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A Comprehensive Analysis of Its Market Value

by Clarence Jones

Enel Chile SA (NYSE:ENIC) has recently seen a daily gain of 4.76% and a three-month gain of 1.08%. With an Earnings Per Share (EPS) of 1.11, investors are wondering if the stock is fairly valued. In order to answer this question, a valuation analysis is necessary.

Enel Chile SA is an electricity utility company in Chile that engages in the generation, transmission, and distribution of electricity. It operates through two segments: Generation Business and Distribution and Network Business. The Generation Business segment consists of electricity companies that own generating plants, while the Distribution and Network segment comprises electricity companies operating under a public utility concession. The stock is currently trading at $3.3 per share, with a market cap of $4.60 billion.

The GF Value, which is a proprietary estimate of fair value, is $3.57 for Enel Chile SA. This indicates that the stock appears to be fairly valued. The GF Value is calculated based on historical multiples, a GuruFocus adjustment factor, and future business performance estimates. The analysis shows that the stock is fairly valued, and the long-term return is likely to be close to the rate of business growth.

Before investing, it is important to assess a company’s financial strength. Enel Chile SA has a cash-to-debt ratio of 9999, which is worse than 0% of companies in the Utilities – Regulated industry. Its overall financial strength is rated as 6 out of 10, indicating fair financial health.

Profitability and growth are also important factors to consider. Enel Chile SA has been profitable for 9 out of the past 10 years, with revenues of $5.30 billion and an EPS of $1.11 in the past 12 months. Its operating margin of 21.67% is better than 75.2% of companies in the Utilities – Regulated industry. The company’s 3-year average annual revenue growth rate is 18.6%, ranking better than 82.82% of companies in the same industry. Furthermore, the 3-year average EBITDA growth rate is 43.3%, ranking better than 94.99% of companies in the industry.

Comparing a company’s Return on Invested Capital (ROIC) to its Weighted Average Cost of Capital (WACC) is another way to evaluate profitability. Enel Chile SA’s ROIC over the past 12 months was 6.57, while its WACC came in at 7.18. This suggests that the company is creating value for shareholders.

In conclusion, the stock of Enel Chile SA appears to be fairly valued. The company’s financial condition is fair, profitability is fair, and its growth ranks better than a significant portion of companies in the Utilities – Regulated industry. Investors interested in learning more about Enel Chile SA should check out its 30-Year Financials.

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