Intrinsic value of Avangrid - AGR

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$45.59

  Intrinsic Value

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  Value-price divergence*

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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of AGR stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 14.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  37.81
  29.30
  26.87
  24.68
  22.71
  20.94
  19.35
  17.91
  16.62
  15.46
  14.41
  13.47
  12.63
  11.86
  11.18
  10.56
  10.00
  9.50
  9.05
  8.65
  8.28
  7.95
  7.66
  7.39
  7.15
  6.94
  6.74
  6.57
  6.41
  6.27
  6.14
Revenue, $m
  6,061
  7,781
  9,872
  12,309
  15,105
  18,268
  21,803
  25,709
  29,982
  34,617
  39,607
  44,944
  50,618
  56,623
  62,951
  69,598
  76,560
  83,836
  91,425
  99,331
  107,558
  116,114
  125,007
  134,248
  143,852
  153,833
  164,208
  174,997
  186,219
  197,898
  210,058
Variable operating expenses, $m
 
  4,484
  5,605
  6,911
  8,410
  10,106
  12,001
  14,095
  16,385
  18,870
  21,545
  24,094
  27,136
  30,355
  33,748
  37,311
  41,043
  44,943
  49,012
  53,250
  57,661
  62,247
  67,015
  71,969
  77,117
  82,468
  88,030
  93,814
  99,830
  106,091
  112,610
Fixed operating expenses, $m
 
  1,353
  1,387
  1,421
  1,457
  1,493
  1,531
  1,569
  1,608
  1,648
  1,690
  1,732
  1,775
  1,820
  1,865
  1,912
  1,960
  2,009
  2,059
  2,110
  2,163
  2,217
  2,272
  2,329
  2,388
  2,447
  2,508
  2,571
  2,635
  2,701
  2,769
Total operating expenses, $m
  4,824
  5,837
  6,992
  8,332
  9,867
  11,599
  13,532
  15,664
  17,993
  20,518
  23,235
  25,826
  28,911
  32,175
  35,613
  39,223
  43,003
  46,952
  51,071
  55,360
  59,824
  64,464
  69,287
  74,298
  79,505
  84,915
  90,538
  96,385
  102,465
  108,792
  115,379
Operating income, $m
  1,194
  1,944
  2,881
  3,976
  5,238
  6,669
  8,271
  10,045
  11,988
  14,098
  16,372
  19,118
  21,707
  24,448
  27,339
  30,376
  33,558
  36,884
  40,354
  43,970
  47,734
  51,649
  55,719
  59,950
  64,347
  68,918
  73,670
  78,612
  83,754
  89,106
  94,680
EBITDA, $m
  1,998
  2,257
  3,193
  4,289
  5,550
  6,981
  8,584
  10,357
  12,301
  14,411
  16,685
  19,118
  21,707
  24,448
  27,339
  30,376
  33,558
  36,884
  40,354
  43,970
  47,734
  51,649
  55,719
  59,950
  64,347
  68,918
  73,670
  78,612
  83,754
  89,106
  94,680
Interest expense (income), $m
  229
  158
  324
  521
  751
  1,014
  1,313
  1,646
  2,014
  2,417
  2,853
  3,324
  3,827
  4,361
  4,927
  5,524
  6,150
  6,806
  7,492
  8,207
  8,952
  9,728
  10,534
  11,372
  12,243
  13,148
  14,089
  15,067
  16,083
  17,141
  18,242
Earnings before tax, $m
  1,009
  1,787
  2,556
  3,455
  4,487
  5,655
  6,959
  8,399
  9,975
  11,682
  13,519
  15,794
  17,880
  20,087
  22,411
  24,852
  27,408
  30,078
  32,862
  35,763
  38,782
  41,922
  45,185
  48,578
  52,104
  55,769
  59,581
  63,545
  67,670
  71,965
  76,438
Tax expense, $m
  379
  482
  690
  933
  1,211
  1,527
  1,879
  2,268
  2,693
  3,154
  3,650
  4,264
  4,828
  5,423
  6,051
  6,710
  7,400
  8,121
  8,873
  9,656
  10,471
  11,319
  12,200
  13,116
  14,068
  15,058
  16,087
  17,157
  18,271
  19,431
  20,638
Net income, $m
  630
  1,304
  1,866
  2,522
  3,275
  4,128
  5,080
  6,132
  7,281
  8,528
  9,869
  11,530
  13,053
  14,663
  16,360
  18,142
  20,007
  21,957
  23,990
  26,107
  28,311
  30,603
  32,985
  35,462
  38,036
  40,712
  43,494
  46,388
  49,399
  52,534
  55,800

