Capitalcube gives NorthWestern Corp. a score of 63.
Our analysis is based on comparing NorthWestern Corp. with the following peers – MDU Resources Group, Inc., PG&E Corporation, Avista Corporation, NiSource Inc, PNM Resources, Inc., Exelon Corporation, IDACORP, Inc., CenterPoint Energy, Inc., Black Hills Corporation and Xcel Energy Inc. (MDU-US, PCG-US, AVA-US, NI-US, PNM-US, EXC-US, IDA-US, CNP-US, BKH-US and XEL-US).
NorthWestern Corp. has a fundamental score of 63 and has a relative valuation of NEUTRAL.
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- From a peer analysis angle, relative underperformance over the last year has improved more recently.
- It’s current Price/Book of 1.67 is about median in its peer group.
- The market expects NWE-US to grow at about the same rate as the peers and to maintain the median returns it currently generates.
- NWE-US has relatively high profit margins while operating with median asset turns.
- Changes in annual revenues (relative to peers) are better than the change in its earnings (relative to peers), implying the company is focused more on revenues.
- Over the last five years, NWE-US‘s return on assets has declined from above median to about median among its peers, indicating declining relative operating performance.
- The company’s relatively high gross margin suggests some differentiation with pricing advantages versus peers.
- While NWE-US‘s revenues in recent years have grown faster than the peer median, the market gives the stock a P/E ratio that is around peer median suggesting that the market has some questions about the company’s long-term strategy.
- The company is likely overinvesting in a business with only median returns.
- NWE-US seems to be constrained by the current level of debt.
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Leverage & Liquidity
NWE-US is debt-constrained.
- With debt at a relatively high 43.63% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 43.63%), and interest coverage level of 2.73x, NWE-US seems debt-constrained.
- All 10 peers for the company have an outstanding debt balance.
NWE-US has maintained its relatively high leverage profile from the recent year-end.
- NWE-US‘s interest coverage is similar to its five-year average interest coverage of 2.41x.
- Compared to 2016, interest coverage has remained relatively stable for both the company (2.73x) and the peer median (3.03x).
- NWE-US‘s debt-EV is similar to its five-year average debt-EV of 43.85%.
- Like the interest coverage trend, debt-EV has remained relatively stable for both the company (43.63%) and the peer median (43.63%).
Access the detailed analysis for NorthWestern Corp.
Key Liquidity Items
|Company||Debt/Enterprise Value (%)||Current Ratio||Interest Coverage (x)||Cash Flow To Total Debt (%)|
|MDU Resources Group, Inc.||24.26||1.28||4.95||28.61|
|PNM Resources, Inc.||45.56||0.53||2.58||18.47|
|CenterPoint Energy, Inc.||48.22||0.91||2.29||21.27|
|Black Hills Corporation||49.55||0.69||3.03||15.3|
|Xcel Energy Inc.||39.29||0.87||3.4||22.06|
|Best In Class||24.26||2.03||4.95||35.48|
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NorthWestern Corp. engages in generating and distributing electricity and natural gas. It operates through the following segments: Electric Operations, Natural Gas Operations, and All Other. The Electric Operations segment includes generation, transmission, and distribution of electric utility business as a vertically integrated generation transmission and distribution utility in Montana and South Dakota. The Natural Gas Operations segment includes the production, storage, transmission, and distribution of natural gas. The All Other segment consists of unallocated corporate costs. The company was founded in November 1923 and is headquartered in Sioux Falls, SD.
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