Intrinsic value of Consolidated Edison - ED

Previous Close

$78.05

  Intrinsic Value

$17.31

stock screener

  Rating & Target

str. sell

-78%

Previous close

$78.05

 
Intrinsic value

$17.31

 
Up/down potential

-78%

 
Rating

str. sell

We calculate the intrinsic value of ED 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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

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, %
  -3.82
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  10,984
  12,274
  12,556
  12,879
  13,241
  13,642
  14,083
  14,562
  15,082
  15,641
  16,241
  16,883
  17,569
  18,298
  19,073
  19,896
  20,768
  21,691
  22,667
  23,698
  24,787
  25,936
  27,148
  28,425
  29,771
  31,188
  32,680
  34,251
  35,904
  37,643
  39,472
Variable operating expenses, $m
 
  9,756
  9,980
  10,235
  10,521
  10,838
  11,186
  11,565
  11,976
  12,418
  12,892
  13,344
  13,885
  14,462
  15,075
  15,725
  16,414
  17,144
  17,915
  18,730
  19,591
  20,499
  21,457
  22,466
  23,530
  24,650
  25,829
  27,070
  28,377
  29,751
  31,197
Fixed operating expenses, $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
Total operating expenses, $m
  9,500
  9,756
  9,980
  10,235
  10,521
  10,838
  11,186
  11,565
  11,976
  12,418
  12,892
  13,344
  13,885
  14,462
  15,075
  15,725
  16,414
  17,144
  17,915
  18,730
  19,591
  20,499
  21,457
  22,466
  23,530
  24,650
  25,829
  27,070
  28,377
  29,751
  31,197
Operating income, $m
  2,575
  2,517
  2,576
  2,644
  2,720
  2,804
  2,896
  2,997
  3,106
  3,223
  3,349
  3,540
  3,683
  3,836
  3,999
  4,171
  4,354
  4,547
  4,752
  4,968
  5,197
  5,437
  5,691
  5,959
  6,241
  6,538
  6,851
  7,181
  7,527
  7,892
  8,275
EBITDA, $m
  3,791
  6,344
  6,489
  6,656
  6,844
  7,051
  7,279
  7,527
  7,795
  8,084
  8,394
  8,726
  9,080
  9,457
  9,858
  10,283
  10,734
  11,211
  11,715
  12,248
  12,811
  13,405
  14,031
  14,691
  15,387
  16,119
  16,891
  17,703
  18,557
  19,455
  20,401
Interest expense (income), $m
  664
  897
  793
  848
  910
  981
  1,059
  1,144
  1,238
  1,339
  1,447
  1,564
  1,689
  1,822
  1,964
  2,115
  2,275
  2,444
  2,624
  2,813
  3,014
  3,225
  3,449
  3,684
  3,933
  4,194
  4,470
  4,760
  5,065
  5,386
  5,725
Earnings before tax, $m
  1,943
  1,620
  1,784
  1,796
  1,810
  1,823
  1,838
  1,853
  1,868
  1,885
  1,902
  1,975
  1,994
  2,014
  2,035
  2,056
  2,079
  2,103
  2,129
  2,155
  2,183
  2,212
  2,243
  2,275
  2,309
  2,344
  2,382
  2,421
  2,462
  2,505
  2,551
Tax expense, $m
  698
  438
  482
  485
  489
  492
  496
  500
  504
  509
  513
  533
  538
  544
  549
  555
  561
  568
  575
  582
  589
  597
  606
  614
  623
  633
  643
  654
  665
  676
  689
Net income, $m
  1,245
  1,183
  1,302
  1,311
  1,321
  1,331
  1,341
  1,352
  1,364
  1,376
  1,388
  1,442
  1,456
  1,470
  1,485
  1,501
  1,518
  1,535
  1,554
  1,573
  1,593
  1,615
  1,637
  1,661
  1,685
  1,711
  1,739
  1,767
  1,797
  1,829
  1,862