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  91
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  31,309
  40,527
  51,417
  64,109
  78,671
  95,147
  113,557
  133,899
  156,157
  180,299
  206,288
  234,081
  263,635
  294,910
  327,871
  362,491
  398,752
  436,645
  476,172
  517,348
  560,198
  604,758
  651,076
  699,210
  749,229
  801,213
  855,251
  911,441
  969,892
  1,030,721
  1,094,054
Adjusted assets (=assets-cash), $m
  31,218
  40,527
  51,417
  64,109
  78,671
  95,147
  113,557
  133,899
  156,157
  180,299
  206,288
  234,081
  263,635
  294,910
  327,871
  362,491
  398,752
  436,645
  476,172
  517,348
  560,198
  604,758
  651,076
  699,210
  749,229
  801,213
  855,251
  911,441
  969,892
  1,030,721
  1,094,054
Revenue / Adjusted assets
  0.194
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
  0.192
Average production assets, $m
  -4,728
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Working capital, $m
  -460
  -591
  -750
  -935
  -1,148
  -1,388
  -1,657
  -1,954
  -2,279
  -2,631
  -3,010
  -3,416
  -3,847
  -4,303
  -4,784
  -5,289
  -5,819
  -6,372
  -6,948
  -7,549
  -8,174
  -8,825
  -9,500
  -10,203
  -10,933
  -11,691
  -12,480
  -13,300
  -14,153
  -15,040
  -15,964
Total debt, $m
  5,010
  9,263
  14,893
  21,454
  28,983
  37,501
  47,019
  57,536
  69,043
  81,525
  94,961
  109,330
  124,609
  140,778
  157,819
  175,718
  194,465
  214,055
  234,491
  255,779
  277,932
  300,970
  324,916
  349,801
  375,661
  402,537
  430,475
  459,525
  489,744
  521,193
  553,936
Total liabilities, $m
  16,200
  20,953
  26,583
  33,144
  40,673
  49,191
  58,709
  69,226
  80,733
  93,215
  106,651
  121,020
  136,299
  152,468
  169,509
  187,408
  206,155
  225,745
  246,181
  267,469
  289,622
  312,660
  336,606
  361,491
  387,351
  414,227
  442,165
  471,215
  501,434
  532,883
  565,626
Total equity, $m
  15,109
  19,575
  24,835
  30,964
  37,998
  45,956
  54,848
  64,673
  75,424
  87,084
  99,637
  113,061
  127,336
  142,442
  158,362
  175,083
  192,597
  210,899
  229,991
  249,879
  270,576
  292,098
  314,470
  337,718
  361,878
  386,986
  413,086
  440,226
  468,458
  497,838
  528,428
Total liabilities and equity, $m
  31,309
  40,528
  51,418
  64,108
  78,671
  95,147
  113,557
  133,899
  156,157
  180,299
  206,288
  234,081
  263,635
  294,910
  327,871
  362,491
  398,752
  436,644
  476,172
  517,348
  560,198
  604,758
  651,076
  699,209
  749,229
  801,213
  855,251
  911,441
  969,892
  1,030,721
  1,094,054
Debt-to-equity ratio
  0.332
  0.470
  0.600
  0.690
  0.760
  0.820
  0.860
  0.890
  0.920
  0.940
  0.950
  0.970
  0.980
  0.990
  1.000
  1.000
  1.010
  1.010
  1.020
  1.020
  1.030
  1.030
  1.030
  1.040
  1.040
  1.040
  1.040
  1.040
  1.050
  1.050
  1.050
Adjusted equity ratio
  0.484
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  630
  1,304
  1,866
  2,522
  3,275
  4,128
  5,080
  6,132
  7,281
  8,528
  9,869
  11,530
  13,053
  14,663
  16,360
  18,142
  20,007
  21,957
  23,990
  26,107
  28,311
  30,603
  32,985
  35,462
  38,036
  40,712
  43,494
  46,388
  49,399
  52,534
  55,800
Depreciation, amort., depletion, $m
  804
  312
  312
  312
  312
  312
  312
  312
  312
  312
  312
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Funds from operations, $m
  1,209
  1,617
  2,179
  2,835
  3,588
  4,440
  5,392
  6,444
  7,594
  8,840
  10,181
  11,530
  13,053
  14,663
  16,360
  18,142
  20,007
  21,957
  23,990
  26,107
  28,311
  30,603
  32,985
  35,462
  38,036
  40,712
  43,494
  46,388
  49,399
  52,534
  55,800
Change in working capital, $m
  -352
  -134
  -159
  -185
  -212
  -240
  -269
  -297
  -325
  -352
  -379
  -406
  -431
  -456
  -481
  -505
  -529
  -553
  -577
  -601
  -625
  -650
  -676
  -702
  -730
  -759
  -789
  -820
  -853
  -888
  -924
Cash from operations, $m
  1,561
  3,990
  2,337
  3,020
  3,800
  4,681
  5,661
  6,741
  7,919
  9,193
  10,560
  11,935
  13,484
  15,120
  16,841
  18,647
  20,537
  22,510
  24,566
  26,708
  28,936
  31,253
  33,661
  36,164
  38,766
  41,470
  44,282
  47,208
  50,252
  53,422
  56,724
Maintenance CAPEX, $m
  0
  224
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
New CAPEX, $m
  -1,707
  -2,239
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from investing activities, $m
  -1,527
  -2,015
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Free cash flow, $m
  34
  1,975
  2,337
  3,020
  3,800
  4,681
  5,661
  6,741
  7,919
  9,193
  10,560
  11,935
  13,484
  15,120
  16,841
  18,647
  20,537
  22,510
  24,566
  26,708
  28,936
  31,253
  33,661
  36,164
  38,766
  41,470
  44,282
  47,208
  50,252
  53,422
  56,724
Issuance/(repayment) of debt, $m
  124
  4,753
  5,630
  6,561
  7,529
  8,518
  9,518
  10,517
  11,507
  12,482
  13,436
  14,369
  15,279
  16,169
  17,041
  17,899
  18,747
  19,591
  20,436
  21,288
  22,153
  23,037
  23,946
  24,885
  25,860
  26,876
  27,938
  29,050
  30,219
  31,449
  32,743
Issuance/(repurchase) of shares, $m
  -7
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  29
  4,753
  5,630
  6,561
  7,529
  8,518
  9,518
  10,517
  11,507
  12,482
  13,436
  14,369
  15,279
  16,169
  17,041
  17,899
  18,747
  19,591
  20,436
  21,288
  22,153
  23,037
  23,946
  24,885
  25,860
  26,876
  27,938
  29,050
  30,219
  31,449
  32,743
Total cash flow (excl. dividends), $m
  63
  6,727
  7,967
  9,581
  11,329
  13,199
  15,179
  17,258
  19,426
  21,674
  23,997
  26,304
  28,763
  31,289
  33,882
  36,546
  39,283
  42,100
  45,002
  47,996
  51,090
  54,291
  57,608
  61,049
  64,626
  68,346
  72,220
  76,258
  80,472
  84,871
  89,467
Retained Cash Flow (-), $m
  -56
  -4,466
  -5,260
  -6,130
  -7,033
  -7,958
  -8,892
  -9,825
  -10,750
  -11,661
  -12,553
  -13,424
  -14,275
  -15,106
  -15,920
  -16,722
  -17,514
  -18,302
  -19,092
  -19,888
  -20,696
  -21,522
  -22,371
  -23,249
  -24,159
  -25,108
  -26,100
  -27,140
  -28,232
  -29,380
  -30,590
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  2,261
  2,708
  3,451
  4,295
  5,241
  6,287
  7,432
  8,675
  10,013
  11,444
  12,880
  14,489
  16,183
  17,962
  19,824
  21,769
  23,798
  25,910
  28,108
  30,393
  32,768
  35,236
  37,801
  40,466
  43,238
  46,120
  49,118
  52,240
  55,490
  58,877
Discount rate, %
 
