Aes Corp (NYSE: AES)

Sector: Utilities Industry: Utilities - Diversified CIK: 0000874761
Market Cap 10.89 Bn
P/B 2.33
P/E 16.56
P/S 0.83
ROIC (Qtr) 6.39
Div Yield % 6.20
Rev 1y % (Qtr) 1.89
Total Debt (Qtr) 31.90 Bn
Debt/Equity (Qtr) 8.25
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About

Investment thesis

Bull case

  • Strong operating cash flow of 3.91B provides 14.91x coverage of SG&A expenses 262M, showing efficient operational cost management.
  • Free cash flow of (2.21B) provides excellent 4.45x coverage of dividends (498M), indicating sustainable shareholder returns.
  • Cash reserves of 2.45B provide ample 11.22x coverage of acquisition spending 218M, enabling strategic growth opportunities.
  • Tangible assets of 48.42B provide robust 24.19x coverage of other current liabilities 2B, indicating strong asset backing.
  • Operating cash flow of 3.91B provides strong 6.43x coverage of inventory 607M, indicating efficient inventory management.

Bear case

  • Operating cash flow of 3.91B barely covers its investment activities of (6.23B), with a coverage ratio of -0.63, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 3.91B provides thin coverage of dividend payments of (498M) with a -7.84 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • High receivables of 1.79B relative to inventory of 607M (2.95 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Free cash flow of (2.21B) provides weak coverage of capital expenditures of 6.12B, with a -0.36 ratio suggesting additional external financing needs for growth initiatives.
  • Operating cash flow of 3.91B provides minimal -111.60x coverage of tax expenses of (35M), suggesting potential tax planning inefficiencies or unsustainable tax positions.

Business Segments Breakdown of Revenue (2024)

Business Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Utilities - Diversified
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SRE Sempra 45.16 Bn 45.90 4.31 32.69 Bn
2 BIP Brookfield Infrastructure Partners L.P. 19.75 Bn 57.75 0.89 65.44 Bn
3 AES Aes Corp 10.89 Bn 16.56 0.83 31.90 Bn
4 AQN Algonquin Power & Utilities Corp. 8.39 Bn -225.33 3.51 6.43 Bn
5 AVA Avista Corp 2.94 Bn 19.71 2.18 3.09 Bn
6 UTL Unitil Corp 0.89 Bn 17.81 1.67 0.93 Bn
7 CIG Energy Co Of Minas Gerais 0.00 Bn 0.00 0.00 -

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.55 0.69
EV to Cash from Ops. EV/CFO 12.67 19.02
EV to Debt EV to Debt 0.88 1.58
EV to EBIT EV/EBIT 10.47 20.34
EV to EBITDA EV/EBITDA 7.33 11.94
EV to Free Cash Flow [EV/FCF] EV/FCF -90.69 -22.87
EV to Market Cap EV to Market Cap 2.57 2.15
EV to Revenue EV/Rev 2.14 3.99
Price to Book Value [P/B] P/B 2.33 2.48
Price to Earnings [P/E] P/E 16.56 -11.27
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.24 1.04
Dividend Payout Ratio % Div Payout % (Qtr) 43.80 -25.27
Dividend per Basic Share Div per Share (Qtr) 0.70 1.48
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -22.70 -135.45
Interest Coverage Int. cover (Qtr) 1.80 2.23
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 24.38 17.33
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -1.41 81.54
Dividend Growth (1y) % Div 1y % (Qtr) 36.17 -0.35
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 6.49 98.90
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 24.44 14.34
EBIT Growth (1y) % EBIT 1y % (Qtr) -7.80 41.17
EBT Growth (1y) % EBT 1y % (Qtr) -10.94 73.58
EPS Growth (1y) % EPS 1y % (Qtr) 0.63 56.76
FCF Growth (1y) % FCF 1y % (Qtr) 61.17 62.76
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -14.20 13.93
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.24 0.20
Cash Payout Ratio Cash Payout (Qtr) 0.05 0.23
Cash Ratio Cash Ratio (Qtr) 0.26 0.10
Current Ratio Curr Ratio (Qtr) 0.72 0.98
Debt to Equity Ratio Debt/Equity (Qtr) 8.25 4.25
Interest Cover Ratio Int Coverage (Qtr) 1.80 2.23
Times Interest Earned Times Interest Earned (Qtr) 1.80 2.23
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 32.30 38.38
EBIT Margin % EBIT Margin % (Qtr) 20.81 22.44
EBT Margin % EBT Margin % (Qtr) 9.22 11.60
Gross Margin % Gross Margin % (Qtr) 16.90 37.77
Net Profit Margin % Net Margin % (Qtr) 9.50 7.30