Regulated Electric · NYSE
Current Price
$79.59
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Public Service Enterprise Group Incorporated with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Public Service Enterprise Group Incorporated, through its subsidiaries, operates as an energy company primarily in the Northeastern and Mid-Atlantic United States. It operates through two segments, PSE&G and PSEG Power. The PSE&G segment transmits electricity; distributes electricity and gas to residential, commercial, and industrial customers, as well as invests in solar generation projects, and energy efficiency and related programs; and offers appliance services and repairs. As of December 31, 2021, it had electric transmission and distribution system of 25,000 circuit miles and 862,000 poles; 56 switching stations with an installed capacity of 39,353 megavolt-amperes (MVA), and 235 substations with an installed capacity of 9,285 MVA; four electric distribution headquarters and five electric sub-headquarters; and 18,000 miles of gas mains, 12 gas distribution headquarters, two sub-headquarters, and one meter shop, as well as 58 natural gas metering and regulating stations. Public Service Enterprise Group Incorporated was incorporated in 1985 and is based in Newark, New Jersey.
ROIC (TTM)
4.9%
ROE (TTM)
12.6%
FCF Yield
0.69%
Based on trailing twelve-month data, PEG shows a free cash flow per share of N/A and a ROIC of 4.9%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 0.69% are important context metrics when evaluating PEG's stock valuation relative to peers.
The intrinsic value of PEG depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether PEG is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $79.59. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Public Service Enterprise Group Incorporated: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Regulated Electric industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting PEG's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Public Service Enterprise Group Incorporated, this means projecting how much free cash flow the Regulated Electric will produce over the next 5-10 years, then discounting those amounts to today's dollars. PEG's ROIC of 4.9% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For PEG, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
