PPL CORP (PPL) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:PPL - US69351T1060 - Common Stock
36.77 USD
+0.27 (+0.74%)
We assign a fundamental rating of 3 out of 10 to PPL. PPL was compared to 46 industry peers in the Electric Utilities industry. While PPL is still in line with the averages on profitability rating, there are concerns on its financial health. PPL is valied quite expensively at the moment, while 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.
- PPL had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- PPL has a worse Return On Assets (2.49%) than 63.04% of its industry peers.
- Looking at the Return On Equity, with a value of 7.58%, PPL is doing worse than 80.43% of the companies in the same industry.
- 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 has a Profit Margin of 12.16%. This is comparable to the rest of the industry: PPL outperforms 41.30% of its industry peers.
- In the last couple of years the Profit Margin of PPL has declined.
- With a Operating Margin value of 22.61%, PPL perfoms like the industry average, outperforming 56.52% of the companies in the same 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
- PPL 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 PPL remains at a similar level compared to 1 year ago.
- The number of shares outstanding for PPL has been reduced compared to 5 years ago.
- PPL has a worse debt/assets ratio than last year.
2.2 Solvency
- PPL has an Altman-Z score of 0.98. This is a bad value and indicates that PPL is not financially healthy and even has some risk of bankruptcy.
- With a decent Altman-Z score value of 0.98, PPL is doing good in the industry, outperforming 60.87% of the companies in the same industry.
- A Debt/Equity ratio of 1.22 is on the high side and indicates that PPL has dependencies on debt financing.
- PPL's Debt to Equity ratio of 1.22 is fine compared to the rest 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
WACC6.79%
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.
- A Quick Ratio of 0.66 indicates that PPL may have some problems paying its short term obligations.
- The Quick ratio of PPL (0.66) is comparable to the rest of the industry.
| 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%.
- Measured over the past years, PPL shows a decrease in Earnings Per Share. The EPS has been decreasing by -7.34% on average per year.
- PPL shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.42%.
- Measured over the past years, PPL shows a small growth in Revenue. The Revenue has been growing by 1.72% on average per year.
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 Y9.04%
EPS Next 2Y8.34%
EPS Next 3Y8.17%
EPS Next 5Y7.93%
Revenue Next Year10.48%
Revenue Next 2Y7.94%
Revenue Next 3Y6.96%
Revenue Next 5Y6.32%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 21.13, which indicates a rather expensive current valuation of PPL.
- Based on the Price/Earnings ratio, PPL is valued a bit more expensive than the industry average as 67.39% of the companies are valued more cheaply.
- PPL's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.25.
- The Price/Forward Earnings ratio is 18.65, which indicates a rather expensive current valuation of PPL.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of PPL is on the same level as its industry peers.
- PPL is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.13 | ||
| Fwd PE | 18.65 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, PPL is valued a bit more expensive than the industry average as 69.57% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.95 |
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)2.34
PEG (5Y)N/A
EPS Next 2Y8.34%
EPS Next 3Y8.17%
5. Dividend
5.1 Amount
- PPL has a Yearly Dividend Yield of 2.98%. Purely for dividend investing, there may be better candidates out there.
- PPL's Dividend Yield is comparable with the industry average which is at 2.90.
- Compared to an average S&P500 Dividend Yield of 1.82, PPL pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.98% |
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.
- PPL has decreased its dividend recently.
Dividend Growth(5Y)-8.78%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
- PPL pays out 71.70% of its income as dividend. This is not a sustainable payout ratio.
DP71.7%
EPS Next 2Y8.34%
EPS Next 3Y8.17%
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 21.13 and the Price/Book (PB) ratio is 1.89.
Can you provide the financial health for PPL stock?
The financial health rating of PPL CORP (PPL) is 2 / 10.