AES Corporation Reported Higher 1Q17 Earnings

1 2 3 4
Part 3
AES Corporation Reported Higher 1Q17 Earnings PART 3 OF 4

AES Corporation’s Valuation after Its 1Q17 Earnings


At $7 billion, AES Corporation (AES) seems to be trading at a relatively fair valuation compared to the industry average. However, it seems to be trading at a premium to its historical average. On May 8, 2017, it was trading at an EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple of 8.3x. Its five-year historical EV-to-EBITDA multiple is near 7.6x. The industry average is a little over 10x.

Industry giant Duke Energy (DUK) is currently trading at a valuation multiple of 10.0x, while NextEra Energy (NEE) is trading at a multiple near 12.2x. Dominion Resources’ valuation ratio is just above 15x. Southern Company’s (SO) ratio is near 12x.

AES Corporation&#8217;s Valuation after Its 1Q17 Earnings

Interested in XLU? Don't miss the next report.

Receive e-mail alerts for new research on XLU

Success! You are now receiving e-mail alerts for new research. A temporary password for your new Market Realist account has been sent to your e-mail address.

Success! has been added to your Ticker Alerts.

Success! has been added to your Ticker Alerts. Subscriptions can be managed in your user profile.

The EV-to-EBITDA ratio gives a comparative idea of a company’s valuation, regardless of its capital structure. EV is the combination of a company’s market capitalization and debt minus its cash holdings.

Utilities (XLU) have largely traded near an average PE (price-to-earnings) multiple of 15x in the last several years. However, they’re currently trading at a PE multiple beyond 20x.


Although AES has underperformed its peers in terms of market performance, its dividend profile is attractive and beats many large-cap peers. To learn more about its dividends, read Comparing AES’s Dividend Profile with Its Peers. To compare Southern Company and Duke Energy’s dividend profiles, read Southern Company and Duke Energy: A Dividend Face-Off.


Please select a profession that best describes you: