Fact based stock research
Pennon (LSE:PNN)
GB00BNNTLN49
How to read the free ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Pennon stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 56 (better than 56% compared with investment alternatives), Pennon (Water Utilities, United Kingdom) shares have above-average financial characteristics compared with similar stocks. Shares of Pennon are a good value (attractively priced) with a consolidated Value Rank of 61 (better than 61% of alternatives), show above-average growth (Growth Rank of 93) but are riskily financed (Safety Rank of 4), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 56, is a buy recommendation based on Pennon's financial characteristics. As the company Pennon's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 61) and above-average growth (Obermatt Growth Rank of 93), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 4) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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Country | United Kingdom |
Industry | Water Utilities |
Index | FTSE All Shares, FTSE 100, FTSE 350, Customer Focus EU, Employee Focus EU, Diversity Europe, Low Waste, Recycling, Water Tech |
Size class | Large |
This stock has achievements: Top 10 Stock.
10-Oct-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.
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Review the performance ranks of the individual metrics that form each investment strategy.
Research History: Pennon
RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
---|---|---|---|---|---|---|---|---|
VALUE | ||||||||
VALUE | 78 |
|
47 |
|
34 |
|
61 |
|
GROWTH | ||||||||
GROWTH | 16 |
|
11 |
|
31 |
|
93 |
|
SAFETY | ||||||||
SAFETY | 96 |
|
88 |
|
5 |
|
4 |
|
SENTIMENT | ||||||||
SENTIMENT | n/a |
|
3 |
|
12 |
|
new | |
360° VIEW | ||||||||
360° VIEW | n/a |
|
21 |
|
1 |
|
new |
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 56 (better than 56% compared with investment alternatives), Pennon (Water Utilities, United Kingdom) shares have above-average financial characteristics compared with similar stocks. Shares of Pennon are a good value (attractively priced) with a consolidated Value Rank of 61 (better than 61% of alternatives), show above-average growth (Growth Rank of 93) but are riskily financed (Safety Rank of 4), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 56, is a buy recommendation based on Pennon's financial characteristics. As the company Pennon's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 61) and above-average growth (Obermatt Growth Rank of 93), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 4) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
---|---|---|---|---|---|---|---|---|
VALUE | ||||||||
VALUE | 78 |
|
47 |
|
34 |
|
61 |
|
GROWTH | ||||||||
GROWTH | 16 |
|
11 |
|
31 |
|
93 |
|
SAFETY | ||||||||
SAFETY | 96 |
|
88 |
|
5 |
|
4 |
|
COMBINED | ||||||||
COMBINED | 76 |
|
54 |
|
1 |
|
56 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 61 (better than 61% compared with alternatives), Pennon shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where three out of four indicators are above average for Pennon. Price-to-Sales (P/S) is 53 which means that the stock price compared with what market professionals expect for future sales is lower than for 53% of comparable companies, indicating a good value for Pennon's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 51. Finally, compared with other companies in the same industry, dividend yields of Pennon are expected to be higher than for 95% of all competitors (a Dividend Yield rank of 95). The only low rank is for expected profits with a Price-to-Profit Rank of 24, indicating that the market expects the company's profit to be low despite a high dividend. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 61, is a buy recommendation based on Pennon's stock price compared with the company's operational size and dividend yields. The low Profit Rank could result from a one-off charge, for instance, for an accident, a legal settlement, or a restructuring project. If the company keeps its dividends high, the low expected profit may be transitory. If that is the case, the three good value ranks for Sales, Capital, and Dividends are reliable indicators for good stock price value, a low stock price. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more