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  776
  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
  48,255
  49,095
  50,224
  51,515
  52,964
  54,569
  56,331
  58,250
  60,326
  62,564
  64,965
  67,533
  70,274
  73,192
  76,294
  79,585
  83,073
  86,764
  90,669
  94,794
  99,149
  103,745
  108,592
  113,701
  119,083
  124,753
  130,721
  137,004
  143,615
  150,571
  157,886
Adjusted assets (=assets-cash), $m
  47,479
  49,095
  50,224
  51,515
  52,964
  54,569
  56,331
  58,250
  60,326
  62,564
  64,965
  67,533
  70,274
  73,192
  76,294
  79,585
  83,073
  86,764
  90,669
  94,794
  99,149
  103,745
  108,592
  113,701
  119,083
  124,753
  130,721
  137,004
  143,615
  150,571
  157,886
Revenue / Adjusted assets
  0.231
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
Average production assets, $m
  2,776
  37,705
  38,572
  39,563
  40,676
  41,909
  43,262
  44,736
  46,331
  48,049
  49,893
  51,866
  53,971
  56,212
  58,594
  61,121
  63,800
  66,635
  69,633
  72,802
  76,147
  79,676
  83,399
  87,322
  91,456
  95,810
  100,394
  105,219
  110,297
  115,638
  121,257
Working capital, $m
  -437
  -970
  -992
  -1,017
  -1,046
  -1,078
  -1,113
  -1,150
  -1,191
  -1,236
  -1,283
  -1,334
  -1,388
  -1,446
  -1,507
  -1,572
  -1,641
  -1,714
  -1,791
  -1,872
  -1,958
  -2,049
  -2,145
  -2,246
  -2,352
  -2,464
  -2,582
  -2,706
  -2,836
  -2,974
  -3,118
Total debt, $m
  15,828
  14,681
  15,697
  16,859
  18,163
  19,608
  21,194
  22,921
  24,790
  26,803
  28,964
  31,276
  33,743
  36,369
  39,161
  42,122
  45,261
  48,584
  52,098
  55,810
  59,730
  63,867
  68,229
  72,827
  77,671
  82,773
  88,145
  93,800
  99,750
  106,010
  112,594
Total liabilities, $m
  33,957
  44,185
  45,201
  46,363
  47,667
  49,112
  50,698
  52,425
  54,294
  56,307
  58,468
  60,780
  63,247
  65,873
  68,665
  71,626
  74,765
  78,088
  81,602
  85,314
  89,234
  93,371
  97,733
  102,331
  107,175
  112,277
  117,649
  123,304
  129,254
  135,514
  142,098
Total equity, $m
  14,298
  4,909
  5,022
  5,151
  5,296
  5,457
  5,633
  5,825
  6,033
  6,256
  6,496
  6,753
  7,027
  7,319
  7,629
  7,958
  8,307
  8,676
  9,067
  9,479
  9,915
  10,375
  10,859
  11,370
  11,908
  12,475
  13,072
  13,700
  14,362
  15,057
  15,789
Total liabilities and equity, $m
  48,255
  49,094
  50,223
  51,514
  52,963
  54,569
  56,331
  58,250
  60,327
  62,563
  64,964
  67,533
  70,274
  73,192
  76,294
  79,584
  83,072
  86,764
  90,669
  94,793
  99,149
  103,746
  108,592
  113,701
  119,083
  124,752
  130,721
  137,004
  143,616
  150,571
  157,887
Debt-to-equity ratio
  1.107
  2.990
  3.130
  3.270
  3.430
  3.590
  3.760
  3.930
  4.110
  4.280
  4.460
  4.630
  4.800
  4.970
  5.130
  5.290
  5.450
  5.600
  5.750
  5.890
  6.020
  6.160
  6.280
  6.410
  6.520
  6.630
  6.740
  6.850
  6.950
  7.040
  7.130
Adjusted equity ratio
  0.301
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,245
  1,183
  1,302
  1,311
  1,321
  1,331
  1,341
  1,352
  1,364
  1,376
  1,388
  1,442
  1,456
  1,470
  1,485
  1,501
  1,518
  1,535
  1,554
  1,573
  1,593
  1,615
  1,637
  1,661
  1,685
  1,711
  1,739
  1,767
  1,797
  1,829
  1,862
Depreciation, amort., depletion, $m
  1,216
  3,826
  3,913
  4,012
  4,124
  4,247
  4,382
  4,529
  4,689
  4,861
  5,045
