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Xel 2 used
Xel 2 used






This article by Simply Wall St is general in nature. Alternatively, email editorial-team (at). Have feedback on this article? Concerned about the content? Get in touch with us directly. Simply Wall St updates its DCF calculation for every American stock every day, so if you want to find the intrinsic value of any other stock just search here. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! Management:Have insiders been ramping up their shares to take advantage of the market's sentiment for XEL's future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors. We've identified 3 warning signs with Xcel Energy (at least 1 which is a bit unpleasant), and understanding them should be part of your investment process. Risks: Consider for instance, the ever-present spectre of investment risk. For Xcel Energy, there are three relevant elements you should further research:

#Xel 2 used free

For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. It's not possible to obtain a foolproof valuation with a DCF model. Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn't be the only metric you look at when researching a company. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out. Relative to the current share price of US$74.2, the company appears around fair value at the time of writing. The expected dividend per share is then discounted to today's value at a cost of equity of 5.3%. In this case we used the 5-year average of the 10-year government bond yield (1.9%). For a number of reasons a very conservative growth rate is used that cannot exceed that of a company's Gross Domestic Product (GDP). We use the Gordon Growth Model, which assumes dividend will grow into perpetuity at a rate that can be sustained. This often underestimates the value of a stock, but it can still be good as a comparison to competitors. Instead of using free cash flows, which are hard to estimate and often not reported by analysts in this industry, dividends per share (DPS) payments are used. View our latest analysis for Xcel Energy Step by step through the calculationĪs Xcel Energy operates in the electric utilities sector, we need to calculate the intrinsic value slightly differently. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model. We would caution that there are many ways of valuing a company and, like the DCF, each technique has advantages and disadvantages in certain scenarios. There's really not all that much to it, even though it might appear quite complex. We will take advantage of the Discounted Cash Flow (DCF) model for this purpose. ( NASDAQ:XEL) by estimating the company's future cash flows and discounting them to their present value. Today we will run through one way of estimating the intrinsic value of Xcel Energy Inc.






Xel 2 used