June 13, 2024
Top 10 Stock PPL Strong Buy 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: PPL – Top 10 Stock in SDG 9: Industry, Innovation and Infrastructure
PPL is listed as a top 10 stock on June 13, 2024 in the market index SDG 9 because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 99 (top 99% performer), Obermatt assesses an overall strong buy recommendation for PPL on June 13, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Electric Utilities |
| Index | Low Emissions, Customer Focus US, SDG 13, SDG 6, SDG 7, SDG 8, SDG 9, S&P 500 |
| Size class | X-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 PPL Strong Buy
| 360 METRICS | June 13, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 39 |
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| GROWTH | ||||||||
| GROWTH | 75 |
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| SAFETY | ||||||||
| SAFETY | 95 |
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| SENTIMENT | ||||||||
| SENTIMENT | 85 |
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| 360° VIEW | ||||||||
| 360° VIEW | 99 |
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ANALYSIS: With an Obermatt 360° View of 99 (better than 99% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock PPL are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for PPL. The consolidated Growth Rank has a good rank of 75, 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. This means that growth is higher than for 75% of competitors in the same industry. The consolidated Safety Rank at 95 means that the company has a financing structure that is safer than 95% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 85, which means that professional investors are more optimistic about the stock than for 85% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 39, meaning that the share price of PPL is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 61% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 99, PPL is better positioned than 99% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 75), a safe financing structure (Safety Rank of 95), and positive professional market sentiment (Sentiment Rank of 85), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of PPL compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (75% better than peers). The value rank could be the reverse reflection of that (25%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for PPL very positive
ANALYSIS: With an Obermatt Sentiment Rank of 85 (better than 85% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock PPL is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for PPL. Analyst Opinions are at a rank of 88 (better than 88% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 66, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 62, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 62% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 45, which means that currently, professional investors hold less stock in this company than in 55% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 85 (more positive than 85% compared with investment alternatives), PPL has a reputation among professional investors that is significantly higher than that of its competitors. Not having too many professionals invested in PPL may be less of an issue, especially if the stock is from a smaller company where professionals typically invest less. It is natural for professional investors to focus on large and extra-large companies, as they provide more safety. Smaller companies attract fewer professionals in the shareholder community. Overall, the signals from the professionals are still quite favorable for investments in PPL. ...read more
Value Strategy: PPL Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 39 (worse than 61% compared with alternatives), PPL shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators where three out of four are below average for PPL. Only the Price-to-Book Capital ratio (also referred to as market-to-book ratio) indicates good stock value with a Price-to-Book Rank of 64, which means that the stock price is lower compared with invested capital than for 64% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 28 which means the stock price compared with what market professionals expect for future profits is higher than 72% of comparable companies, indicating a low value concerning PPL's revenue levels. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Book Rank of 64 and for the dividend yields rank which is lower than for 59% of comparable companies, making the stock more expensive as regards to with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 39, is a hold recommendation based on PPL's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for PPL, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. ...read more
Growth Strategy: PPL Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 75 (better than 75% compared with alternatives) for 2024, PPL 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 PPL. Profit Growth has a rank of 50 which means that currently professionals expect the company to grow its profits more than 50% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 90, and Stock Returns has a rank of 83 which means that the stock returns have recently been above 83% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 17 (83% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 75, 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: PPL Debt Financing Safety very solid
| SAFETY METRICS | June 13, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 80 |
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| REFINANCING | ||||||||
| REFINANCING | 85 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 76 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 95 |
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ANALYSIS: With an Obermatt Safety Rank of 95 (better than 95% compared with alternatives) for 2024, the company PPL has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of PPL is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for PPL. Leverage is at 80, meaning the company has a below-average debt-to-equity ratio. It has less debt than 80% of its competitors. Refinancing is at a rank of 85, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 85% of its competitors. Finally, Liquidity is also good at a rank of 76, which means that the company generates more profit to service its debt than 76% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 95 (better than 95% compared with alternatives), PPL has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: PPL Top Financial Performance
| COMBINED PERFORMANCE | June 13, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 39 |
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| GROWTH | ||||||||
| GROWTH | 75 |
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| SAFETY | ||||||||
| SAFETY | 76 |
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| COMBINED | ||||||||
| COMBINED | 93 |
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ANALYSIS: With an Obermatt Combined Rank of 93 (better than 93% compared with investment alternatives), PPL (Electric Utilities, USA) shares have much better financial characteristics than comparable stocks. Shares of PPL are low in value (priced high) with a consolidated Value Rank of 39 (worse than 61% of alternatives). But they show above-average growth (Growth Rank of 75) and are safely financed (Safety Rank of 95, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 93, is a strong buy recommendation based on PPL's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company PPL exhibits low value (Obermatt Value Rank of 39), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 75). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 95) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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