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?
霍華德馬克斯說得很好,“與其擔心股價波動,‘永久性損失的可能性才是我擔心的風險……我認識的每個實踐投資者都會擔心這一點。’因此,聰明的投資者知道,債務——通常涉及破產——是評估公司風險時非常重要的因素。需要注意的是,Pinnacle West Capital Corporation(NYSE:PNW)確實負債。 但是這些債務是否對股東構成擔憂呢?
When Is Debt Dangerous?
債務何時有危險?
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.
債務可以幫助業務,直到業務因新資本或自由現金流而無法償還爲止。資本主義的組成部分是“創造性破壞”過程,在這個過程中,銀行家們無情地清算失敗的企業。然而,更頻繁(但仍然昂貴)的情況是,一家公司必須以低廉的價格發行股票,永久稀釋股東權益,以鞏固其資產負債表。當然,債務可以成爲企業的重要工具,特別是對於重資本的企業來說。當我們審查債務水平時,首先考慮現金和債務水平。
What Is Pinnacle West Capital's Net Debt?
Pinnacle West Capital的淨債務是什麼?
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.
您可以單擊下面的圖形以查看歷史數據,但是截至2024年3月,Pinnacle West Capital的債務總額爲92.1億美元,比一年前的84.7億美元增加了近10億美元。由於沒有多少現金,因此淨債務基本相同。
![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的資產負債表有多強?
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.
從最近的資產負債表可以看出,Pinnacle West Capital在一年內到期的負債爲30.6億美元,到期時間超過一年的負債爲155億美元。抵消這些義務,它的現金爲963萬美元,以及到期時間爲12個月的應收賬款價值573.0萬美元。因此,其負債超過其現金和(短期)應收賬款的總和180億美元。
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.
這種赤字讓這家860億美元的公司像一個龐然大物一樣籠罩着。因此,我們會密切關注它的資產負債表,毫無疑問。畢竟,如果Pinnacle West Capital今天必須償還債務,它很可能需要進行大規模再資本化。
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).
爲了衡量公司相對於其收益的債務情況,我們計算其淨負債除以利息、稅項、折舊和攤銷前收益(EBITDA)和其利息支出除以利息前收益(EBIT)的比例(其利息覆蓋率)。這種方法的優點是,我們既考慮了債務的絕對量(淨負債與 EBITDA),又考慮到了與該債務相關的實際利息支出(其利息覆蓋率)。
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股東面臨的一個問題是高淨債務與息稅前利潤倍數(5.2),以及相對薄弱的利息覆蓋率,因爲息稅前利潤僅爲利息支出的2.5倍。這裏的債務負擔很重。幸運的是,在過去一年中,Pinnacle West Capital的息稅前利潤增長了8.7%,緩慢地縮小了相對於收益的債務。毫無疑問,我們從資產負債表中了解到債務的大部分內容。但是,未來收益相比其他任何內容更能決定Pinnacle West Capital保持健康資產負債表的能力。因此,如果您關注未來,您可以查看這份免費報告,其中顯示了分析師的盈利預測。
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.
但我們最終的考慮也很重要,因爲公司不能用紙上利潤支付債務;它需要冷酷的現金。因此,我們總是檢查其中多少EBIT轉化爲自由現金流。過去三年,Pinnacle West Capital的自由現金流出現了實質性的負面增長。雖然這可能是爲了擴張而進行的支出,但它確實使得債務更加危險。
Our View
我們的觀點
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.
坦白地說,Pinnacle West Capital將EBIT轉換爲自由現金流以及在總負債方面保持領先地位的記錄使我們對其債務水平感到不安。但至少它在增長EBIT方面做得相當不錯;這是鼓舞人心的。我們還應該注意,像Pinnacle West Capital這樣的公用股公司通常會毫無問題地使用債務。在考慮了討論過的數據點之後,我們認爲Pinnacle West Capital的債務過多。這種風險對於一些公司是可以接受的,但它肯定不會引起我們的興趣。資產負債表顯然是您在分析債務時要關注的領域。但最終,每個公司都可能存在資產負債表之外的風險。例如,我們發現Pinnacle West Capital存在2個警告信號,您需要注意,其中1個無法忽略。
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.
說到底,有時候更容易集中精力關注根本不需要債務的公司。讀者可以免費訪問零淨債務增長股票列表。
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