  5,187
  5,397
  5,621
  5,859
  6,112
  6,380
  6,664
  6,963
  7,280
  7,615
  7,968
  8,340
  8,732
  9,146
  9,581
  10,039
  10,522
  11,030
  11,564
  12,126
Funds from operations, $m
  3,862
  5,009
  5,215
  5,324
  5,445
  5,578
  5,724
  5,882
  6,053
  6,236
  6,433
  6,629
  6,853
  7,091
  7,345
  7,613
  7,898
  8,199
  8,517
  8,853
  9,208
  9,582
  9,977
  10,393
  10,831
  11,292
  11,778
  12,289
  12,827
  13,393
  13,988
Change in working capital, $m
  403
  -19
  -22
  -25
  -29
  -32
  -35
  -38
  -41
  -44
  -47
  -51
  -54
  -58
  -61
  -65
  -69
  -73
  -77
  -81
  -86
  -91
  -96
  -101
  -106
  -112
  -118
  -124
  -131
  -137
  -144
Cash from operations, $m
  3,459
  5,028
  5,237
  5,349
  5,473
  5,610
  5,758
  5,920
  6,094
  6,281
  6,481
  6,679
  6,907
  7,149
  7,406
  7,678
  7,967
  8,272
  8,594
  8,935
  9,294
  9,673
  10,073
  10,494
  10,937
  11,404
  11,896
  12,413
  12,957
  13,530
  14,132
Maintenance CAPEX, $m
  0
  -3,696
  -3,770
  -3,857
  -3,956
  -4,068
  -4,191
  -4,326
  -4,474
  -4,633
  -4,805
  -4,989
  -5,187
  -5,397
  -5,621
  -5,859
  -6,112
  -6,380
  -6,664
  -6,963
  -7,280
  -7,615
  -7,968
  -8,340
  -8,732
  -9,146
  -9,581
  -10,039
  -10,522
  -11,030
  -11,564
New CAPEX, $m
  -5,158
  -741
  -867
  -991
  -1,113
  -1,233
  -1,353
  -1,473
  -1,595
  -1,718
  -1,844
  -1,973
  -2,105
  -2,241
  -2,382
  -2,528
  -2,679
  -2,835
  -2,998
  -3,168
  -3,345
  -3,530
  -3,722
  -3,924
  -4,134
  -4,354
  -4,584
  -4,825
  -5,077
  -5,342
  -5,619
Cash from investing activities, $m
  -4,976
  -4,437
  -4,637
  -4,848
  -5,069
  -5,301
  -5,544
  -5,799
  -6,069
  -6,351
  -6,649
  -6,962
  -7,292
  -7,638
  -8,003
  -8,387
  -8,791
  -9,215
  -9,662
  -10,131
  -10,625
  -11,145
  -11,690
  -12,264
  -12,866
  -13,500
  -14,165
  -14,864
  -15,599
  -16,372
  -17,183
Free cash flow, $m
  -1,517
  591
  600
  501
  404
  309
  214
  120
  25
  -71
  -168
  -283
  -385
  -489
  -597
  -709
  -824
  -943
  -1,068
  -1,197
  -1,331
  -1,471
  -1,617
  -1,770
  -1,929
  -2,095
  -2,269
  -2,451
  -2,642
  -2,841
  -3,050
Issuance/(repayment) of debt, $m
  1,380
  -1,925
  1,016
  1,162
  1,304
  1,445
  1,586
  1,727
  1,869
  2,014
  2,161
  2,312
  2,467
  2,626
  2,791
  2,962
  3,139
  3,323
  3,514
  3,713
  3,920
  4,136
  4,362
  4,598
  4,844
  5,102
  5,372
  5,654
  5,950
  6,260
  6,584
Issuance/(repurchase) of shares, $m
  753
  1,726
  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  
  2,108
  -199
  1,016
  1,162
  1,304
  1,445
  1,586
  1,727
  1,869
  2,014
  2,161
  2,312
  2,467
  2,626
  2,791
  2,962
  3,139
  3,323
  3,514
  3,713
  3,920
  4,136
  4,362
  4,598
  4,844
  5,102
  5,372
  5,654
  5,950
  6,260
  6,584
Total cash flow (excl. dividends), $m
  591
  391
  1,616
  1,662
  1,708
  1,754
  1,800
  1,847
  1,894
  1,943
  1,993
  2,029
  2,082
  2,137
  2,194
  2,253
  2,315
  2,379
  2,446
  2,516
  2,589
  2,665
  2,745
  2,828
  2,916
  3,007
  3,103
  3,203
  3,308
  3,418
  3,534
Retained Cash Flow (-), $m
  -1,246
  -2,908
  -113
  -129
  -145
  -161
  -176
  -192
  -208
  -224
  -240
  -257
  -274
  -292
  -310
  -329
  -349
  -369
  -390
  -413
  -436
  -460
  -485
  -511
  -538
  -567
  -597
  -628
  -661
  -696
  -732
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
 
