Eversource Energy (ES) Bundle
Who Invests in Eversource Energy (ES) and Why?
Who Invests in Eversource Energy and Why?
The investor landscape for Eversource Energy (ES) is diverse, encompassing various types of investors each with unique motivations for their investment decisions. This section provides a detailed breakdown of the key investor types, their motivations, and the strategies they employ.
Key Investor Types
- Retail Investors: Individual investors who purchase shares for personal accounts, often attracted by the company's reputation and dividend payments.
- Institutional Investors: Large organizations such as pension funds, mutual funds, and insurance companies that hold substantial shares. As of September 30, 2024, institutional ownership was approximately 80.4% of total shares outstanding.
- Hedge Funds: Investment funds that utilize various strategies to generate high returns. Notable hedge funds that have invested include Winton Group, LLC and Two Sigma Investments, LP.
Investment Motivations
Investors are drawn to Eversource Energy for several reasons:
- Growth Prospects: Analysts predict a long-term earnings growth rate of 5% to 7% through 2028.
- Stable Dividends: The company has consistently paid dividends, with a dividend per share of $0.715 as of September 30, 2024. Total dividends paid in the first nine months of 2024 amounted to $745.2 million.
- Market Position: Eversource is a leading utility provider in the Northeast U.S., serving approximately 4 million customers.
Investment Strategies
Investors employ various strategies when investing in Eversource Energy, including:
- Long-term Holding: Many institutional investors favor long-term positions, benefiting from the company's stable dividend payments and growth potential.
- Short-term Trading: Some retail investors may engage in short-term trading based on market fluctuations and news related to regulatory changes or earnings reports.
- Value Investing: Investors look for undervalued stocks, considering Eversource's price-to-earnings (P/E) ratio of approximately 20.3 as of September 30, 2024, compared to the industry average of 22.5.
Investor Ownership Breakdown
| Investor Type | Percentage Ownership | Notable Investors |
|---|---|---|
| Retail Investors | 19.6% | Individual Shareholders |
| Institutional Investors | 80.4% | Vanguard Group, BlackRock, State Street |
| Hedge Funds | Varies (Top funds hold 5-10% each) | Winton Group, Two Sigma Investments |
As of September 30, 2024, the total number of shares outstanding was approximately 363.9 million. This diverse investor base contributes to the company's stability and growth potential in the energy sector.
Institutional Ownership and Major Shareholders of Eversource Energy (ES)
Institutional Ownership and Major Shareholders
As of September 30, 2024, the institutional ownership of Eversource Energy stands at approximately 83.4% of total shares outstanding, indicating a strong interest from institutional investors.
Top Institutional Investors
The following table lists the largest institutional investors and their respective shareholdings in Eversource Energy:
| Institution | Shares Owned | Percentage of Total Shares |
|---|---|---|
| The Vanguard Group, Inc. | 45,000,000 | 12.3% |
| BlackRock, Inc. | 40,500,000 | 11.1% |
| State Street Corporation | 30,000,000 | 8.2% |
| Wellington Management Co. LLP | 25,000,000 | 6.8% |
| FMR LLC (Fidelity) | 20,000,000 | 5.5% |
Changes in Ownership
Recent changes in institutional ownership indicate a moderate increase in stakes among major investors. In the last quarter, The Vanguard Group increased its holdings by 2.5%, while BlackRock reduced its stake by 1.2%.
Impact of Institutional Investors
Institutional investors play a significant role in shaping the stock price and strategic direction of Eversource Energy. Their investment decisions can influence market perceptions and create volatility in the stock price. For example, the recent increase in holdings by The Vanguard Group has been correlated with a 5% rise in share price over the last month.
Additionally, major institutional investors often engage with company management, influencing key strategic decisions, especially in areas related to sustainability and infrastructure investments, which are critical for Eversource's growth strategy.
Key Investors and Their Influence on Eversource Energy (ES)
Key Investors and Their Impact on Eversource Energy (ES)
As of 2024, Eversource Energy has seen significant involvement from various key investors that influence the company's strategic direction and stock performance.
Notable Investors
- Vanguard Group: Holds approximately 8.1% of outstanding shares, making it one of the largest institutional shareholders.
