PEG 75.49 (-0.44%)
US7445731067Utilities - RegulatedUtilities - Diversified

Last update on 2024-06-05

Public Service Enterprise Group (PEG) - Piotroski F-Score Analysis for Year 2023 (Final Score: 8/9)

Analyze PEG's financial strength using the Piotroski Score. PEG scores 8/9 in profitability, liquidity, and operational efficiency for 2023.

Knowledge hint:
The Piotroski F-Score is a number between 0 to 9 which reflects the strength of a company's financial position. It is based on 9 criteria involving profitability, liquidity, and leverage. This model helps investors identify stocks that are strong, undervalued investments.
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Short Analysis - Piotroski Score: 8

We're running Public Service Enterprise Group (PEG) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Criteria
Company has a positive net income?
1
Company has a positive cash flow?
1
Return on Assets (ROA) are growing?
1
Operating Cashflow are higher than Netincome?
1
Leverage is declining?
0
Current Ratio is growing?
1
Number of shares not diluted?
1
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
1

Based on the Piotroski F-Score, we analyzed the Public Service Enterprise Group (PEG) on its profitability, liquidity, and operating efficiency. Here's what we found: Profitability: PEG is doing well with net income, positive cash flows, and improving returns on assets. They also have more cash flow from operations than their net income, which is good. Liquidity: PEG’s current ratio improved slightly, but it's still lower than the industry average, indicating potential liquidity concerns. Their leverage has been rising, so they're taking on more debt, which could be risky. Operating Efficiency: PEG showed gains with their gross margin and asset turnover ratio, indicating better operational efficiency. PEG received an impressive score of 8 out of 9 on the Piotroski scale, showing strong financial health in most areas.

Insights for Value Investors Seeking Stable Income

Given PEG's high Piotroski score of 8, showing strong profitability and improving efficiency, it’s a stock worth considering. However, watch their debt levels and liquidity closely as these might be areas of potential risk.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Public Service Enterprise Group (PEG)

Company has a positive net income?

Netincome assesses if the company is generating profits, a key indicator of its financial health.

Historical Net Income of Public Service Enterprise Group (PEG)

Public Service Enterprise Group (PEG) has reported a net income of $2,563,000,000 for 2023, which is a significant positive figure. This strong performance speaks to PEG's profitability and operational effectiveness. If we examine the historical net income data for PEG over the past two decades, the trend indicates consistent profitability with few exceptions. Notably, there was a dip in 2021 where the net income was negative ($-648,000,000); however, this was rapidly reversed to a substantial profit in the following year. Overall, PEG's net income history confirms a solid financial foundation. Thus, PEG earns a solid 1 point for this criterion.

Company has a positive cash flow?

The Cash Flow from Operations (CFO) measures the money a company generates from its core business activities. Positive CFO is vital.

Historical Operating Cash Flow of Public Service Enterprise Group (PEG)

The CFO for Public Service Enterprise Group (PEG) in 2023 is $3,806,000,000, which is highly positive. This indicates robust operating performance and effective cash management within the firm's core operations. Over the past 20 years, PEG's CFO has been trending upwards, showing strong and consistent positive cash flows with minor fluctuations. For instance, a growth from $1,447,000,000 in 2003 to $3,806,000,000 in 2023 reveals solid financial health and sustainability. This positive trend in CFO adds 1 point to the Piotroski score.

Return on Assets (ROA) are growing?

Change in ROA measures the improvement or deterioration in a company’s return on assets, indicating how efficiently assets are used to generate earnings. A rise in ROA suggests better asset utilization.

Historical change in Return on Assets (ROA) of Public Service Enterprise Group (PEG)

Public Service Enterprise Group (PEG) has shown an increase in its ROA from 0.0211 in 2022 to 0.0515 in 2023, which is a positive trend. The company's ROA has more than doubled within this period, indicating significantly improved efficiency in asset utilization. However, when compared to the industry median, which typically ranges from 0.2683 to 0.5221 over the last two decades, PEG's ROA is relatively modest. This improvement to 0.0515, while beneficial, still lags substantially behind industry standards, signaling potential areas for continued improvement. Therefore, PEG earns 1 point for its positive change in ROA.

Operating Cashflow are higher than Netincome?

This criterion compares the Operating Cash Flow against the Net Income, considering if operational activities generate more cash than the company's reported earnings.

