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Gauging Crucial Quantitative Indicators for Utility Stocks

PART:
1 2 3
Part 3
Gauging Crucial Quantitative Indicators for Utility Stocks PART 3 OF 3

Why these Utility Stocks Look Weak

NRG Energy

On April 21, NRG Energy (NRG) had a short-interest-to-equity float ratio of 4.1%, the highest among the utility stocks that make up the Utilities Select Sector SPDR ETF (XLU).

Why these Utility Stocks Look Weak

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In the past three months, NRG Energy has risen 6%. Its short-interest-to-equity float ratio has fallen 16.6% during this period. Its net-debt-to-EBITDA ratio is 6.6x. We discussed NRG’s earnings trend in Part 2 of this series.

As we saw in the first two parts of this series, NRG Energy had the highest implied volatility among the utility stocks that make up XLU. Its high short interest could explain why it has high implied volatility. High short interest in a stock shows the market’s expectation of a large fall, which can cause a stock’s implied volatility to rise.

Consolidated Edison

Consolidated Edison’s (ED) short-interest-to-equity float ratio is 3.7%. Its net-debt-to-EBITDA ratio is 4.1x. Its stock has risen 8.2% in the last three months while its short-interest-to-equity float ratio has fallen 25.1%.

In the last four quarters, Consolidated Edison’s revenue has risen 8.5% and its operating profit has risen 19.8%. Its operating profit margin is 20.5%.

Dominion Resources

Dominion Resources’ (D) short-interest-to-equity float ratio is 3.3%. Its net-debt-to-EBITDA ratio is 6.3x. In the last three months, the stock has risen 2.3% while its short-interest-to-equity float ratio has fallen 9.4%. In the last four quarters, Dominion Resources’ revenue has risen 20.3% while its operating profit has risen 28.4%. Its operating profit margin is 31.5%.

Ameren

Ameren’s (AEE) short-interest-to-equity float ratio is 3.3%. Its net-debt-to-EBITDA ratio is 3.5x. In the last three months, the stock has risen 5.8% while its short-interest-to-equity float ratio has risen 11.1%. In the last four quarters, Ameren’s revenue has risen 3.7% and its operating profit has risen 3.6%. Its operating profit margin is 22.7%.

WEC Energy Group

WEC Energy Group’s (WEC) short-interest-to-equity float ratio is 2.8%. In the last three months, WEC stock has risen 3.1% while its short-interest-to-equity float ratio has fallen 8.1%. Its net-debt-to-EBITDA ratio is 4.1x.

In the last four quarters, WEC’s revenue has risen 6.2% while its adjusted operating profit has risen 4.9%. Its operating profit margin is 22.5%.

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