  -2,517
  1,503
  1,533
  1,563
  1,593
  1,624
  1,655
  1,687
  1,719
  1,753
  1,772
  1,808
  1,845
  1,884
  1,924
  1,966
  2,010
  2,056
  2,103
  2,153
  2,206
  2,260
  2,317
  2,377
  2,440
  2,506
  2,575
  2,647
  2,723
  2,802
Discount rate, %
 
  10.90
  11.45
  12.02
  12.62
  13.25
  13.91
  14.61
  15.34
  16.10
  16.91
  17.75
  18.64
  19.57
  20.55
  21.58
  22.66
  23.79
  24.98
  26.23
  27.54
  28.92
  30.37
  31.89
  33.48
  35.15
  36.91
  38.76
  40.69
  42.73
  44.87
PV of cash for distribution, $m
 
  -2,270
  1,210
  1,091
  972
  855
  743
  637
  539
  448
  367
  294
  232
  181
  138
  103
  75
  53
  37
  25
  17
  11
  7
  4
  2
  1
  1
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1

Consolidated Edison, Inc. (Con Edison) is a holding company. The Company operates through its subsidiaries, which include Consolidated Edison Company of New York, Inc. (CECONY), Orange and Rockland Utilities, Inc. (O&R), Con Edison Clean Energy Businesses, Inc. (the Clean Energy Businesses) and Con Edison Transmission, Inc. (Con Edison Transmission). CECONY's principal business operations are its regulated electric, gas and steam delivery businesses. CECONY provides electricity, natural gas and steam to customers in New York City and Westchester County. O&R's principal business operations are its regulated electric and gas delivery businesses. The Clean Energy Businesses develop, own and operate renewable and energy infrastructure projects and provide energy-related products and services to wholesale and retail customers. Con Edison Transmission, through its subsidiaries, invests in electric transmission facilities and gas pipeline and storage facilities.

FINANCIAL RATIOS  of  Consolidated Edison (ED)

Valuation Ratios
P/E Ratio 19.1
Price to Sales 2
Price to Book 1.7
Price to Tangible Book
Price to Cash Flow 6.9
Price to Free Cash Flow -14
Growth Rates
Sales Growth Rate -3.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 53.8%
Cap. Spend. - 3 Yr. Gr. Rate 13.7%
Financial Strength
Quick Ratio 1
Current Ratio 0.2
LT Debt to Equity 103.1%
Total Debt to Equity 110.7%
Interest Coverage 4
Management Effectiveness
Return On Assets 3.6%
Ret/ On Assets - 3 Yr. Avg. 3.5%
Return On Total Capital 4.3%
Ret/ On T. Cap. - 3 Yr. Avg. 4.4%
Return On Equity 9.1%
Return On Equity - 3 Yr. Avg. 9.1%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 31.7%
EBITDA Margin - 3 Yr. Avg. 28.4%
Operating Margin 21.3%
Oper. Margin - 3 Yr. Avg. 19.1%
Pre-Tax Margin 16.1%
Pre-Tax Margin - 3 Yr. Avg. 14.4%
Net Profit Margin 10.3%
Net Profit Margin - 3 Yr. Avg. 9.4%
Effective Tax Rate 35.9%
Eff/ Tax Rate - 3 Yr. Avg. 34.6%
Payout Ratio 61.3%

ED stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ED stock intrinsic value calculation we used $12033 million for the last fiscal year's total revenue generated by Consolidated Edison. The default revenue input number comes from 2016 income statement of Consolidated Edison. 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 ED stock valuation model: a) initial revenue growth rate of 2% 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 10.9%, whose default value for ED is calculated based on our internal credit rating of Consolidated Edison, 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 Consolidated Edison.
    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 ED stock the variable cost ratio is equal to 79.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for ED 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 5.4% for Consolidated Edison.