Historical accruals of Public Service Enterprise Group (PEG)

In 2023, Public Service Enterprise Group (PEG) reported an Operating Cash Flow of $3,806 million and a Net Income of $2,563 million. Since the Operating Cash Flow exceeds the Net Income, this is a positive indicator, suggesting the company generates more cash from operations than it reports as earnings, leading to a score of 1 point. Analyzing historical data, PEG’s trend of operating cash flow surpassing net income is consistent, except for 2021 when there was a significant net loss. Such a trend reinforces the reliability of earnings, as strong operational cash flows propose operational efficiency and lower earnings manipulation. Overall, this indicates financial health and stability for PEG.

Liquidity of Public Service Enterprise Group (PEG)

Leverage is declining?

Change in leverage reflects the company's change in risk. A decrease signifies lower risk, while an increase indicates escalating financial commitments.

Historical leverage of Public Service Enterprise Group (PEG)

In 2023, Public Service Enterprise Group's leverage increased to 0.3539 from 0.3421 in 2022. This uptick suggests heightening financial risk, marking a 3.44% increase year-over-year. Historically, the last 20 years show fluctuations, with a noteworthy low in 2012 (0.2108) and subsequent gradual ascension. While the current leverage remains moderate, the ongoing upward trend from 0.2947 in 2020 to 0.3539 in 2023 might signal concerns about rising debt levels, meriting close monitoring by investors and stakeholders.

Current Ratio is growing?

Current Ratio focuses on the company’s ability to pay its short-term liabilities with its short-term assets. This is crucial parameter to gauge PEG's liquidity position and financial stability.

Historical Current Ratio of Public Service Enterprise Group (PEG)

Public Service Enterprise Group (PEG) saw an increment in its current ratio from 0.6442 in 2022 to 0.667 in 2023. This uptick suggests a slight improvement in the company's liquidity position. Historically, the company's current ratio demonstrates a declining trend from a high of 1.4494 in 2010. However, compared to the industry median of 0.8538 for the same period, PEG's current ratio is still below par. Even though PEG added a point in the Piotroski score due to the increase, maintaining a ratio below 1 can indicate challenges in covering short-term liabilities. Therefore, while the upward trend is positive, deeper liquidity issues might still loom.

Number of shares not diluted?

Change in outstanding shares evaluates whether a company is repurchasing shares or issuing new ones. Share repurchases often signal management’s confidence in the company.

Historical outstanding shares of Public Service Enterprise Group (PEG)

From 2022 to 2023, the outstanding shares of Public Service Enterprise Group (PEG) remained constant at 498,000,000 shares. Therefore, no points are added in this criterion. Reflecting on the company's outstanding shares history, there has been relative stability, hovering around 508 million shares from 2013 to 2018 before a slight reduction towards 498 million shares in recent years. This consistency can indicate diligent fiscal management but does not streamline the company's equity for this period positively for Piotroski's F-Score metric.

Operating of Public Service Enterprise Group (PEG)

Cross Margin is growing?

The Gross Margin criterion assesses the percentage of revenue remaining after accounting for the cost of goods sold (COGS). It reflects a company's pricing strategy and operational efficiency. An upward trend in gross margin indicates improved profitability.

Historical gross margin of Public Service Enterprise Group (PEG)

For Public Service Enterprise Group (PEG), the Gross Margin has increased from 0.2657 in 2022 to 0.4296 in 2023. This reflects a substantial improvement in operational efficiency and profitability. Over the past 20 years, PEG's Gross Margin peaked in 2011 at 0.5715, while the industry's median gross margin was generally lower, except for a few years. Currently, PEG's Gross Margin significantly exceeds the industry's median of 0.3416 for 2023, signalling superior performance. Hence, 1 point should be added for this criterion as the trend is favorable.

Asset Turnover Ratio is growing?

Asset Turnover measures the efficiency of a company's use of its assets to generate sales.

Historical asset turnover ratio of Public Service Enterprise Group (PEG)

Public Service Enterprise Group (PEG) has shown an increase in its asset turnover ratio from 0.2006 in 2022 to 0.226 in 2023. This positive trend suggests enhanced efficiency in utilizing its assets to generate revenue. Over the past 20 years, PEG's asset turnover has seen some fluctuations, reaching its peak at 0.4638 in 2008 and its low at 0.1963 in 2021. Despite the increase in 2023, the current asset turnover ratio is still significantly below its historical highs, indicating room for further improvement. This increase results in adding 1 point to this criterion in the Piotroski Analysis.


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