Public Service Enterprise Group Inc (PEG)
Interest coverage
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 3,829,000 | 4,125,000 | 4,093,000 | 3,412,000 | 1,630,000 | 1,214,000 | -1,106,000 | -1,446,000 | -518,000 | -583,000 | 2,364,000 | 3,167,000 | 2,901,000 | 2,888,000 | 2,623,000 | 2,182,000 | 2,519,000 | 2,167,000 | 2,243,000 | 2,450,000 |
| Interest expense (ttm) | US$ in thousands | 748,000 | 728,000 | 706,000 | 671,000 | 628,000 | 584,000 | 565,000 | 562,000 | 571,000 | 584,000 | 589,000 | 593,000 | 600,000 | 605,000 | 603,000 | 589,000 | 569,000 | 552,000 | 532,000 | 506,000 |
| Interest coverage | 5.12 | 5.67 | 5.80 | 5.08 | 2.60 | 2.08 | -1.96 | -2.57 | -0.91 | -1.00 | 4.01 | 5.34 | 4.84 | 4.77 | 4.35 | 3.70 | 4.43 | 3.93 | 4.22 | 4.84 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $3,829,000K ÷ $748,000K
= 5.12
Public Service Enterprise Group Inc.'s interest coverage ratio has shown a consistent improvement from Q1 2022 to Q4 2023. The ratio has steadily increased, indicating that the company's ability to cover its interest expenses with operating income has strengthened over time. This upward trend is a positive signal for investors and creditors, suggesting that the company is better positioned to make its interest payments.
The interest coverage ratio was relatively low in Q1 and Q2 2022, indicating a potential risk of financial distress in meeting interest obligations. However, the ratio improved significantly in the subsequent quarters, reaching levels above 5 in the last two quarters of 2023. This signifies that Public Service Enterprise Group Inc. has sufficient operating income to comfortably cover its interest expenses, providing a buffer against any adverse financial challenges.
Overall, the improving trend in the interest coverage ratio reflects positively on the company's financial health and its ability to manage debt obligations. It demonstrates the company's ability to generate enough earnings to service its debt, reducing the risk of default and enhancing investor confidence.
Peer comparison
Dec 31, 2023