  5.30
  5.57
  5.84
  6.14
  6.44
  6.76
  7.10
  7.46
  7.83
  8.22
  8.63
  9.06
  9.52
  9.99
  10.49
  11.02
  11.57
  12.15
  12.76
  13.39
  14.06
  14.77
  15.50
  16.28
  17.09
  17.95
  18.85
  19.79
  20.78
  21.82
PV of cash for distribution, $m
 
  2,148
  2,430
  2,911
  3,385
  3,836
  4,245
  4,598
  4,880
  5,080
  5,193
  5,180
  5,115
  4,963
  4,734
  4,437
  4,088
  3,701
  3,290
  2,872
  2,461
  2,068
  1,703
  1,373
  1,084
  837
  631
  464
  333
  233
  158
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Avangrid, Inc. operates as an energy services holding company in the United States. It engages in the generation, transmission, and distribution of electricity, as well as distribution, transportation, and sale of natural gas. As of December 31, 2015, the company delivered electricity to approximately 2.2 million electric utility customers, as well as natural gas to approximately 984,000 natural gas public utility customers; and owned approximately 67.5 billion cubic feet of net working gas storage capacity. It also develops, constructs, and operates renewable energy generation facilities primarily using onshore wind power, as well as solar, biomass, and thermal power. The company delivers natural gas and electricity to residential, commercial, and institutional customers through its regulated utilities in New York, Maine, Connecticut, and Massachusetts; and sells its output to investor-owned utilities, public utilities, and other credit-worthy entities. It also generates and provides power and other services to federal and state agencies, as well as institutional retail and joint action agencies; and delivers thermal output to wholesale customers in the Western United States. The company was formerly known as Iberdrola USA, Inc. Avangrid, Inc. was founded in 1852 and is headquartered in New Gloucester, Maine. Avangrid, Inc. operates as a subsidiary of Iberdrola, S.A.

