February 16, 2023

ENGIE - a highly ranked renewables supplier

ENGIE - a highly ranked renewables supplier

Everybody loves a good friendly tip and that’s why this week we’re looking at ENGIE - a French utilities company recommended in the weekly Obermatt Coffee Chat.

As ENGIE’s primary focus is on the energy transition and developing processes that help transition to renewable energy sources, we instantly like it. On top of that, ENGIE’s 360° View is at 99 - meaning that our algorithm ranks it very highly among its European peers. Let’s look at why we think ENGIE is a good pick.

PRO: The following three points speak for a buy:

  1. Very good Obermatt ranks. ENGIE’s 360° View Rank is at 99, which means that the company is doing better than 99% of its European peers by Obermatt’s new all-around view, both by its financial and sentiment data.
  2. Their primary focus is energy transition, which means they develop processes that help transition to renewable sources. They are now involved in building a low-carbon hydrogen production plant in Belgium.
  3. Multi-utility companies like ENGIE are a pretty safe investment, as they are well diversified: ENGIE works with gas, nuclear, hydro, and other modern renewable energy sources.

CONTRA: The following three points argue against it:

  1. As all energy producers in Europe, ENGIE was hit by the EU’s recent cap on energy prices.
  2. By looking at their financial report, ENGIE has a lot of debt. On the other hand, Obermatt ranks don’t show this, which means they are still better financed than their peers, which makes us confident.
  3. One may argue that gas suppliers are risky, taking the recent geopolitical issues into account. ENGIE is rather safe, in our opinion, as they are rather diversified with their energy sources.

We think this was a good tip, so we bought ENGIE for Obermmatt’s Europe Value Wikifolio. Feel free to join our Coffee Break Zoom stock discussion, learn more from our guest investors, and help shape the Obermatt Wikifolios.

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