VALUE METRICS | 2021 | 2022 | 2023 | 2024 | ||||
---|---|---|---|---|---|---|---|---|
PRICE VS. REVENUES (P/S) | ||||||||
PRICE VS. REVENUES (P/S) | 22 |
|
28 |
|
32 |
|
53 |
|
PRICE VS. PROFITS (P/E) | ||||||||
PRICE VS. PROFITS (P/E) | 96 |
|
36 |
|
7 |
|
24 |
|
PRICE VS. CAPITAL (Market-to-Book) | ||||||||
PRICE VS. CAPITAL (Market-to-Book) | 71 |
|
57 |
|
30 |
|
51 |
|
DIVIDEND YIELD | ||||||||
DIVIDEND YIELD | 56 |
|
67 |
|
79 |
|
95 |
|
CONSOLIDATED RANK: VALUE | ||||||||
CONSOLIDATED RANK: VALUE | 78 |
|
47 |
|
34 |
|
61 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 93 (better than 93% compared with alternatives) for 2024, Pennon shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Pennon. Sales Growth has a value of 89 which means that currently professionals expect the company to grow more than 89% of its competitors. Profit Growth with a value of 92 and Capital Growth with a rank of 74 means that currently, professionals expect the company to grow both profits and invested capital more than of its competitors. But Stock Returns has only a rank of 33, which means that stock returns have recently been below 67% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 93, is a buy recommendation for growth and momentum investors. Pennon has only one below-average growth indicator, the stock returns. This is probably the least reliable growth indicator, because it measures company and investor expectations at the same time. The three other growth indicators, which are all positive for Pennon, are more reliable measures of growth momentum. For this reason, the company seems to be on a good trajectory, unless you think the current period is not representative, because of unique events that will not be repeated in the future. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more
GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
---|---|---|---|---|---|---|---|---|
REVENUE GROWTH | ||||||||
REVENUE GROWTH | 42 |
|
38 |
|
64 |
|
89 |
|
PROFIT GROWTH | ||||||||
PROFIT GROWTH | 33 |
|
19 |
|
55 |
|
92 |
|
CAPITAL GROWTH | ||||||||
CAPITAL GROWTH | n/a |
|
17 |
|
45 |
|
74 |
|
STOCK RETURNS | ||||||||
STOCK RETURNS | 42 |
|
55 |
|
25 |
|
33 |
|
CONSOLIDATED RANK: GROWTH | ||||||||
CONSOLIDATED RANK: GROWTH | 16 |
|
11 |
|
31 |
|
93 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 4 (better than 4% compared with alternatives), the company Pennon has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Pennon is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for Pennon. Liquidity is at 14, meaning that the company generates less profit to service its debt than 86% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 7, meaning the company has an above-average debt-to-equity ratio. It has more debt than 93% of its competitors. Finally, Refinancing is at a rank of 49 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 51% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 4 (worse than 96% compared with alternatives), Pennon has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. Investors should look at Obermatt’s Value, Growth, and Sentiment Ranks to confirm a very positive outlook or be careful with investing in stocks of Pennon because it may suffer significantly in case of future difficulties. ...read more
SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
---|---|---|---|---|---|---|---|---|
LEVERAGE | ||||||||
LEVERAGE | 87 |
|
74 |
|
12 |
|
7 |
|
REFINANCING | ||||||||
REFINANCING | 81 |
|
91 |
|
45 |
|
49 |
|
LIQUIDITY | ||||||||
LIQUIDITY | 92 |
|
41 |
|
13 |
|
14 |
|
CONSOLIDATED RANK: SAFETY | ||||||||
CONSOLIDATED RANK: SAFETY | 96 |
|
88 |
|
5 |
|
4 |
|
Sentiment Metrics in Detail
SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
---|---|---|---|---|---|---|---|---|
ANALYST OPINIONS | ||||||||
ANALYST OPINIONS | n/a |
|
25 |
|
35 |
|
new | |
OPINIONS CHANGE | ||||||||
OPINIONS CHANGE | n/a |
|
23 |
|
29 |
|
new | |
PRO HOLDINGS | ||||||||
PRO HOLDINGS | n/a |
|
35 |
|
22 |
|
new | |
MARKET PULSE | ||||||||
MARKET PULSE | n/a |
|
30 |
|
23 |
|
new | |
CONSOLIDATED RANK: SENTIMENT | ||||||||
CONSOLIDATED RANK: SENTIMENT | n/a |
|
3 |
|
12 |
|
new |
Free stock analysis by the purely fact based Obermatt Method for Pennon from October 10, 2024.
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