PPL CORP (PPL) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:PPL - US69351T1060 - Common Stock
36.63 USD
-0.55 (-1.48%)
36.42 USD
-0.21 (-0.57%)
PPL gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 46 industry peers in the Electric Utilities industry. There are concerns on the financial health of PPL while its profitability can be described as average. PPL is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- In the past year PPL was profitable.
- In the past year PPL had a positive cash flow from operations.
- PPL had positive earnings in 4 of the past 5 years.
- Each year in the past 5 years PPL had a positive operating cash flow.
1.2 Ratios
- PPL's Return On Assets of 2.49% is on the low side compared to the rest of the industry. PPL is outperformed by 63.04% of its industry peers.
- PPL's Return On Equity of 7.58% is on the low side compared to the rest of the industry. PPL is outperformed by 80.43% of its industry peers.
- PPL has a Return On Invested Capital (4.07%) which is comparable to the rest of the industry.
- PPL had an Average Return On Invested Capital over the past 3 years of 3.44%. This is in line with the industry average of 4.58%.
- The 3 year average ROIC (3.44%) for PPL is below the current ROIC(4.07%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.49% | ||
| ROE | 7.58% | ||
| ROIC | 4.07% |
ROA(3y)2.01%
ROA(5y)0.93%
ROE(3y)5.68%
ROE(5y)3.45%
ROIC(3y)3.44%
ROIC(5y)4.12%
1.3 Margins
- PPL's Profit Margin of 12.16% is in line compared to the rest of the industry. PPL outperforms 41.30% of its industry peers.
- PPL's Profit Margin has declined in the last couple of years.
- The Operating Margin of PPL (22.61%) is comparable to the rest of the industry.
- In the last couple of years the Operating Margin of PPL has declined.
- PPL has a Gross Margin of 78.67%. This is in the better half of the industry: PPL outperforms 73.91% of its industry peers.
- In the last couple of years the Gross Margin of PPL has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.61% | ||
| PM (TTM) | 12.16% | ||
| GM | 78.67% |
OM growth 3Y-6.63%
OM growth 5Y-10.87%
PM growth 3YN/A
PM growth 5Y-14.16%
GM growth 3Y-2.69%
GM growth 5Y-2.44%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so PPL is destroying value.
- PPL has about the same amout of shares outstanding than it did 1 year ago.
- Compared to 5 years ago, PPL has less shares outstanding
- The debt/assets ratio for PPL is higher compared to a year ago.
2.2 Solvency
- Based on the Altman-Z score of 0.98, we must say that PPL is in the distress zone and has some risk of bankruptcy.
- Looking at the Altman-Z score, with a value of 0.98, PPL is in the better half of the industry, outperforming 60.87% of the companies in the same industry.
- PPL has a Debt/Equity ratio of 1.22. This is a high value indicating a heavy dependency on external financing.
- PPL has a Debt to Equity ratio of 1.22. This is in the better half of the industry: PPL outperforms 67.39% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.22 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.98 |
ROIC/WACC0.6
WACC6.8%
2.3 Liquidity
- A Current Ratio of 0.77 indicates that PPL may have some problems paying its short term obligations.
- Looking at the Current ratio, with a value of 0.77, PPL is in line with its industry, outperforming 47.83% of the companies in the same industry.
- PPL has a Quick Ratio of 0.77. This is a bad value and indicates that PPL is not financially healthy enough and could expect problems in meeting its short term obligations.
- PPL's Quick ratio of 0.66 is in line compared to the rest of the industry. PPL outperforms 52.17% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.77 | ||
| Quick Ratio | 0.66 |
3. Growth
3.1 Past
- PPL shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by 0.00%.
- The Earnings Per Share has been decreasing by -7.34% on average over the past years.
- Looking at the last year, PPL shows a quite strong growth in Revenue. The Revenue has grown by 8.42% in the last year.
- PPL shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.72% yearly.
EPS 1Y (TTM)0%
EPS 3Y16.96%
EPS 5Y-7.34%
EPS Q2Q%14.29%
Revenue 1Y (TTM)8.42%
Revenue growth 3Y13.53%
Revenue growth 5Y1.72%
Sales Q2Q%8.37%
3.2 Future
- The Earnings Per Share is expected to grow by 7.93% on average over the next years.
- PPL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.32% yearly.
EPS Next Y8.98%
EPS Next 2Y8.34%
EPS Next 3Y8.18%
EPS Next 5Y7.93%
Revenue Next Year10.49%
Revenue Next 2Y7.85%
Revenue Next 3Y6.83%
Revenue Next 5Y6.32%
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.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- PPL is valuated rather expensively with a Price/Earnings ratio of 21.05.
- Compared to the rest of the industry, the Price/Earnings ratio of PPL indicates a slightly more expensive valuation: PPL is more expensive than 67.39% of the companies listed in the same industry.
- PPL is valuated rather cheaply when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
- PPL is valuated rather expensively with a Price/Forward Earnings ratio of 18.58.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of PPL indicates a slightly more expensive valuation: PPL is more expensive than 60.87% of the companies listed in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.32, PPL is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.05 | ||
| Fwd PE | 18.58 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, PPL is valued a bit more expensive than 69.57% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.98 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates PPL does not grow enough to justify the current Price/Earnings ratio.
PEG (NY)2.35
PEG (5Y)N/A
EPS Next 2Y8.34%
EPS Next 3Y8.18%
5. Dividend
5.1 Amount
- PPL has a Yearly Dividend Yield of 3.05%.
- PPL's Dividend Yield is comparable with the industry average which is at 2.93.
- Compared to an average S&P500 Dividend Yield of 1.82, PPL pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.05% |
5.2 History
- The dividend of PPL decreases each year by -8.78%.
- PPL has been paying a dividend for at least 10 years, so it has a reliable track record.
- The dividend of PPL decreased recently.
Dividend Growth(5Y)-8.78%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
- 71.70% of the earnings are spent on dividend by PPL. This is not a sustainable payout ratio.
DP71.7%
EPS Next 2Y8.34%
EPS Next 3Y8.18%
PPL CORP / PPL FAQ
What is the ChartMill fundamental rating of PPL CORP (PPL) stock?
ChartMill assigns a fundamental rating of 3 / 10 to PPL.
What is the valuation status of PPL CORP (PPL) stock?
ChartMill assigns a valuation rating of 1 / 10 to PPL CORP (PPL). This can be considered as Overvalued.
Can you provide the profitability details for PPL CORP?
PPL CORP (PPL) has a profitability rating of 4 / 10.
What are the PE and PB ratios of PPL CORP (PPL) stock?
The Price/Earnings (PE) ratio for PPL CORP (PPL) is 21.05 and the Price/Book (PB) ratio is 1.88.
Can you provide the financial health for PPL stock?
The financial health rating of PPL CORP (PPL) is 2 / 10.