SPWR - Public Service Enterprise Group: Revisiting The Growth Thesis

2024-07-21 11:08:09 ET

Summary

• Public Service Enterprise Group is the largest electric and natural gas utility in New Jersey, with its service territory encompassing most of the state.
• PEG stock yields 3.22%, lower than some peers, but increases dividends annually, potentially offering higher yields in the future.
• The company's net debt and net interest expenses have been rising, which has been putting pressure on the company's ability to grow its earnings.
• The company could see its net income surge over the next few years if the Federal Reserve really does cut interest rates and the company starts refinancing its new debt.
• The balance sheet remains strong, but the stock appears overvalued.

Public Service Enterprise Group Incorporated ( PEG ) is the largest electric and natural gas utility in the heavily populated state of New Jersey. The company’s website describes it thusly:

Today, Public Service Enterprise Group Inc. is a diversified energy company headquartered in Newark, N.J. PSEG’s principal operating subsidiaries are: Public Service Electric and Gas Co., New Jersey’s largest provider of electric and natural gas service, PSEG Power and PSEG Long Island. PSEG has approximately 12,500 employees, who are carrying forward a proud tradition of dedicated service that has continued over more than 120 years.

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