Public Service Enterprise Group Incorporated (PEG) Stock Valuation — PE Analysis
Regulated Electric · NYSE
Current Price
$72.61
PE Ratio (TTM)
18.0x
Intrinsic Value
$81.73
+11.2% margin of safety
COMPETITIVE MOAT
↑Regulated Monopoly Infrastructure
PSEG operates essential electric and gas infrastructure, granting it a de facto monopoly in its service territories. High capital costs create significant barriers to entry for potential competitors.
↑Essential Service Demand
Electricity and gas are non-discretionary services, ensuring consistent demand regardless of economic cycles. This provides a stable revenue base for the company.
↑Long-Term Capital Investments
Significant, long-lived assets require substantial upfront investment, deterring new entrants. These investments are often approved by regulators, ensuring a return.
INVESTMENT RISKS
↓Interest Rate Sensitivity
As a capital-intensive utility, PSEG relies heavily on debt financing. Rising interest rates increase borrowing costs, potentially impacting earnings and dividend sustainability.
↓Extreme Weather Events
Severe weather can disrupt operations, damage infrastructure, and lead to significant repair costs. These events can also result in regulatory penalties if service restoration is delayed.
↓Cybersecurity Threats
The critical nature of utility infrastructure makes PSEG a target for cyberattacks. A successful breach could lead to widespread service disruptions and significant financial and reputational damage.
Base case
PEG base case PE valuation
A base case PE valuation for PEG estimates a fair value of about $81.73 per share, against a current price of $72.61. The model assumes 7.0% annual earnings growth, a 18.02x target PE multiple, and a 10% discount rate.
Intrinsic Value
$81.73
Margin of safety
+11.2%
Expected annual return
+2.4%
Base case assumptions: 7.0% annual earnings growth, 18.02x target PE, 10% discount rate, 5 year projection. Data as of 2026-08-21.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the PEG PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Public Service Enterprise Group Incorporated respond.
Open PE Calculator for PEGCompany Overview
Public Service Enterprise Group Incorporated (PSEG) is an energy provider primarily operating through its subsidiaries in the Northeastern and Mid-Atlantic United States. The company's business activities are structured into two primary segments: PSE&G and PSEG Power. The PSE&G division is responsible for transmitting electricity and distributing both electricity and natural gas to residential, commercial, and industrial customers. This segment also commits resources to solar power generation projects and various energy efficiency initiatives, as well as offering appliance service and repair. By December 31, 2021, its substantial infrastructure included 25,000 circuit miles of electric transmission and distribution systems, supported by 862,000 utility poles. It also featured 56 switching stations with a total capacity of 39,353 megavolt-amperes (MVA) and 235 substations with a combined capacity of 9,285 MVA. The electric network was further managed by four main and five sub-electric distribution headquarters. On the gas side, PSE&G maintained 18,000 miles of gas mains, twelve primary and two secondary gas distribution headquarters, a single meter shop, and 58 natural gas metering and regulating stations. Public Service Enterprise Group Incorporated was established in 1985 and is headquartered in Newark, New Jersey.
Financial Metrics — PEG PE Stock Valuation Data
PE Ratio (TTM)
18.0x
PEG Ratio
8.90
Earnings Yield
5.55%
ROE (TTM)
11.7%
Revenue/Share (TTM)
$25.14
Dividend Yield
3.58%
Debt/Equity
1.42x
Frequently Asked Questions
What is the PE ratio of PEG?
The trailing twelve-month PE ratio of PEG reflects how much investors pay per dollar of Public Service Enterprise Group Incorporated's earnings. This metric is most useful when compared to Regulated Electric peers and the company's own historical range.
Is PEG overvalued based on PE ratio?
PEG's PE of 18.0x combined with a PEG ratio of 8.90 provides a growth-adjusted perspective. A PEG above 2.0 means the P/E is high relative to the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Regulated Electric, a DCF analysis may be more appropriate.
How do I value PEG stock using PE ratio?
To value Public Service Enterprise Group Incorporated using PE: (1) Compare the current PE (18.0x) against the Regulated Electric median to assess relative pricing, (2) check the PEG ratio (8.90) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of PEG?
PEG's PEG ratio is 8.90, calculated by dividing the PE ratio (18.0x) by the expected earnings growth rate. A PEG above 2.0 means the P/E is high relative to the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for PEG stock valuation?
PE ratio gives a quick relative read — how PEG is priced versus Regulated Electric peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See PEG DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Utilities valuationsP/E and DCF value PEG with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-08-21. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.