Eversource Energy (NYSE: ES)

Sector: Utilities Industry: Utilities - Regulated Electric CIK: 0000072741
Market Cap 27.10 Bn
P/B 1.67
P/E 16.02
P/S 2.00
ROIC (Qtr) 5.66
Div Yield % 4.12
Rev 1y % (Qtr) 13.42
Total Debt (Qtr) 30.11 Bn
Debt/Equity (Qtr) 1.86
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About

Eversource Energy, a prominent player in the energy sector, is a public utility holding company based in the United States. Its stock is publicly traded under the symbols ES and ERV. The company operates primarily in the energy distribution and transmission industry, with a focus on delivering electricity, natural gas, and water to customers in Connecticut, Massachusetts, and New Hampshire. Eversource Energy's core business activities encompass the distribution and transmission of electricity, as well as the distribution of natural gas and water....

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Investment thesis

Bull case

  • Operating cash flow of 4.11B provides exceptional 547.09x coverage of minority interest expenses 7.52M, showing strong core operations.
  • Strong free cash flow of (45.10M) provides 64.33x coverage of acquisition spending (701000), indicating disciplined M&A strategy.
  • Tangible assets of 59.55B provide robust 19.94x coverage of other current liabilities 2.99B, indicating strong asset backing.
  • Operating cash flow of 4.11B provides strong 8.37x coverage of inventory 491.59M, indicating efficient inventory management.
  • Cash position of 135.35M provides exceptional 18x coverage of minority interest expenses 7.52M, indicating strong liquidity.

Bear case

  • Operating cash flow of 4.11B barely covers its investment activities of (4.31B), with a coverage ratio of -0.96, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 135.35M against inventory of 491.59M, the 0.28 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 4.11B provides thin coverage of dividend payments of (1.09B) with a -3.76 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 135.35M provide limited coverage of acquisition spending of (701000), which is -193.08x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 2.12B relative to inventory of 491.59M (4.32 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.

Legal Entity Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Utilities - Regulated Electric
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NEE Nextera Energy Inc 191.44 Bn 28.01 6.98 95.62 Bn
2 SO Southern Co 97.42 Bn 30.98 4.46 73.75 Bn
3 AEP American Electric Power Co Inc 64.38 Bn 33.83 4.24 0.00 Bn
4 DUK Duke Energy CORP 56.47 Bn 30.61 3.87 89.65 Bn
5 EXC Exelon Corp 48.53 Bn 17.53 2.00 50.08 Bn
6 ETR Entergy Corp /De/ 45.74 Bn 25.29 3.59 30.45 Bn
7 PEG Public Service Enterprise Group Inc 43.93 Bn 35.35 4.41 23.51 Bn
8 XEL Xcel Energy Inc 41.10 Bn 37.21 3.75 35.52 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.89 1.01
EV to Cash from Ops. EV/CFO 13.78 12.45
EV to Debt EV to Debt 1.88 171.92
EV to EBIT EV/EBIT 18.43 19.12
EV to EBITDA EV/EBITDA 12.44 15.67
EV to Free Cash Flow [EV/FCF] EV/FCF -1,256.86 -28.25
EV to Market Cap EV to Market Cap 2.09 1.84
EV to Revenue EV/Rev 4.18 4.72
Price to Book Value [P/B] P/B 1.67 2.60
Price to Earnings [P/E] P/E 16.02 18.53
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.55 1.94
Dividend Payout Ratio % Div Payout % (Qtr) 66.00 62.23
Dividend per Basic Share Div per Share (Qtr) 3.01 2.02
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -2,466.39 -218.37
Interest Coverage Int. cover (Qtr) 2.47 2.83
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 7.18 -68.90
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 407.77 73.92
Dividend Growth (1y) % Div 1y % (Qtr) 5.03 4.05
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 84.30 15.47
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 18.61 13.33
EBIT Growth (1y) % EBIT 1y % (Qtr) 31.02 15.81
EBT Growth (1y) % EBT 1y % (Qtr) 48.24 19.29
EPS Growth (1y) % EPS 1y % (Qtr) 100.88 21.26
FCF Growth (1y) % FCF 1y % (Qtr) 98.06 -35.52
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 19.74 11.97
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.21 0.22
Cash Payout Ratio Cash Payout (Qtr) 0.13 0.11
Cash Ratio Cash Ratio (Qtr) 0.02 0.98
Current Ratio Curr Ratio (Qtr) 0.65 2.72
Debt to Equity Ratio Debt/Equity (Qtr) 1.86 1.45
Interest Cover Ratio Int Coverage (Qtr) 2.47 2.83
Times Interest Earned Times Interest Earned (Qtr) 2.47 2.83
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 34.30 37.94
EBIT Margin % EBIT Margin % (Qtr) 22.71 316.94
EBT Margin % EBT Margin % (Qtr) 13.53 14.36
Gross Margin % Gross Margin % (Qtr) 45.60 41.20
Net Profit Margin % Net Margin % (Qtr) 12.50 12.57