Corporate tax rate of 27% is the nominal tax rate for Consolidated Edison. 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 ED 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 ED are equal to 307.2%.

Life of production assets of 10 years is the average useful life of capital assets used in Consolidated Edison 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 ED is equal to -7.9%. 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 - $2001 million for Consolidated Edison - 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 307 million for Consolidated Edison 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 Consolidated Edison at the current share price and the inputted number of shares is $24.0 billion.

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COMPANY NEWS

▶ [$$] Steam-Pipe Blast in Flatiron Echoes Powerful 2007 Explosion   [Jul-19-18 08:27PM  The Wall Street Journal]
▶ Con Edison Declares Common Stock Dividend   [05:26PM  GlobeNewswire]
▶ Con Edison to Report 2nd Quarter 2018 Earnings on August 2   [Jul-16-18 04:30PM  GlobeNewswire]
▶ Top Stock Reports for Chevron, Glaxo & T-Mobile   [Jun-13-18 11:00AM  Zacks]
▶ Is the Bond Bear Market Back on?   [04:51AM  Investopedia]
▶ 20 2018 Losers That Will Be Big Winners   [May-25-18 02:05PM  InvestorPlace]
▶ Even With Rising Bond Yields, Dividend Stocks Reign Supreme   [May-22-18 09:04PM  InvestorPlace]
▶ 7 Stocks to Beat the Market's Wild Swings   [08:00AM  Investopedia]
▶ Con Ed: 1Q Earnings Snapshot   [May-03-18 06:01PM  Associated Press]
▶ Con Edison Declares Common Stock Dividend   [Apr-19-18 04:30PM  GlobeNewswire]
▶ Con Edison to Report 1st Quarter 2018 Earnings on May 3rd   [Apr-17-18 04:30PM  GlobeNewswire]
▶ 70 Stocks That Could Survive a U.S. Trade War With China   [Apr-09-18 10:24AM  TheStreet.com]
▶ [$$] Northeast Braces for Next Storm as Thousands Still Without Power   [Mar-06-18 07:55PM  The Wall Street Journal]
▶ [$$] Power Still Out for Thousands in New York, New Jersey   [12:27AM  The Wall Street Journal]
▶ Top Dividend Paying Stocks   [Feb-23-18 08:02AM  Simply Wall St.]
▶ This 8.7%-Yielder Sees a Return to Growth Coming in 2018   [Feb-20-18 01:37PM  Motley Fool]
▶ Con Ed beats 4Q profit forecasts   [05:12PM  Associated Press]
▶ Con Edison Reports 2017 Earnings   [04:51PM  GlobeNewswire]
▶ Consolidated Edisons Healthy Dividend Profile   [Jan-26-18 05:35PM  Market Realist]
▶ Con Edison to Report 2017 Earnings on February 15   [Jan-23-18 04:26PM  GlobeNewswire]
▶ Con Edison Declares Common Stock Dividend   [Jan-18-18 02:35PM  GlobeNewswire]
▶ Why I Couldn't Resist Buying This Ultra High-Yield Stock   [Jan-11-18 10:34AM  Motley Fool]
▶ Traders Should Get Out of Consolidated Edison   [Jan-03-18 08:57AM  TheStreet.com]
▶ Timothy P. Cawley Becomes President of Con Edison   [Jan-02-18 10:20AM  GlobeNewswire]
▶ Closing Bell Ringer, December 14, 2017   [03:59PM  CNBC Videos]
▶ Consolidated Edison Getting Closer To Key Technical Benchmark   [Dec-07-17 03:00AM  Investor's Business Daily]
▶ How Safe is Consolidated Edison's Dividend?   [Nov-06-17 07:26AM  Motley Fool]
▶ Con Ed misses 3Q profit forecasts   [Nov-02-17 05:55PM  Associated Press]
Financial statements of ED
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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