10Y annualized return is
positive but below market average
at 1.3% per year
PPL has met or exceeded earnings expectations in
some
recent quarters (5/10)
Reasonable Price-to-Book Ratio
Attractive Gross Profit Margin
Healthy Operating Profit Margin
Positive Net Profit Margin
Manageable Debt-to-Equity Ratio
Interest Coverage Ratio Above 2
🔒 Strong Operational Performance
🌱 Infrastructure Investment
📈 Consistent Growth Outlook
⚡ Emphasis on Innovation
🌍 Commitment to Clean Energy
📊 Data Center Growth Potential
High P/E Ratio
Negative Price-to-Free Cash Flow Ratio
Low Return on Equity
Low Current and Quick Ratios
💰 Regulatory Lag Concerns
🔄 Dependency on Capital Markets
🌀 Weather-Related Challenges
📉 Mild Weather Impact
Overall, PPL Corporation showcases a strong operational performance and a solid growth outlook supported by significant infrastructure investments and a commitment to innovation. However, potential regulatory lag and reliance on capital markets pose risks that need to be managed carefully.
Analysis Date: February 13, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
PPL Corporation is a company that provides electricity and natural gas to homes and businesses in the United States and the United Kingdom. They serve many customers in Kentucky and Pennsylvania, making sure people have the energy they need for everyday life. PPL generates electricity from different sources like coal, gas, water, and solar power. Essentially, they help keep the lights on and homes warm for millions of people.
Streams of revenue
Geographic Distribution
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$15.04
Current Market Price: $34.47
IV/P Ratio: 0.44x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-129.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for PPL
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (28.64)
P/B ratio ≤ 1.5 (1.26)
Current ratio ≥ 2.0 (0.90x)
Long-term debt < Net current assets (-102.26x)
Margin of safety (-129.0%)
PPL does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
The operating profit margin of 20.86% reflects strong operational efficiency, implying that the company is effective in managing its operating expenses relative to its revenue.
With a net profit margin of 10.49%, the company shows that it can convert a portion of its revenue into profit, which is an encouraging sign for profitability.
A return on equity (ROE) of 5.70% indicates that the company is not generating significant returns for shareholders relative to their equity investment, which may be a red flag.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
5.70%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-25)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
39.34%
Higher values indicate better efficiency in production
TTM (as of 2025-04-25)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
10.49%
Higher values indicate better overall profitability
TTM (as of 2025-04-25)
The debt-to-equity ratio of 0.81 suggests that the company is not excessively leveraged, indicating a balanced approach to financing through debt and equity.
An interest coverage ratio of 2.39 implies that the company can comfortably cover its interest expenses with its earnings, highlighting a lower risk of default.
Both the current ratio (0.90) and quick ratio (0.90) indicate that the company may have liquidity concerns, as they are below the ideal benchmark of 1.0.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.81x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
0.90x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
PPL demonstrated top quartile transmission and distribution reliability in its service areas, even amidst severe weather challenges. The commitment to safety and reliability enhances customer trust and satisfaction.
The company executed $3.1 billion in infrastructure investments in 2024, which strengthens grid reliability and resilience. This proactive approach ensures continued service quality and safety for customers.
PPL has extended its target for 6% to 8% annual earnings and dividend growth through at least 2028, indicating a solid growth trajectory backed by a robust capital plan.
The company expects to experience regulatory lag during its growth period, potentially affecting earnings in the short term as it transitions to a more rate-based growth model.
PPL anticipates needing $2.5 billion in equity through 2028 to fund its capital investments, indicating reliance on capital markets which may introduce risks depending on market conditions.
PPL is investing in advanced technologies and smart grid initiatives to enhance operational efficiency, which positions the company to better manage future energy demands and customer needs.
The planned generation replacement strategy includes investments in renewable energy sources such as solar and battery storage, aligning with market trends towards cleaner energy solutions.
PPL is seeing robust demand from data center developments, which could lead to significant transmission capital investments and lower costs for customers as these centers come online.
The company has faced weather-related challenges impacting operations and financial performance, highlighting vulnerability to environmental factors.
The mild weather in December 2024 slightly affected earnings, illustrating how external factors can influence financial results.