Analyzing SCANA’s Valuation, Dividends, and More
SCANA Corporation (SCG) is grappling with a criminal investigation surrounding recent rate hikes. These rate hikes were part of a rate recovery initiative for its half-constructed—and now-abandoned—V.C. Summer nuclear power plant.
SCANA abandoned the construction of this nuclear power plant in July 2017 when the project’s cost exceeded $20 billion after Westinghouse’s bankruptcy. For a detailed account of SCANA’s power plant woes, please read SCANA Stock Has Fallen 33% in 2017: What’s Next?
Interested in SCG? Don't miss the next report.
Receive e-mail alerts for new research on SCG
SCANA’s five-year historical average valuation is ~10.0x. Consequently, SCANA seems to be trading at a fair discount compared to its historical average and industry average.
SCANA’s huge fall in the last few months might have resulted in its discounted valuation. However, investors could overlook the comparatively cheaper valuation due to concerns about its abandoned power plant and current weakness.
Among SCANA’s peers, NextEra Energy (NEE) is trading at a valuation multiple of 13.0x, and Duke Energy (DUK) is trading at ~12.0x. Southern Company (SO) stock is trading at an EV-to-EBITDA valuation ratio near 11.0x.
SCANA is currently trading at a dividend yield of 5.0%, substantially higher than the industry average (XLU) of 3.5%. Its five-year historical average dividend yield is ~3.7%. SCANA’s stock correction could be the main driver behind its revitalized dividend yield.
For more information about dividend profiles in this industry, please read The Top Utilities by Dividend: NEE, DUK, SO, and D.
- enterprise value to earnings before interest, tax, depreciation, and amortization ↩