NRG ENERGY INC (NRG) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NRG - US6293775085 - Common Stock
155.11 USD
-0.93 (-0.6%)
153.99 USD
-1.12 (-0.72%)
NRG gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 46 industry peers in the Electric Utilities industry. NRG has an average financial health and profitability rating. NRG has a correct valuation and a medium growth rate.
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.
- Of the past 5 years NRG 4 years were profitable.
- Of the past 5 years NRG 4 years had a positive operating cash flow.
1.2 Ratios
- NRG has a Return On Assets of 5.73%. This is amongst the best in the industry. NRG outperforms 86.96% of its industry peers.
- With an excellent Return On Equity value of 69.75%, NRG belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
- NRG's Return On Invested Capital of 11.56% is amongst the best of the industry. NRG outperforms 100.00% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for NRG is significantly above the industry average of 4.58%.
- The 3 year average ROIC (10.16%) for NRG is below the current ROIC(11.56%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.73% | ||
| ROE | 69.75% | ||
| ROIC | 11.56% |
ROA(3y)2.54%
ROA(5y)4.09%
ROE(3y)21.93%
ROE(5y)31.38%
ROIC(3y)10.16%
ROIC(5y)11.32%
1.3 Margins
- With a Profit Margin value of 4.61%, NRG is not doing good in the industry: 84.78% of the companies in the same industry are doing better.
- In the last couple of years the Profit Margin of NRG has declined.
- Looking at the Operating Margin, with a value of 8.13%, NRG is doing worse than 86.96% of the companies in the same industry.
- In the last couple of years the Operating Margin of NRG has declined.
- NRG has a worse Gross Margin (21.15%) than 69.57% of its industry peers.
- In the last couple of years the Gross Margin of NRG has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.13% | ||
| PM (TTM) | 4.61% | ||
| GM | 21.15% |
OM growth 3Y-18.92%
OM growth 5Y-11.2%
PM growth 3Y-22.57%
PM growth 5Y-39.18%
GM growth 3Y-4.97%
GM growth 5Y-4.2%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so NRG is still creating some value.
- NRG has less shares outstanding than it did 1 year ago.
- Compared to 5 years ago, NRG has less shares outstanding
- The debt/assets ratio for NRG is higher compared to a year ago.
2.2 Solvency
- NRG has an Altman-Z score of 2.53. 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.
- NRG has a better Altman-Z score (2.53) than 95.65% of its industry peers.
- The Debt to FCF ratio of NRG is 6.99, which is on the high side as it means it would take NRG, 6.99 years of fcf income to pay off all of its debts.
- With an excellent Debt to FCF ratio value of 6.99, NRG belongs to the best of the industry, outperforming 86.96% of the companies in the same industry.
- NRG has a Debt/Equity ratio of 5.66. This is a high value indicating a heavy dependency on external financing.
- With a Debt to Equity ratio value of 5.66, NRG is not doing good in the industry: 93.48% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.66 | ||
| Debt/FCF | 6.99 | ||
| Altman-Z | 2.53 |
ROIC/WACC1.5
WACC7.72%
2.3 Liquidity
- NRG has a Current Ratio of 1.05. This is a normal value and indicates that NRG is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Current ratio, with a value of 1.05, NRG is in the better half of the industry, outperforming 76.09% of the companies in the same industry.
- A Quick Ratio of 0.99 indicates that NRG may have some problems paying its short term obligations.
- NRG has a better Quick ratio (0.99) than 76.09% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.05 | ||
| Quick Ratio | 0.99 |
3. Growth
3.1 Past
- NRG shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -10.10%.
- NRG shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 22.12% yearly.
- NRG shows a small growth in Revenue. In the last year, the Revenue has grown by 5.91%.
- NRG shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 23.42% yearly.
EPS 1Y (TTM)-10.1%
EPS 3Y-10.93%
EPS 5Y22.12%
EPS Q2Q%44.74%
Revenue 1Y (TTM)5.91%
Revenue growth 3Y1.39%
Revenue growth 5Y23.42%
Sales Q2Q%5.23%
3.2 Future
- NRG is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.67% yearly.
- Based on estimates for the next years, NRG will show a small growth in Revenue. The Revenue will grow by 4.44% on average per year.
EPS Next Y-11.03%
EPS Next 2Y0.39%
EPS Next 3Y5.34%
EPS Next 5Y9.67%
Revenue Next Year-2.89%
Revenue Next 2Y6.46%
Revenue Next 3Y5.97%
Revenue Next 5Y4.44%
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 17.97, the valuation of NRG can be described as rather expensive.
- The rest of the industry has a similar Price/Earnings ratio as NRG.
- When comparing the Price/Earnings ratio of NRG to the average of the S&P500 Index (28.60), we can say NRG is valued slightly cheaper.
- NRG is valuated correctly with a Price/Forward Earnings ratio of 16.91.
- NRG's Price/Forward Earnings ratio is in line with the industry average.
- When comparing the Price/Forward Earnings ratio of NRG to the average of the S&P500 Index (25.83), we can say NRG is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.97 | ||
| Fwd PE | 16.91 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NRG is on the same level as its industry peers.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of NRG indicates a rather cheap valuation: NRG is cheaper than 84.78% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.41 | ||
| EV/EBITDA | 11.95 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)0.81
EPS Next 2Y0.39%
EPS Next 3Y5.34%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.16%, NRG has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 2.90, NRG's dividend is way lower than its industry peers. On top of this 82.61% of the companies listed in the same industry pay a better dividend than NRG!
- NRG's Dividend Yield is slightly below the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.16% |
5.2 History
- On average, the dividend of NRG grows each year by 75.36%, which is quite nice.
- NRG has paid a dividend for at least 10 years, which is 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)75.36%
Div Incr Years5
Div Non Decr Years7
5.3 Sustainability
- 29.77% of the earnings are spent on dividend by NRG. This is a low number and sustainable payout ratio.
- The dividend of NRG is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP29.77%
EPS Next 2Y0.39%
EPS Next 3Y5.34%
NRG ENERGY INC / NRG FAQ
What is the ChartMill fundamental rating of NRG ENERGY INC (NRG) stock?
ChartMill assigns a fundamental rating of 5 / 10 to NRG.
Can you provide the valuation status for NRG ENERGY INC?
ChartMill assigns a valuation rating of 4 / 10 to NRG ENERGY INC (NRG). This can be considered as Fairly Valued.
Can you provide the profitability details for NRG ENERGY INC?
NRG ENERGY INC (NRG) has a profitability rating of 5 / 10.
What is the financial health of NRG ENERGY INC (NRG) stock?
The financial health rating of NRG ENERGY INC (NRG) is 5 / 10.
How sustainable is the dividend of NRG ENERGY INC (NRG) stock?
The dividend rating of NRG ENERGY INC (NRG) is 5 / 10 and the dividend payout ratio is 29.77%.