Eversource Energy (ES) Financial Statements

Eversource Energy's financial quality is defined by stable core profitability but challenged by significant capital demands. The company's operating margin of 22.1% and profit margin of 12.5% indicate a profitable core utility operation. However, a deeper look reveals material weaknesses against the GoodMoat Quality Indicators. Most critically, the free cash flow yield is negative at -0.2%, indicating the company is not generating surplus cash after capital expenditures. This is a 'Weak' rating against the framework's standard for positive, growing FCF with a margin above 10-15%. The balance sheet also raises caution, with a Debt/Equity ratio of 1.86, which is high and exceeds the framework's favourable threshold of Debt/EBITDA below 1.0x. This suggests a leveraged financial structure. On growth, the 13.4% YoY revenue increase is positive but is typical for a regulated utility and is likely driven by rate base investments rather than high-growth moat advantages. The ROE of 10.4% falls below the framework's high-quality benchmark of 15-20%. For a value investor, the combination of negative free cash flow and high leverage is a notable offset to the company's stable margins and dividend profile, placing several key quality metrics in an unfavourable light. Analysis based on data as of 2024-05-15.