Is Pinnacle West Capital (NYSE:PNW) Using Too Much Debt?
Is Pinnacle West Capital (NYSE:PNW) Using Too Much Debt?
Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.' So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. Importantly, Pinnacle West Capital Corporation (NYSE:PNW) does carry debt. But is this debt a concern to shareholders?
霍华德马克斯说得很好,“与其担心股价波动,‘永久性损失的可能性才是我担心的风险……我认识的每个实践投资者都会担心这一点。’因此,聪明的投资者知道,债务——通常涉及破产——是评估公司风险时非常重要的因素。需要注意的是,Pinnacle West Capital Corporation(NYSE:PNW)确实负债。 但是这些债务是否对股东构成担忧呢?
When Is Debt Dangerous?
债务何时有危险?
Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. When we examine debt levels, we first consider both cash and debt levels, together.
债务可以帮助业务,直到业务因新资本或自由现金流而无法偿还为止。资本主义的组成部分是“创造性破坏”过程,在这个过程中,银行家们无情地清算失败的企业。然而,更频繁(但仍然昂贵)的情况是,一家公司必须以低廉的价格发行股票,永久稀释股东权益,以巩固其资产负债表。当然,债务可以成为企业的重要工具,特别是对于重资本的企业来说。当我们审查债务水平时,首先考虑现金和债务水平。
What Is Pinnacle West Capital's Net Debt?
Pinnacle West Capital的净债务是什么?
You can click the graphic below for the historical numbers, but it shows that as of March 2024 Pinnacle West Capital had US$9.21b of debt, an increase on US$8.47b, over one year. Net debt is about the same, since the it doesn't have much cash.
您可以单击下面的图形以查看历史数据,但是截至2024年3月,Pinnacle West Capital的债务总额为92.1亿美元,比一年前的84.7亿美元增加了近10亿美元。由于没有多少现金,因此净债务基本相同。
![debt-equity-history-analysis](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240609/0-89dd074e6c4774559473bb5c620cf162-0-ba947d39353a35bc7001869a62427580.png/big)
How Strong Is Pinnacle West Capital's Balance Sheet?
Pinnacle West Capital的资产负债表有多强?
We can see from the most recent balance sheet that Pinnacle West Capital had liabilities of US$3.06b falling due within a year, and liabilities of US$15.5b due beyond that. Offsetting these obligations, it had cash of US$9.63m as well as receivables valued at US$573.0m due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by US$18.0b.
从最近的资产负债表可以看出,Pinnacle West Capital在一年内到期的负债为30.6亿美元,到期时间超过一年的负债为155亿美元。抵消这些义务,它的现金为963万美元,以及到期时间为12个月的应收账款价值573.0万美元。因此,其负债超过其现金和(短期)应收账款的总和180亿美元。
This deficit casts a shadow over the US$8.60b company, like a colossus towering over mere mortals. So we'd watch its balance sheet closely, without a doubt. After all, Pinnacle West Capital would likely require a major re-capitalisation if it had to pay its creditors today.
这种赤字让这家860亿美元的公司像一个庞然大物一样笼罩着。因此,我们会密切关注它的资产负债表,毫无疑问。毕竟,如果Pinnacle West Capital今天必须偿还债务,它很可能需要进行大规模再资本化。
In order to size up a company's debt relative to its earnings, we calculate its net debt divided by its earnings before interest, tax, depreciation, and amortization (EBITDA) and its earnings before interest and tax (EBIT) divided by its interest expense (its interest cover). The advantage of this approach is that we take into account both the absolute quantum of debt (with net debt to EBITDA) and the actual interest expenses associated with that debt (with its interest cover ratio).
为了评估公司的债务与收益的关系,我们计算净债务除以息税折旧及摊销前利润(EBITDA),以及利息费用除以息税前利润(EBIT)(其利息覆盖率)。这种方法的优点是我们同时考虑到债务的绝对量(以净债务/EBITDA计算),以及与债务相关的实际利息费用(以利息覆盖率计算)。
Pinnacle West Capital shareholders face the double whammy of a high net debt to EBITDA ratio (5.2), and fairly weak interest coverage, since EBIT is just 2.5 times the interest expense. The debt burden here is substantial. Fortunately, Pinnacle West Capital grew its EBIT by 8.7% in the last year, slowly shrinking its debt relative to earnings. There's no doubt that we learn most about debt from the balance sheet. But it is future earnings, more than anything, that will determine Pinnacle West Capital's ability to maintain a healthy balance sheet going forward. So if you're focused on the future you can check out this free report showing analyst profit forecasts.
Pinnacle West Capital股东面临的一个问题是高净债务与息税前利润倍数(5.2),以及相对薄弱的利息覆盖率,因为息税前利润仅为利息支出的2.5倍。这里的债务负担很重。幸运的是,在过去一年中,Pinnacle West Capital的息税前利润增长了8.7%,缓慢地缩小了相对于收益的债务。毫无疑问,我们从资产负债表中了解到债务的大部分内容。但是,未来收益相比其他任何内容更能决定Pinnacle West Capital保持健康资产负债表的能力。因此,如果您关注未来,您可以查看这份免费报告,其中显示了分析师的盈利预测。
But our final consideration is also important, because a company cannot pay debt with paper profits; it needs cold hard cash. So we always check how much of that EBIT is translated into free cash flow. Over the last three years, Pinnacle West Capital saw substantial negative free cash flow, in total. While that may be a result of expenditure for growth, it does make the debt far more risky.
但我们最终的考虑也很重要,因为一家公司无法通过纸上利润偿还债务;它需要分文不差的现金。因此,我们经常检查多少Ebit被转化为自由现金流。在过去三年中,Pinnacle West Capital的负现金流累计巨大。虽然这可能是出于增长的支出,但它确实使债务风险更大。
Our View
我们的观点
To be frank both Pinnacle West Capital's conversion of EBIT to free cash flow and its track record of staying on top of its total liabilities make us rather uncomfortable with its debt levels. But at least it's pretty decent at growing its EBIT; that's encouraging. We should also note that Electric Utilities industry companies like Pinnacle West Capital commonly do use debt without problems. After considering the datapoints discussed, we think Pinnacle West Capital has too much debt. That sort of riskiness is ok for some, but it certainly doesn't float our boat. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately, every company can contain risks that exist outside of the balance sheet. Case in point: We've spotted 2 warning signs for Pinnacle West Capital you should be aware of, and 1 of them can't be ignored.
坦白地说,Pinnacle West Capital将EBIT转换为自由现金流以及在总负债方面保持领先地位的记录使我们对其债务水平感到不安。但至少它在增长EBIT方面做得相当不错;这是鼓舞人心的。我们还应该注意,像Pinnacle West Capital这样的公用股公司通常会毫无问题地使用债务。在考虑了讨论过的数据点之后,我们认为Pinnacle West Capital的债务过多。这种风险对于一些公司是可以接受的,但它肯定不会引起我们的兴趣。资产负债表显然是您在分析债务时要关注的领域。但最终,每个公司都可能存在资产负债表之外的风险。例如,我们发现Pinnacle West Capital存在2个警告信号,您需要注意,其中1个无法忽略。
When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free, right now.
说到底,有时更容易关注那些甚至不需要债务的公司。读者可以免费查看零净债务增长股票列表,立即获得。
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