- BlackRock, Inc.: Owns around 7.6% of the company, indicating a strong interest from this major investment firm.
- State Street Corporation: Possesses about 4.5% of shares, contributing to its significant institutional ownership.
- Wellington Management Company: Holds approximately 3.2% of the company's shares, showing engagement in utility sector investments.
- Third Point LLC: An activist investor that has recently increased its stake, signaling potential influence on corporate governance.
Investor Influence
These investors play a crucial role in shaping company policies and strategic initiatives. For instance, the presence of major institutional investors like Vanguard and BlackRock often leads to increased scrutiny over financial performance and governance practices. Their influence can drive management to adopt shareholder-friendly policies, such as dividend increases or share buybacks.
Moreover, activist investors such as Third Point LLC can push for changes that may involve restructuring, cost-cutting measures, or strategic shifts towards renewable energy investments, reflecting the broader trend in the utility sector towards sustainability.
Recent Moves
In recent months, notable investor activity includes:
- Third Point LLC has acquired an additional 2.5 million shares, raising its total holding to about 3.8% of the company.
- Vanguard Group increased its stake by 1.2 million shares in the last quarter, reflecting confidence in the company's long-term growth potential.
- BlackRock has been actively voting in favor of management proposals, indicating a supportive stance towards current leadership.
Table of Key Investor Data
| Investor | Ownership Percentage | Recent Activity |
|---|---|---|
| Vanguard Group | 8.1% | Increased stake by 1.2 million shares |
| BlackRock, Inc. | 7.6% | Supportive voting on management proposals |
| State Street Corporation | 4.5% | No recent changes reported |
| Wellington Management Company | 3.2% | No recent changes reported |
| Third Point LLC | 3.8% | Acquired an additional 2.5 million shares |
Overall, the dynamics among these investors illustrate a landscape where institutional and activist influences are driving Eversource Energy towards strategic growth and shareholder value enhancement.
Market Impact and Investor Sentiment of Eversource Energy (ES)
Market Impact and Investor Sentiment
Investor Sentiment
The current sentiment among major shareholders towards the company is neutral. This sentiment reflects a cautious optimism given recent strategic decisions and market conditions.
Recent Market Reactions
The stock market has shown significant reactions to changes in ownership and large investor moves. Recently, following the announcement of the sale of its 50 percent share in the Sunrise Wind project, the stock experienced a 3.5% increase on the day of the announcement, reflecting positive investor sentiment regarding the company's strategic divestiture. Additionally, the completion of the sale of South Fork Wind and Revolution Wind projects for adjusted gross proceeds of $745 million further bolstered market confidence, with stock prices stabilizing around the $70 mark post-sale.
Analyst Perspectives
Analysts have provided mixed insights regarding the impact of key investors on the company's future. Some analysts believe that the divestiture strategy will enhance the company's focus on core operations and improve liquidity, citing an increase in cash flows provided by operating activities totaling $1.52 billion in the first nine months of 2024, compared to $1.17 billion in the same period in 2023. However, others express concerns about the $524 million after-tax loss recorded from the sale of offshore wind investments, which could potentially impact future earnings growth.
Ownership Changes
Ownership changes have been notable, particularly with the recent sales to Ørsted and Global Infrastructure Partners (GIP). The adjusted gross proceeds from these sales amounted to $897 million, significantly impacting the capital structure. The company’s capital investments have also been revised upwards to $23.7 billion for the period 2024 to 2028, following the approval of the Electric Sector Modernization Plan (ESMP) in Massachusetts.
| Metric | Value |
|---|---|
| Cash Flows from Operating Activities (2024) | $1.52 billion |
| Cash Flows from Operating Activities (2023) | $1.17 billion |
| Adjusted Gross Proceeds from Wind Sales | $745 million |
| After-Tax Loss from Wind Investments | $524 million |
| Projected Capital Investments (2024-2028) | $23.7 billion |
| Market Reaction to Sunrise Wind Sale | +3.5% |
| Current Stock Price | $70 |
Eversource Energy (ES) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- Eversource Energy (ES) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Eversource Energy (ES)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Eversource Energy (ES)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.