Public Service Enterprise Group
Public Service Enterprise (PEG) is a diversified utility serving electric and gas to nearly 4 million customers. PEG has noteworthy exposure to competitive operations, which makes its earnings relatively less stable. In 2017, Public Service Enterprise Group stock has managed to rise nearly 20%, beating broader utilities (XLU) and even broader markets (SPX-INDEX) (SPY) by a fair margin.
Public Service Enterprise Group is a hybrid utility stock that has been trading at a premium for a while. Its EV-to-EBITDA multiple currently stands around 11.3x against its five-year historical multiple of 8x. Thus, PEG stock appears fairly pricey compared to both the industry average and its historical average.
As earlier discussed, hybrid utilities’ relatively less stable earnings generally lead to volatile stock price movements.
According to Wall Street analysts, PEG has a mean price target of $52.3 against its current market price of $52.2, which indicates flattish movement from PEG stock going forward.
Among the 14 analysts covering PEG, three recommend it as a “strong buy,” while six recommend it as a “buy.” Five analysts rate PEG as a “hold” while none of them rate it as a “sell” as of December 13, 2017.