Long-established in the Utilities - Regulated industry, Public Service Enterprise Group Inc (PEG, Financial) has built a stellar reputation over the years. Recently, the company experienced a daily gain of 0.49%, alongside a three-month change of 11.79%. Despite these gains, insights from the GF Score indicate potential challenges ahead. Key metrics such as financial strength, growth, and valuation have shown declines, suggesting that Public Service Enterprise Group Inc may not maintain its historical performance levels. This article delves into these critical metrics to uncover the evolving narrative of Public Service Enterprise Group Inc.
What Is the GF Score?
The GF Score is a comprehensive ranking system developed by GuruFocus. It evaluates stocks based on five key aspects: financial strength, profitability, growth, valuation, and momentum. These aspects are closely correlated with long-term stock performance, as evidenced by backtesting data from 2006 to 2021. A higher GF Score generally indicates a greater potential for future returns. The GF Score ranges from 0 to 100, with 100 representing the highest potential.
- Financial strength rank: 4/10
- Profitability rank: 7/10
- Growth rank: 1/10
- GF Value rank: 3/10
- Momentum rank: 6/10
Based on these metrics, GuruFocus assigned Public Service Enterprise Group Inc a GF Score of 65 out of 100, indicating a cautious outlook on its potential to outperform in the future.
Understanding Public Service Enterprise Group Inc's Business
Public Service Enterprise Group Inc, with a market cap of $44.56 billion and annual sales of $10.43 billion, operates primarily through its regulated utility subsidiary, PSE&G. This subsidiary delivers gas and electricity in New Jersey to over 4.3 million customers. The company also manages the Long Island Power Authority system and has recently divested its fossil fuel-based power plants, focusing more on nuclear and clean energy projects. Despite a solid operating margin of 23.26%, the company faces significant challenges.
Financial Strength and Challenges
Public Service Enterprise Group Inc's financial metrics reveal some concerns. The company's interest coverage ratio of 3.08 is lower than 57.11% of its industry peers, indicating potential difficulties in managing interest expenses. Furthermore, its Altman Z-Score of 1.37 suggests a risk of financial distress, and its cash-to-debt ratio at 0.01 highlights a significant debt burden. The debt-to-Ebitda ratio of 4.95 also exceeds the cautionary threshold set by investment experts, underscoring the need for careful financial management.
Growth Prospects and Predictability
The company's growth prospects are limited, as reflected by its low Growth rank of 1/10. Additionally, Public Service Enterprise Group Inc's predictability rank is only one star, which adds to the uncertainty regarding its future revenue and earnings consistency.
Conclusion
Considering Public Service Enterprise Group Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's challenging position for potential underperformance. Investors should weigh these factors carefully when considering this stock. For those looking for more robust investment opportunities, exploring companies with higher GF Scores might be advisable. Discover more potential investments with strong GF Scores through the GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
