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Last update on 2024-06-06

Xcel Energy (XEL) - Piotroski F-Score Analysis for Year 2023 (Final Score: 4/9)

Detailed Piotroski F-Score analysis of Xcel Energy (XEL) for 2023 reveals crucial financial metrics and insights, scoring 4 out of 9 points.

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: 4

We're running Xcel Energy (XEL) 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?
0
Operating Cashflow are higher than Netincome?
1
Leverage is declining?
0
Current Ratio is growing?
0
Number of shares not diluted?
0
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
0

The Piotroski F-Score, ranging from 0 to 9, measures the strength of a company's financial position based on profitability, liquidity, and operating efficiency. Xcel Energy (XEL) has a Piotroski Score of 4, reflecting a mixed but moderately positive financial standing.

Insights for Value Investors Seeking Stable Income

Given its Piotroski Score of 4, Xcel Energy shows some positive indicators such as consistent positive net income and operating cash flows. However, factors like increasing leverage, decreasing current ratio, and declining asset turnover suggest caution. This score might not present a strong buy signal, so it would be wise to explore further and consider other factors before investing in Xcel Energy.

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

Profitability of Xcel Energy (XEL)

Company has a positive net income?

One of the simplest yet vital criteria in the Piotroski analysis is whether a company's net income is positive.

Historical Net Income of Xcel Energy (XEL)

For Xcel Energy (XEL), the net income for the year 2023 is $1,771,000,000, which is indeed positive. Adding to this impressive figure is the consistent upward trend in net income observed over the past 20 years. Starting from $622.39 million in 2003, the net income exhibits robust growth year after year with only minor fluctuations. Such a positive net income trajectory reflects the company's ability to maintain profitability, thus earning 1 point for this criterion.

Company has a positive cash flow?

Cash Flow from Operations (CFO) represents the money a company generates from its normal business operations. A positive CFO indicates that the company is generating sufficient cash to maintain and grow its operations, which is crucial for long-term sustainability and solvency.

Historical Operating Cash Flow of Xcel Energy (XEL)

In 2023, Xcel Energy's CFO stands at $5,327,000,000, which is notably positive. Adding 1 point based on the Piotroski Analysis criteria. To foster argumentation, looking at the historical data over the last 20 years, the company has shown consistent positive operating cash flows, which emphasizes its stable cash-generating capability. For instance, in 2003, CFO was already at $1,381,507,000 and has generally been on an upward trend. Notably, there was a substantial increase in 2023, suggesting robust operational efficiency and successful management of core business activities. This consistent positive CFO underpins long-term financial health and gives reassurance to investors regarding the firm's ability to fund operations without relying on external financing.

Return on Assets (ROA) are growing?

Change in ROA measures the change in return on assets to gauge operational efficiency. A positive change in ROA is a sign of improved performance.

Historical change in Return on Assets (ROA) of Xcel Energy (XEL)

The ROA for Xcel Energy decreased marginally from 0.0292 in 2022 to 0.0283 in 2023. This drop is minimal (around 3%), suggesting that operational efficiency may have slightly deteriorated. When placed in the context of industry median ROA, which hovers much higher at around 0.4109 in 2023, Xcel Energy's ROA of 0.0283 appears somewhat weak. Therefore, this criterion does not add 1 point for 2023 based on the given data.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income is a measure indicating the quality of earnings. If Operating Cash Flow exceeds Net Income, it suggests that the company is generating real cash from its operations and not relying on non-cash accounting adjustments.

Historical accruals of Xcel Energy (XEL)

For Xcel Energy (XEL) in 2023, the Operating Cash Flow stands at $5,327 million, significantly higher than the Net Income of $1,771 million. Therefore, for this criterion, XEL scores 1 point. This trend is favorable as it underscores the company's ability to generate substantial cash from its core operations, reflecting robust financial health. Over the past 20 years, an increasing trend in operating cash flow—with notable spikes in 2022 and 2023—further reinforces the positive outlook. Meanwhile, Net Income has also shown a consistent upward trajectory, albeit at a more moderate pace, which aligns well with the company's growing cash flow.

Liquidity of Xcel Energy (XEL)

Leverage is declining?

Change in leverage refers to the year-over-year change in the company's financial leverage, indicating its ability to manage its long-term obligations.

Historical leverage of Xcel Energy (XEL)

The leverage of Xcel Energy (XEL) has increased from 0.3898 in 2022 to 0.405 in 2023, indicating an increase in leverage. Historically, the company maintained relatively lower leverage ratios hovering around the 0.3 range for the majority of the last 20 years. An increased leverage in 2023 may signal higher risk due to more debt exposure or potentially greater investments funded by debt. This trend could be interpreted as a negative signal, resulting in 0 points for this criterion in Piotroski’s analysis as it indicates the company's worsening ability to manage financial leverage efficiently.

Current Ratio is growing?

The current ratio measures a company's ability to pay short-term obligations with short-term assets. It is important because it indicates the company's short-term liquidity.

Historical Current Ratio of Xcel Energy (XEL)

For Xcel Energy (XEL), the current ratio has decreased from 0.8463 in 2022 to 0.7199 in 2023. This decrease in the Current Ratio is concerning as it suggests a decline in the company's liquidity position. The lower current ratio indicates that Xcel Energy is less capable of covering its short-term liabilities with its short-term assets. Furthermore, comparing this to the industry median current ratio of 0.7878 for the same period highlights a relatively weaker liquidity position. Over the last 20 years, a trend analysis reveals that Xcel Energy's current ratio has generally been below the industry median, indicating persistent liquidity challenges. Consequently, based on this criterion, Xcel Energy does not earn a point here.

Number of shares not diluted?

The change in shares outstanding is an important indicator of shareholder dilution. A decrease in shares outstanding suggests a company is buying back shares, showing confidence.

Historical outstanding shares of Xcel Energy (XEL)

From 2022 to 2023, Xcel Energy's outstanding shares increased from 547,000,000 to 552,000,000. This increase is not favorable as it indicates a dilution of shareholder value. This trend garners 0 points in the Piotroski Analysis. Looking at the historical data over 20 years, there has been a consistent rise in outstanding shares, further indicating dilution over the long term.

Operating of Xcel Energy (XEL)

Cross Margin is growing?

Change in Gross Margin reflects a company's ability to increase sales while controlling costs. An increase is a positive indicator.

Historical gross margin of Xcel Energy (XEL)

Xcel Energy’s Gross Margin increased from 0.3828 in 2022 to 0.4209 in 2023, resulting in a 1 point score for this criterion. Observing the 20-year trend, the Gross Margin has fluctuated but shows a recent increase, surpassing the industry median of 0.4109 in 2023, highlighting competitive pricing strategies and operational efficiency.

Asset Turnover Ratio is growing?

Change in Asset Turnover is a measure of the efficiency with which a company uses its assets to generate sales revenues. It is crucial to assess management effectiveness.

Historical asset turnover ratio of Xcel Energy (XEL)

In 2023, Xcel Energy's Asset Turnover decreased to 0.2268 from 0.2572 in 2022. This indicates a decline in the efficiency of the company's use of its assets to generate revenue, resulting in 0 points for this criterion. Analyzing the historical data over the last 20 years reveals a gradual downward trend in Asset Turnover from its peak of 0.4654 in 2008 to its current level. The consistent decrease in this ratio may suggest long-term operational challenges or larger asset bases not matched by proportional increases in revenue. Therefore, this trend can be concerning for investors focusing on asset productivity.


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