Based on strong first-quarter performance, management has raised its 2024 financial targets for adjusted EBITDA, adjusted net profit, investments, and tariff RAB. Management has made no changes to its long-term strategic plan or estimates. We will factor these results into our model but do not expect a material change to our EUR 4.70 fair value estimate for no-moat Snam. The shares appear undervalued.
Snam has high earnings and dividend visibility as its main businesses earn regulated returns.
Investments in the energy transition do not strengthen the company’s moat, especially in biomethane and carbon capture and storage.
|
Metric
|
SRG
|
PPL
|
ED
|
|---|---|---|---|
Price/Earnings (Normalized) | 13.14 | 19.99 | 19.90 |
Price/Book Value | 1.99 | 1.55 | 1.55 |
Price/Sales | 3.54 | 2.66 | 2.32 |
Price/Cash Flow | 6.45 | 10.77 | 7.85 |
|
Metric
|
SRG
|
PPL
|
ED
|
|---|---|---|---|
Quick Ratio | — | 0.81 | 0.77 |
Current Ratio | 0.13 | 1.28 | 1.01 |
Interest Coverage | 7.13 | 2.35 | 3.94 |
|
Metric
|
SRG
|
PPL
|
ED
|
|---|---|---|---|
Return on Assets (Normalized) | 3.27% | 3.18% | 2.78% |
Return on Equity (Normalized) | 10.19% | 8.81% | 8.52% |
Return on Invested Capital (Normalized) | 4.30% | 6.02% | 5.87% |
|
Ticker
|
Name
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
|---|---|---|---|---|---|
GASNY
| Naturgy Energy Group SA ADR | — | Ffybn | $26.4 Bil | |
GASNF
| Naturgy Energy Group SA | — | Vlynl | $26.2 Bil | |
ATO
| Atmos Energy Corp | Ctvtfhlxm | Vdwlc | $17.9 Bil | |
SNMRF
| Snam SpA | — | Zmmhtl | $16.5 Bil | |
SNMRY
| Snam SpA ADR | — | Tdxnxm | $16.5 Bil | |
GAILF
| GAIL (India) Ltd DR | — | Vbwy | $16.1 Bil | |
HOKCY
| Hong Kong and China Gas Co Ltd ADR | — | Yyhjbr | $15.5 Bil | |
NI
| NiSource Inc | Txtgssnt | Hxfmcj | $13.1 Bil | |
NFE
| New Fortress Energy Inc Class A | Nvsbqkxn | Mnwh | $5.5 Bil | |
NJR
| New Jersey Resources Corp | Mhhwymzrf | Rkdrq | $4.4 Bil |
