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Fundamental analysis: The AES Corporation (AES)

Awarener score: 5.9

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Average), the business stability (Good) and growth (Modest), and the company's inclination to return cash to the stockholders (Good).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 6.0

  • Business growth has been almost stagnant. It's been below average when measured against peer companies.
  • The AES Corporation business trend stability is good. The higher the stability, the lower the risk. It looks slightly better than rivals.

Margins score: 6.5

  • AES profit margins -on goods and services sold- are usually meagre. They stand worse than most rival companies.
  • Business profit on sales tends to be excellent. It's great when measured against competitors.
  • Profits on sales made -available to repay debt and purchase properties- are usually very good. They remain in a weak position compared to peers.
  • Earnings -before income taxes and interests on loans taken- tend to be good in relation to total revenues. They're still mediocre against similar companies.
  • Profits -before income taxes- are usually sufficient considering total sales, and remain substantially worse when measured against rivals.
  • Total net profit tends to be hardly sufficient when confronted to sales. Company stands substantially worse when measured against comparable firms.

Growth score: 1.6

  • The AES Corporation profit -on goods and services sold- has been shrinking. It's been in a very weak position compared to competitors.
  • In recent years, earnings -on operations- have been shrinking, which has been worse than most comparable firms.
  • Profits -available to repay debt and purchase properties- tended to shrink, which compares substantially worse when measured against peer enterprises.
  • Earnings -before income taxes and interests on loans taken- tended to shrink. It turns to be in a very weak position compared to similar stocks.
  • In past years, at least once the company lost money -before income taxes-. It was bottom tier against rivals.
  • In the previous years, the firm had at least a total net loss, and last-in-rank when measured against peer companies.
  • The company lost money at least once in the past years. It's been a disappointment compared to industry peers.

Miscellaneous score: 2.0

  • AES had to pay too much income taxes in relation to profits made in the past years. It's been worse than most peers.
  • The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
  • We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 6.2

  • The AES Corporation usually gets good returns on the resources it controls. It proves weak when measured against peer firms.
  • The company normally gets sufficient proceeds -on the resources directly invested in the business-. They remain in a weak position compared to similar companies.
  • Profitability -in relation to owned resources- is usually modest. It ranks substantially worse when measured against competitors.
  • In the past, got good returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's below average when measured against comparable enterprises.

Usage of Funds score: 5.4

  • AES usually uses a sparse portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is modest. It stands below average when measured against rival firms.
  • The company is usually largely investing in new property, plant, and equipment, to expand its operating capabilities, which is weak when measured against industry peers.
  • In the past twelve months it paid somewhat low dividends, considering the current stock price. It came mediocre against competitors.
  • In recent years, has cut back dividend payments. It could be traversing challenging times. The company has behaved a disappointment compared to similar firms.
  • The company pays more dividends than genuine funds is usually able to generate, therefore borrowing more funds. Future payments may be at risk, especially if a downturn in business occurs. Sustainability looks mediocre against comparable companies.
  • The company barely enlarges the pool of investors, resulting in slightly more mouths feeding on the pie of profits. It remains a slight improvement compared to peer enterprises.
  • Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands close to average when compared to rivals.
  • We do not have sufficient data to comment on buybacks and their sustainability. It still looks dubious against competitors.

