flow in the past year.
NRG had positive earnings in 4 of the past 5 years.
Of the past 5 years NRG 4 years had a positive operating cash flow.
1.2 Ratios
NRG's Return On Assets of 3.78% is amongst the best of the industry. NRG outperforms 81.08% of its industry peers.
With an excellent Return On Equity value of 35.60%, NRG belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 3.56%, NRG is doing worse than 62.16% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.78% | ||
| ROE | 35.6% | ||
| ROIC | 3.56% |
ROA(3y)4.21%
ROA(5y)10.3%
ROE(3y)27.95%
ROE(5y)76.37%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
With a Profit Margin value of 3.19%, NRG is not doing good in the industry: 86.49% of the companies in the same industry are doing better.
NRG's Operating Margin of 2.82% is on the low side compared to the rest of the industry. NRG is outperformed by 89.19% of its industry peers.
NRG's Gross Margin of 15.91% is on the low side compared to the rest of the industry. NRG is outperformed by 75.68% of its industry peers.
NRG's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 2.82% | ||
| PM (TTM) | 3.19% | ||
| GM | 15.91% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-34.28%
GM growth 5Y-20.44%
2. Health
2.1 Basic Checks
NRG has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for NRG has been reduced compared to 1 year ago.
NRG has less shares outstanding than it did 5 years ago.
The debt/assets ratio for NRG is higher compared to a year ago.
2.2 Solvency
NRG has an Altman-Z score of 2.05. This is not the best score and indicates that NRG is in the grey zone with still only limited risk for bankruptcy at the moment.
With an excellent Altman-Z score value of 2.05, NRG belongs to the best of the industry, outperforming 83.78% of the companies in the same industry.
The Debt to FCF ratio of NRG is 8.87, which is on the high side as it means it would take NRG, 8.87 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of NRG (8.87) is better than 86.49% of its industry peers.
A Debt/Equity ratio of 4.14 is on the high side and indicates that NRG has dependencies on debt financing.
NRG's Debt to Equity ratio of 4.14 is on the low side compared to the rest of the industry. NRG is outperformed by 97.30% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.14 | ||
| Debt/FCF | 8.87 | ||
| Altman-Z | 2.05 |
ROIC/WACC0.46
WACC7.66%
2.3 Liquidity
A Current Ratio of 1.17 indicates that NRG should not have too much problems paying its short term obligations.
NRG has a better Current ratio (1.17) than 75.68% of its industry peers.
NRG has a Quick Ratio of 1.10. This is a normal value and indicates that NRG is financially healthy and should not expect problems in meeting its short term obligations.
NRG has a better Quick ratio (1.10) than 75.68% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.17 | ||
| Quick Ratio | 1.1 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 226.15% over the past year.
Looking at the last year, NRG shows a decrease in Revenue. The Revenue has decreased by -5.87% in the last year.
Measured over the past years, NRG shows a very strong growth in Revenue. The Revenue has been growing by 24.91% on average per year.
EPS 1Y (TTM)226.15%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%34.75%
Revenue 1Y (TTM)-5.87%
Revenue growth 3Y46.9%
Revenue growth 5Y24.91%
Sales Q2Q%-9.1%
3.2 Future
Based on estimates for the next years, NRG will show a very strong growth in Earnings Per Share. The EPS will grow by 61.13% on average per year.
NRG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.49% yearly.
EPS Next Y670.86%
EPS Next 2Y189.62%
EPS Next 3Y107.36%
EPS Next 5Y61.13%
Revenue Next Year2.84%
Revenue Next 2Y2.46%
Revenue Next 3Y2.29%
Revenue Next 5Y3.49%
3.3 Evolution
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 11.04, the valuation of NRG can be described as very reasonable.
NRG's Price/Earnings ratio is a bit cheaper when compared to the industry. NRG is cheaper than 70.27% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 29.63. NRG is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 14.55 indicates a correct valuation of NRG.
Based on the Price/Forward Earnings ratio, NRG is valued a bit cheaper than the industry average as 67.57% of the companies are valued more expensively.
NRG is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.04 | ||
| Fwd PE | 14.55 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NRG is valued a bit more expensive than 67.57% of the companies in the same industry.
86.49% of the companies in the same industry are more expensive than NRG, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.83 | ||
| EV/EBITDA | 15.76 |
4.3 Compensation for Growth
NRG's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
NRG's earnings are expected to grow with 107.36% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.02
PEG (5Y)N/A
EPS Next 2Y189.62%
EPS Next 3Y107.36%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.66%, NRG has a reasonable but not impressive dividend return.
NRG's Dividend Yield is slightly below the industry average, which is at 3.53.
