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Meridian Energy Ltd MEL

Morningstar Rating
NZD 6.25 +0.04 (0.64%)
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Company Report

Meridian to Focus on Decarbonizing New Zealand

Meridian Energy is a vertically integrated renewable energy company involved in the generation and retailing of electricity. Nearly 90% of its electricity is generated from low-cost hydro power plants, with wind making up the rest. While the significant hydro capacity is a source of competitive advantage and high returns for Meridian, it also increases the firm's risk during dry conditions when rainfall or snow melt is below average, resulting in substantially lower hydro production.

Price vs Fair Value

MEL is trading at a 746% premium.
Price
NZD 6.25
Fair Value
NZD 6.80
Uncertainty
Medium
1-Star Price
NZD 1.29
5-Star Price
NZD 4.43
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Meridian is a low-cost provider of electricity with high-quality hydroelectric schemes.

Bears

Electricity prices are likely to fall to long-term averages sooner or later, a future headwind to earnings.

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News

Trading Information

Previous Close Price
NZD 6.21
Day Range
NZD 6.166.27
52-Week Range
NZD 4.766.76
Bid/Ask
NZD 6.16 / NZD 6.27
Market Cap
NZD 16.17 Bil
Volume/Avg
580,190 / 1.3 Mil

Key Statistics

Price/Earnings (Normalized)
53.64
Price/Sales
4.27
Dividend Yield (Trailing)
2.89%
Dividend Yield (Forward)
2.89%
Total Yield
2.89%

Company Profile

Meridian Energy is one of New Zealand’s leading utilities. It is the largest electricity producer in the nation, with a third of the market, and the fourth-largest energy retailer, with about 15% of the market by customer numbers. It generates 100% renewable electricity, mainly from large hydroelectric schemes in the South Island. It also owns a geographically diversified portfolio of wind farms.
Sector
Utilities
Industry
Utilities - Renewable
Stock Style Box
Large Core
Total Number of Employees
959

Competitors

Valuation

Metric
MEL
CEN
GNE
Price/Earnings (Normalized)
53.6423.7516.58
Price/Book Value
2.742.680.93
Price/Sales
4.272.970.88
Price/Cash Flow
29.5313.506.93
Price/Earnings
MEL
CEN
GNE

Financial Strength

Metric
MEL
CEN
GNE
Quick Ratio
0.670.610.60
Current Ratio
0.940.861.15
Interest Coverage
1.756.271.48
Quick Ratio
MEL
CEN
GNE

Profitability

Metric
MEL
CEN
GNE
Return on Assets (Normalized)
0.79%4.95%1.69%
Return on Equity (Normalized)
1.34%10.49%3.51%
Return on Invested Capital (Normalized)
1.00%5.26%2.27%
Return on Assets
MEL
CEN
GNE
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