Balance Sheet score: 4.6

  • The AES Corporation intangible assets (like brands and goodwill) represent a significant portion of resources controlled, according to accounting books. There could be significant difficulties in liquidating them if the company ever gets in financial distress. It happens to be last-in-rank when measured against peer companies.
  • The company has somewhat lower short-term resources than short-term obligations. Unless it's part of the business model, there might some liquidity concerns. It turns to be lacking compared to similar firms.
  • A substantial part of resources controlled were provided for with financial debt. Creditors have as many claims on the company as shareholders. The situation is somewhat risky. It remains bottom tier against rival firms.
  • Controlled resources take time to be turned into cash and equivalents, which is somewhat risky. It looks similar to rivals.
  • For every dollar of short-term obligations, the company has less than a dollar of cash and short-term receivables. It's in a very weak position compared to peer firms.
  • For every dollar of short-term obligations, the company has few cents of cash and equivalents, which is slightly worse than similar enterprises.
  • Usually, sales are on a two-months credit. It still ranks encouraging in relation to peers.
  • Normally has approximately somewhat less than two months of sales worth in inventory. It comes up as lacking compared to competitors.
  • On average, it takes higher than three months from the purchase to charging customers. It happens to be somewhat better than peers.
  • On average pays suppliers approximately three months after the purchase. It ranks encouraging in relation to industry peers.
  • The company pays its suppliers less than one month before charging its customers, so there's little money invested in working capital. It's excellent in relation to similar companies.
  • Usual business earnings are mostly consumed by net interest expenses. Creditors may be earning money by assuming risks, but stockholders not so much. Profitability must increase, lest the firm risks only working for creditors' benefit. It stands mediocre against rival firms.
  • Business earnings have usually been very low when measured against loans taken. Even significantly cutting back reinvesting in the business, it could take more than ten years to repay the obligations with current profitability. It ranks weak when measured against comparable enterprises.
  • Last twelve months revenues were non-significant in relation to fixed assets. The company must improve income to take advantage of used resources. It looks a slight improvement compared to similar firms.
  • Resource exploitation is slightly low when yearly sales are considered, business volume should be increased. This metric is normally tied to the industry where the firm belongs. It's still slightly better than peer companies.

Valuation score: 4.0

  • The AES Corporation reported losses, so valuating it in relation to earnings is meaningless. It happens to be last-in-rank when measured against competitors.
  • Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains in a very weak position compared to peers.
  • In the past twelve months, the company neither generated nor consumed funds. Whatever funds it could generate, it reinvested in the business, which stands somewhat better than similar companies.
  • In the past years the company barely generated enough genuine funds to cover up for its business needs. Business prospects should improve to be in a better position to reward investors. It's still great when measured against industry firms.
  • In the past twelve months, the company has barely rewarded investors, considering both dividends and share on the pie of earnings. It came up in a weak position compared to peer ventures.
  • The company is largely indebted. It should focus on loan repayment before rewarding stockholders. It looks bottom tier against similar enterprises.
  • Considering the past twelve months, traditional Price-to-Earnings relation has been negative, as the company lost money. It ranks last-in-rank when measured against peer companies.
  • Comparing the current stock price with the past twelve-months revenues gives a more than one-to-one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks excellent in relation to rival firms.
  • The relation between the stock price and accounting book value is really high, which may be good or bad depending on context. Run again in analytic mode if you want to dig deeper. The company remains mediocre against peer firms.
  • In the past twelve months, the operating business lost a little money. It happens to be substantially worse when measured against industry peers.
  • In an alternate metric of bang for the buck, the company has usually shown a modest earnings power ability when measured against the current stock price and financial position. It's still in a very weak position compared to peer companies.

Total score: 4.5


AES logos

Company at a glance: The AES Corporation (AES)

Sector, industry: Utilities, Utilities—Diversified

Market Cap: 16.22 billions

Revenues TTM: 11.74 billions

The AES Corporation operates as a diversified power generation and utility company. It owns and/or operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries. The company also owns and/or operates utilities to generate or purchase, distribute, transmit, and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors; and generates and sells electricity on the wholesale market. It uses a range of fuels and technologies to generate electricity, including coal, gas, hydro, wind, solar, and biomass; and renewables, such as energy storage and landfill gas. The company owns and/or operates a generation portfolio of approximately 31,459 megawatts. It has operations in the United States, Puerto Rico, El Salvador, Chile, Colombia, Argentina, Brazil, Mexico, Central America, the Caribbean, Europe, and Asia. The company was formerly known as Applied Energy Services, Inc. and changed its name to The AES Corporation in April 2000. The AES Corporation was incorporated in 1981 and is headquartered in Arlington, Virginia.

Awarener score: 5.9

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Average), the business stability (Good) and growth (Modest), and the company's inclination to return cash to the stockholders (Good).