Long-established in the Utilities - Regulated industry, Public Service Enterprise Group Inc (PEG, Financial) has enjoyed a stellar reputation. It has recently witnessed a daily gain of 0.87%, juxtaposed with a three-month change of 19.36%. However, fresh insights from the GF Score hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Public Service Enterprise Group Inc.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 4/10
- Profitability rank: 7/10
- Growth rank: 2/10
- GF Value rank: 3/10
- Momentum rank: 6/10
Based on the above method, GuruFocus assigned Public Service Enterprise Group Inc the GF Score of 67 out of 100, which signals poor future outperformance potential.
Understanding Public Service Enterprise Group Inc Business
Public Service Enterprise Group is the holding company for a regulated utility (PSE&G) and other nonregulated businesses such as nuclear power generation and clean energy projects. PSE&G provides regulated gas and electricity delivery services in New Jersey to a combined 4.3 million customers. Public Service Enterprise Group also operates the Long Island Power Authority system. In 2022, the company sold its gas and oil power plants in the mid-Atlantic, New York, and the Northeast. With a market cap of $44.17 billion and sales of $10.24 billion, the company maintains an operating margin of 22.8%.
Financial Strength Breakdown
Public Service Enterprise Group Inc's financial strength indicators present some concerning insights about the company's balance sheet health. The company's interest coverage ratio of 3.13 positions it worse than 57.76% of 464 companies in the Utilities - Regulated industry. This ratio highlights potential challenges the company might face when handling its interest expenses on outstanding debt. Additionally, the company's Altman Z-Score is just 1.36, which is below the distress zone of 1.81, suggesting potential financial distress. The low cash-to-debt ratio at 0.01 and a debt-to-Ebitda ratio of 5.52 further indicate struggles in managing debt levels.
Growth Prospects
A lack of significant growth is another area where Public Service Enterprise Group Inc seems to falter, as evidenced by the company's low Growth rank. Additionally, Public Service Enterprise Group Inc's predictability rank is just one star out of five, adding to investor uncertainty regarding revenue and earnings consistency.
Conclusion
Considering the company's financial strength, profitability, and growth metrics, the GF Score highlights Public Service Enterprise Group Inc's unparalleled position for potential underperformance. Investors seeking more robust opportunities may explore other companies with stronger GF Scores using 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.
