Key Stats for Consolidated Edison, Inc.
Con Ed's a New York icon! Can it's stock light up your portfolio?
| Ticker | ED |
|---|---|
| Sector | Electric Utilities |
| Latest price | $74.43 |
| Value | $22,733M |
| Daily vol | $103M |
| Date | 19 January 2017 |
Useful Links
- Latest news from Google Finance and Yahoo Finance
- Latest results from SEC Edgar
- Website: http://www.coned.com/
Description
Consolidated Edison, Inc. is an electric utility that owns Consolidated Edison Company of New York, Inc., Orange and Rockland Utilities, Inc. It also owns electric and gas transmission businesses. Their customers are in New York City, Westchester County, south-eastern New York, northern New Jersey and north eastern Pennsylvania. Those customers range from businesses, consumers to other electricity companies.
Though if you've ever visited New York, you'll have seen their advertising or trucks! And if you think back to your history classes, Thomas Edison, yes he founded part of the business back in 1880.
Recent financials
Glacial you might say. At least at the top line. Sure the EPS is up 10% in 5 years, but, I fail to see how that could excite anyone.
| Metric | 2015A | 2014A | 2013A | 2012A | 2011A |
|---|---|---|---|---|---|
| Revenue | $12.6bn | $12.9bn | $12.3bn | $12.2bn | $12.9bn |
| EPS | $4.05 | $3.71 | $3.61 | $3.86 | $3.57 |
Competition
I don't think I've ever seen a competition statement like this before!
(We) do not consider it reasonably likely that another company would be authorized to provide utility delivery service of electricity, natural gas or steam where the company already provides service. Any such other company would need to obtain NYSPSC consent, satisfy applicable local requirements, install facilities to provide the service, meet applicable services standards, and charge customers comparable taxes and other fees and costs imposed on the service. A new delivery company would also be subject to extensive ongoing regulation by the NYSPSC.
Hey, we are a monopoly, dude! That aside, let's look at their "peers"! And frankly, it's hard to be impressed. Margins aren't amazing, nor are returns. :(
| Companies | Latest Sales | Operating Profit | Return on Equity |
|---|---|---|---|
| Consolidated Edison, Inc. | $12,074M | 30% | 9% |
| American Electric Power Company Inc | $16,204M | 33% | 3% |
| Dominion Resources, Inc. | $11,207M | 47% | 15% |
| Duke Energy Corp | $23,249M | 41% | 7% |
| Edison International | $11,325M | 35% | 8% |
| Exelon Corporation | $30,186M | 28% | 5% |
| Public Service Enterprise Group Inc. | $9,249M | 35% | 10% |
| Southern Co | $18,283M | 42% | 11% |
Though I suppose we can't really fault them on their returns since they are only allowed may 9% return on equity by their regulator.
Cash / Debt?
Consolidated Edison, Inc. has $14,541M of net debt. That is 4.1x it's latest operating profit. Now that sort of debt would normally worry me, but this is a utility, people want their tv to work, so a little more debt than the supermarket, is fine.
Wall Street thinks?
The professionals on Wall Street have a $73.04 for Consolidated Edison, Inc. and their recommendation to clients is Hold. That implies a downside of 2% to their target.
Valuation
And I sort of get that caution. This is a limited growth business, that's a highly regulated monopoly, that trades at a marginal discount to the market average.
| View Peers | Valuation | Forecast PE | Long-term Growth | Dividend Yield | FCF Yield |
|---|---|---|---|---|---|
| ED | $22,733M | 19x | 2% | 4% | 14% |
| AEP | $31,376M | 17x | 2% | 4% | 11% |
| D | $47,758M | 20x | 6% | 4% | 12% |
| DUK | $53,365M | 17x | 2% | 4% | 17% |
| EIX | $23,625M | 19x | 2% | 3% | 15% |
| EXC | $33,127M | 13x | 4% | 4% | 11% |
| PEG | $22,468M | 15x | 1% | 4% | 14% |
| SO | $48,696M | 17x | 4% | 4% | 16% |
Dividends
Consolidated Edison, Inc. is forecast to pay a dividend of $2.67 per share, compared with a historic dividend of $2.66 per share. That is a 0% growth. The forecast dividend of $2.67 compares to a forecast EPS of $3.96.
Catalysts
In the last 3 months the stock price has moved by 2% that compares with no change in the earnings. That's against a backdrop of sales down 5% in the nine-months to Sept, and net income up 2%.
I have to admit, I am a bit surprised... the stock took a 10% dive post Trump, as bond-proxies got hit, but's rebounded since. Plus if the US is going to engage in a major bout of investing, won't Electric Utilities be some of the big investors?
Am I missing a spark?
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Disclosure: I have no position in any of the stocks mentioned. However I may initiate a position within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. Reddit, moderators, and the author do not advise making investment decisions based on discussion in these posts. Analysis is not subject to validation and users take action at their own risk.
Author notes: u/shane_stockflare works at a financial website, Stockflare, and is a Chartered Financial Analyst.
Submitted January 19, 2017 at 12:23PM by shane_stockflare http://ift.tt/2k7yz9V
