December 26, 2024
Top 10 Stock NRG Hold Recommendation
How to read the 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.
Snapshot: NRG – Top 10 Stock in Low Emission Leaders
NRG is listed as a top 10 stock on December 26, 2024 in the market index Low Emissions because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is below average and thus a signal for caution. Based on the Obermatt 360° View of 41 (41% performer), Obermatt assesses an overall hold recommendation for NRG on December 26, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Electric Utilities |
| Index | Low Emissions, Diversity USA, Nuclear, SDG 13, SDG 3, SDG 5, SDG 7, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View NRG Hold
| 360 METRICS | December 26, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 53 |
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| GROWTH | ||||||||
| GROWTH | 100 |
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| SAFETY | ||||||||
| SAFETY | 19 |
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| SENTIMENT | ||||||||
| SENTIMENT | 23 |
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| 360° VIEW | ||||||||
| 360° VIEW | 41 |
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ANALYSIS: With an Obermatt 360° View of 41 (better than 41% compared with alternatives), overall professional sentiment and financial characteristics for the stock NRG are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for NRG. The consolidated Value Rank has an attractive rank of 53, which means that the share price of NRG is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 53% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 100, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 23. Professional investors are more confident in 77% other stocks. Worryingly, the company has risky financing, with a Safety rank of 19. This means 81% of comparable companies have a safer financing structure than NRG. ...read more
RECOMMENDATION: With a consolidated 360° View of 41, NRG is worse than 59% of all alternative stock investment opportunities based on the Obermatt Method. Even though half of the consolidated Obermatt Ranks are above-average, namely the Value Rank at 53 and the Growth Rank above-average at 100, the picture is still mixed. The professional investor community is skeptical, with the Sentiment Rank below-average at 23. In addition, the company financing structure is on the riskier side (Safety Rank of 19). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. One may be tempted by above-average growth, but that could also change quickly, as past performance is not a good indicator of future performance. Since the financing structure is on the risky side, investors should be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for NRG negative
ANALYSIS: With an Obermatt Sentiment Rank of 23 (better than 23% compared with alternatives), overall professional sentiment and engagement for the stock NRG is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for NRG. Analyst Opinions are at a rank of 62 (better than 62% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive and has a rank of 50 which means that currently, stock research experts are getting even more optimistic about investments in NRG. But Market Pulse has a low rank of 36, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 64% of competitors). This is an essential sign of caution, as it could be the forebearer of bad news. Professional Investors are also somewhat absent with a rank of 13, which means that, currently, professional investors hold less stock in this company than in 87% of alternative investment opportunities. Pros tend to invest in other companies. This is expected if the company is of a smaller size (medium or smaller). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 23 (less encouraging than 77% compared with investment alternatives), NRG has a reputation among professional investors that is far below that of its competitors. While the general news feeds in the professional market are negative, the analyst recommendations are optimistic about the company, and even increase their ratings despite the negative news. This is an ambiguous situation with positive and negative signals from the professional side. Investors should be on the lookout for negative news but not worry too much about it as long as the overall news is still positive. ...read more
Value Strategy: NRG Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 53 (better than 53% compared with alternatives), NRG shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half are above average for NRG. Price-to-Sales (P/S) is 100, which means that the stock price compared with what market professionals expect for future sales is lower than for 100% of comparable companies, indicating a good value concerning NRG's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 83% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 9 (dividends are expected to be higher than for 9% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 90% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for NRG to 10. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 53, is a buy recommendation based on NRG's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner on assets than its competitors. For instance, the company could be leasing its production facilities, or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the low Dividend Yield is also explained as such companies tend to invest their income into market development. The other good value ranks for Sales and Profits are encouraging indicators for the stock price value. ...read more
Growth Strategy: NRG Growth Momentum high
| GROWTH METRICS | December 26, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 42 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 100 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 76 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 97 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 100 |
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ANALYSIS: With an Obermatt Growth Rank of 100 (better than 100% compared with alternatives) for 2024, NRG 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 NRG. Profit Growth has a rank of 100 which means that currently professionals expect the company to grow its profits more than 100% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 76, and Stock Returns has a rank of 97 which means that the stock returns have recently been above 97% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 42 (58% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 100, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: NRG Debt Financing Safety risky
| SAFETY METRICS | December 26, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 4 |
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| REFINANCING | ||||||||
| REFINANCING | 93 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 1 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 19 |
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ANALYSIS: With an Obermatt Safety Rank of 19 (better than 19% compared with alternatives), the company NRG 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 NRG 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 just one indicator above average for NRG and the other two below average. Refinancing is at 93, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 93% of its competitors. But Leverage is high with a rank of 4, meaning the company has an above-average debt-to-equity ratio. It has more debt than 96% of its competitors. Liquidity is also on the riskier side with a rank of 1, meaning the company generates less profit to service its debt than 99% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 19 (worse than 81% compared with alternatives), NRG has a financing structure that is significantly riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for NRG are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: NRG Above-Average Financial Performance
| COMBINED PERFORMANCE | December 26, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 53 |
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| GROWTH | ||||||||
| GROWTH | 100 |
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| SAFETY | ||||||||
| SAFETY | 1 |
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| COMBINED | ||||||||
| COMBINED | 71 |
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ANALYSIS: With an Obermatt Combined Rank of 71 (better than 71% compared with investment alternatives), NRG (Electric Utilities, USA) shares have above-average financial characteristics compared with similar stocks. Shares of NRG are a good value (attractively priced) with a consolidated Value Rank of 53 (better than 53% of alternatives), show above-average growth (Growth Rank of 100) but are riskily financed (Safety Rank of 19), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 71, is a buy recommendation based on NRG's financial characteristics. As the company NRG's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 53) and above-average growth (Obermatt Growth Rank of 100), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 19) 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. ...read more
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