Public Service Enterprise Group: Hard To Make A Case For The Stock At The Current Price

2025-04-21 10:25:04 ET

Summary

• Public Service Enterprise Group is New Jersey's largest utility, serving 2.4 million electric and 1.9 million natural gas customers, with a focus solely on New Jersey.
• Public Service Enterprise Group's lower yield compared to peers suggests potential for higher earnings growth, but its historical GAAP earnings growth is modest.
• The company plans to invest $21-$24 billion from 2025-2029, aiming for a 5%-7% non-GAAP operating earnings growth, though past performance shows limited GAAP growth.
• Currently, Public Service Enterprise Group appears overvalued compared to peers, with higher price-to-book ratios and price-to-earnings growth ratios, making it a less attractive buy.

Public Service Enterprise Group Incorporated ( PEG ) is a regulated electric and natural gas utility that serves approximately 2.4 million electric and 1.9 million natural gas customers throughout the state of New Jersey:

As the above screenshotted slide (which comes from a presentation that the company made to its investors last month) shows, Public Service Enterprise Group is the largest utility that serves the state, with most of the others being much smaller and serving only a single town or region within the state. The other major suppliers of utility services in the state are Atlantic City Electric, which is owned by Exelon ( EXC ), Jersey Central Power & Light, which is owned by FirstEnergy ( FE ), Orange & Rockland, which is owned by Consolidated Edison ( ED ), New Jersey Resources ( NJR ), and South Jersey Industries, which was acquired by the Infrastructure Investments Fund back in 2022. Here is how Public Service Enterprise Group compares to these companies in terms of size:

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