Compared to the average S&P500 Dividend Yield of 2.29, NRG is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.66% |
5.2 History
On average, the dividend of NRG grows each year by 69.83%, which is quite nice.
NRG has been paying a dividend for at least 10 years, so it has a reliable track record.
NRG has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)69.83%
Div Incr Years5
Div Non Decr Years7
5.3 Sustainability
NRG pays out 45.48% of its income as dividend. This is a bit on the high side, but may be sustainable.
NRG's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP45.48%
EPS Next 2Y189.62%
EPS Next 3Y107.36%
105.96
-5.11 (-4.6%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners98.3%
Inst Owner Change-10.07%
Ins Owners0.61%
Ins Owner Change-2.41%
Market Cap21.46B
Analysts78.67
Price Target112.82 (6.47%)
Short Float %3.2%
Short Ratio2.27
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.66% |
Yearly Dividend1.74
Dividend Growth(5Y)69.83%
DP45.48%
Div Incr Years5
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)54.92%
Min EPS beat(2)-5.85%
Max EPS beat(2)115.68%
EPS beat(4)2
Avg EPS beat(4)80.25%
Min EPS beat(4)-33.55%
Max EPS beat(4)244.71%
EPS beat(8)2
Avg EPS beat(8)-84.19%
EPS beat(12)4
Avg EPS beat(12)-76.76%
EPS beat(16)7
Avg EPS beat(16)121.62%
Revenue beat(2)0
Avg Revenue beat(2)-22.26%
Min Revenue beat(2)-23.77%
Max Revenue beat(2)-20.75%
Revenue beat(4)1
Avg Revenue beat(4)-10.73%
Min Revenue beat(4)-23.77%
Max Revenue beat(4)5.34%
Revenue beat(8)3
Avg Revenue beat(8)22.11%
Revenue beat(12)7
Avg Revenue beat(12)30.63%
Revenue beat(16)11
Avg Revenue beat(16)41.01%
PT rev (1m)5.51%
PT rev (3m)22.72%
EPS NQ rev (1m)-6.53%
EPS NQ rev (3m)139.59%
EPS NY rev (1m)-4.54%
EPS NY rev (3m)-3.45%
Revenue NQ rev (1m)3.12%
Revenue NQ rev (3m)4.2%
Revenue NY rev (1m)-1.1%
Revenue NY rev (3m)-0.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.04 | ||
| Fwd PE | 14.55 | ||
| P/S | 0.76 | ||
| P/FCF | 17.83 | ||
| P/OCF | 13.46 | ||
| P/B | 8.52 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.76 |
EPS(TTM)9.6
EY9.06%
EPS(NY)7.28
Fwd EY6.87%
FCF(TTM)5.94
FCFY5.61%
OCF(TTM)7.87
OCFY7.43%
SpS138.81
BVpS12.44
TBVpS-27.57
PEG (NY)0.02
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.78% | ||
| ROE | 35.6% | ||
| ROCE | 4.84% | ||
| ROIC | 3.56% | ||
| ROICexc | 3.81% | ||
| ROICexgc | 8.12% | ||
| OM | 2.82% | ||
| PM (TTM) | 3.19% | ||
| GM | 15.91% | ||
| FCFM | 4.28% |
ROA(3y)4.21%
ROA(5y)10.3%
ROE(3y)27.95%
ROE(5y)76.37%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-34.28%
GM growth 5Y-20.44%
F-Score8
Asset Turnover1.19
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.14 | ||
| Debt/FCF | 8.87 | ||
| Debt/EBITDA | 5.12 | ||
| Cap/Depr | 31.48% | ||
| Cap/Sales | 1.39% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 78.38% | ||
| Profit Quality | 134.23% | ||
| Current Ratio | 1.17 | ||
| Quick Ratio | 1.1 | ||
| Altman-Z | 2.05 |
F-Score8
WACC7.66%
ROIC/WACC0.46
Cap/Depr(3y)39.18%
Cap/Depr(5y)41.59%
Cap/Sales(3y)1.41%
Cap/Sales(5y)1.82%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)226.15%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%34.75%
EPS Next Y670.86%
EPS Next 2Y189.62%
EPS Next 3Y107.36%
EPS Next 5Y61.13%
Revenue 1Y (TTM)-5.87%
Revenue growth 3Y46.9%
Revenue growth 5Y24.91%
Sales Q2Q%-9.1%
Revenue Next Year2.84%
Revenue Next 2Y2.46%
Revenue Next 3Y2.29%
Revenue Next 5Y3.49%
EBIT growth 1Y143.38%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year73.5%
EBIT Next 3Y21.85%
EBIT Next 5Y14.25%
FCF growth 1Y1154.17%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y302.78%
OCF growth 3YN/A
OCF growth 5YN/A