FINANCIAL RATIOS  of  Avangrid (AGR)

Valuation Ratios
P/E Ratio 22.4
Price to Sales 2.3
Price to Book 0.9
Price to Tangible Book
Price to Cash Flow 9
Price to Free Cash Flow -96.5
Growth Rates
Sales Growth Rate 37.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 57.8%
Cap. Spend. - 3 Yr. Gr. Rate 12.6%
Financial Strength
Quick Ratio 0
Current Ratio 0.2
LT Debt to Equity 29.8%
Total Debt to Equity 33.2%
Interest Coverage 5
Management Effectiveness
Return On Assets 2.5%
Ret/ On Assets - 3 Yr. Avg. 2%
Return On Total Capital 3.1%
Ret/ On T. Cap. - 3 Yr. Avg. 2.5%
Return On Equity 4.2%
Return On Equity - 3 Yr. Avg. 3.2%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 33.9%
EBITDA Margin - 3 Yr. Avg. 30.6%
Operating Margin 19.8%
Oper. Margin - 3 Yr. Avg. 17%
Pre-Tax Margin 16.8%
Pre-Tax Margin - 3 Yr. Avg. 13%
Net Profit Margin 10.5%
Net Profit Margin - 3 Yr. Avg. 8.6%
Effective Tax Rate 37.6%
Eff/ Tax Rate - 3 Yr. Avg. 29.6%
Payout Ratio 63.7%

AGR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AGR stock intrinsic value calculation we used $6018 million for the last fiscal year's total revenue generated by Avangrid. The default revenue input number comes from 2016 income statement of Avangrid. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our AGR stock valuation model: a) initial revenue growth rate of 29.3% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 5.3%, whose default value for AGR is calculated based on our internal credit rating of Avangrid, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Avangrid.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of AGR stock the variable cost ratio is equal to 58.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1320 million in the base year in the intrinsic value calculation for AGR stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Avangrid.

Corporate tax rate of 27% is the nominal tax rate for Avangrid. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the AGR stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for AGR are equal to 0%.

Life of production assets of 10 years is the average useful life of capital assets used in Avangrid operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for AGR is equal to -7.6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $15109 million for Avangrid - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 311.67 million for Avangrid is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Avangrid at the current share price and the inputted number of shares is $14.2 billion.


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COMPANY NEWS

▶ ETFs with exposure to Avangrid, Inc. : June 22, 2017   [Jun-22-17 03:16PM  Capital Cube]
▶ Apples Oregon wind farm eyes bigger, and fewer, turbines   [May-21-17 06:46PM  American City Business Journals]
▶ Avangrid CEO: Offshore in North Carolina coming 'well beyond 2020'   [Apr-25-17 12:55PM  American City Business Journals]
▶ Avangrid Renewables Leadership Change   [10:40AM  Business Wire]
▶ Avangrid beats 1Q profit forecasts   [07:10AM  Associated Press]
▶ Avangrid Declares Quarterly Dividend   [Apr-20-17 01:50PM  Business Wire]
▶ ETFs with exposure to Avangrid, Inc. : April 7, 2017   [Apr-07-17 03:43PM  Capital Cube]
▶ Details on Oregon-based energy company's 100-plus workers needed for NM wind farm   [Apr-05-17 04:55PM  American City Business Journals]
▶ Big wind development returning to Oregon with a mystery power buyer   [11:46AM  American City Business Journals]
▶ Avangrid Looks Vulnerable to Further Weakness   [Mar-09-17 03:15PM  TheStreet.com]
▶ Avangrid: Cramer's Top Takeaways   [06:22AM  TheStreet.com]
▶ AVANGRID Declares Quarterly Dividend   [Feb-16-17 01:38PM  Business Wire]
▶ AVANGRID Schedules 2017 Financial Update   [Feb-08-17 02:27PM  Business Wire]
▶ Hedge Funds Are Crazy About Avangrid Inc (AGR)   [Dec-14-16 02:19PM  at Insider Monkey]
▶ AVANGRID Declares Quarterly Dividend   [07:33AM  Business Wire]
▶ Billionaire David Einhorns Top Dividend Stocks   [Sep-15-16 12:31PM  at Insider Monkey]
Stock chart of AGR Financial statements of AGR Annual reports of AGR
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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