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Veolia Environnement SA VIE

Rating as of

Morningstar’s Analysis

Valuation
Currency in EUR
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

European Utilities' Sell-Off Offers Opportunities in Renewables and Cyclical Stocks

Tancrede Fulop, CFA Equity Analyst

Analyst Note

| Tancrede Fulop, CFA |

After four years of outperformance against the Morningstar DM Europe Index, the Morningstar DM Europe Utilities is down by 9% year to date, underperforming the former by 13%. This is driven by market jitters about rising interest rates, escalating competition in the renewables space, and sector rotation from COVID-19 winners to losers, especially the Integrated Oils. The Morningstar DM Europe Energy index is up by 16% year to date after falling 33% in 2020. We believe the European Utilities' sell-off is overdone and offers opportunities. We view the sector as undervalued by 6% on average with a 4.5% average dividend yield--six names out of 17 are in 4-star territory. 

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Company Profile

Business Description

Veolia is the largest water company globally and a leading player in France. It is also involved in waste management with a significant exposure to France, the United Kingdom, Germany, the United States, and Australia. The third pillar of the group is energy services, giving the group significant exposure to Central Europe. Veolia started to refocus its activities in 2011, leading to the exit of almost half of its countries and of its transport activity, which should be completed within the next few years.

Contact
30, rue Madeleine Vionnet
Aubervilliers, 93300, France
T +33 185577000
Sector Industrials
Industry Waste Management
Most Recent Earnings Dec 31, 2008
Fiscal Year End Dec 31, 2019
Stock Type
Employees 181,514