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