Redeia Corporacion SA RED

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€16.34 +0.14 (0.86%)

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As of Jul 5, 2024 3:35pm Delayed Price Closed

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Company Report

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European Utilities Edged Up in Q2 on Soaring Power Prices, High Interest Rates Still a Drag

Tancrede Fulop Jun 13, 2024

Utilities have reversed part of their first quarter’s fall, thanks to a strong rebound in power prices. Moreover, the deep undervaluation of renewables developers has driven takeovers by big investment firms at very high multiples. Neoen’s main shareholders accepted an offer at 18 times the EBITDA. The sector is still significantly lagging the market in 2024 because of high interest rates. Should they fall, it would boost the sector.

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Price vs Fair Value

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RED is trading within a range we consider fairly valued.

Price

€16.34

Jul 5, 2024

Fair Value

€16.20

Mar 28, 2022

Uncertainty

Low

1-Star Price: €69.26
5-Star Price: €65.50
Economic Moat: Hblk
Capital Allocation: Tsrtzryj

Bulls Say, Bears Say

Bulls

Investment opportunities in Spain are significant in the 2020s, which should boost earnings.

Bears

The increasing weight of liberalized activities reduces earnings visibility.

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Trading Information

Previous Close Price: €16.20
Day Range: €16.11–16.34
52-Week Range: €14.36–17.53
Bid/Ask: — / —
Market Cap: €8.82 Bil
Volume/Avg: 1.0 Mil / 1.3 Mil

Key Statistics

Price/Earnings (Normalized): 13.83
Price/Sales: 4.42
Dividend Yield (Trailing): 6.12%
Dividend Yield (Forward): 6.12%
Total Yield: 6.12%

Company Profile

Redeia owns and operates the Spanish electric transmission system. The company has acquired almost all of the nation's power grid, which other owners were forced to sell to it by government decree. Its activities are regulated by the National Energy Commission, which answers to the Spanish legislature. Redeia also operates a small fibre-optics network in Spain and has a growing Latin American infrastructure business. The group significantly increased its exposure to telecommunications by acquiring Spanish communications satellite operator Hispasat from Abertis in 2019.

Sector: Utilities
Industry: Utilities - Regulated Electric
Stock Style Box: Mid Core
Total Number of Employees: 2,468
Website: https://www.ree.es

Competitors

Valuation

Metric	RED	NGG	SSE
Price/Earnings (Normalized)	13.83	11.38	11.30
Price/Book Value	1.59	1.29	2.20
Price/Sales	4.42	1.94	1.94
Price/Cash Flow	7.03	7.03	7.12

Price/Earnings

RED

NGG

SSE

Financial Strength

Metric	RED	NGG	SSE
Quick Ratio	—	0.64	0.76
Current Ratio	1.41	0.91	1.10
Interest Coverage	7.03	2.63	8.21

Quick Ratio

RED

NGG

SSE

Profitability

Metric	RED	NGG	SSE
Return on Assets (Normalized)	4.51%	3.03%	6.37%
Return on Equity (Normalized)	12.37%	9.72%	20.08%
Return on Invested Capital (Normalized)	9.54%	5.36%	9.01%

Return on Assets

RED

NGG

SSE

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