RWE AG
🇩🇪 RWE.XETRA · Frankfurt · DE0007037129
Utilities
EUR 54.52 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
16.9
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 54.52 ÷ 3.23 = 16.9
TTM period through: 2026-03-31
Forward P/E (estimated): 21.8
Based on analyst estimates
Reference: Provider P/E (Trailing): 16.9
Yield (Fwd)
2.20%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 2.10%
Div. Growth (5Y CAGR)
6.3%
Growth Streak
2 yrs
Consecutive years of increase
Net Debt/EBITDA (TTM)
1.6x
Latest quarter: 11.4x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2026-03-31
Latest quarter (2026-03-31): 11.4x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
37.2%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 25.8%
Cash Flow Payout (TTM): 21.5%
FCF Coverage (TTM): -3.58x
ROE
6.8%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
6.9x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
📊 What Changed From Last Analysis?
Moved from WATCH to CAUTION due to materializing geopolitical and regulatory execution risks (halted U.S. offshore wind, €10B capex cut), which combined with the sub-3% yield and massive negative FCF, cement this as a strategy mismatch for conservative dividend investors.
Summary
RWE AG is a major European utility undergoing a massive structural transition from legacy fossil fuels to renewable energy. While the stock trades at an attractive P/FFO multiple relative to its cash flows, recent regulatory hurdles in the U.S. offshore wind market forcing a €10 billion capex cut highlight the severe execution risks involved in its pivot. Given the low 2.1% dividend yield, massive negative free cash flow, and heightened transition uncertainty, this stock is not recommended for conservative dividend portfolios despite the valuation discount.
Sector Context
RWE AG is a major European utility that generates and trades electricity, currently undergoing a massive structural transition from legacy fossil fuels to renewable energy. While utilities traditionally offer stable, regulated cash flows suitable for dividend investing, companies undergoing complete energy transitions carry significant execution risk and heavy capital expenditure burdens that can pressure dividend sustainability.
Temporary Opportunity Identified
Recent quarterly net losses were driven by non-cash impairment charges related to the accelerated coal phase-out and accounting adjustments for pension provision interest rates, rather than a collapse in core operating cash flows.
📊 Strategy Analysis
- • Trades at a seemingly attractive P/FFO of 9.21, reflecting a discounted valuation relative to the underlying cash generation of its utility assets.
- • Maintains a solid balance sheet with Net Debt/EBITDA of 1.6x, providing necessary financial flexibility to manage its massive transition and legacy decommissioning liabilities.
- • Management has demonstrated operational resilience in its core European generation and trading businesses, partially offsetting the declining legacy coal and nuclear segments.
⚠ What to Watch
- • Current dividend yield of 2.1% falls well below typical income strategy requirements, compounded by massive negative free cash flow (-€4.1B) driven by transition capital expenditures.
- • Recent U.S. political shifts forced a halt on offshore wind activities and a €10 billion reduction in green capital expenditure, highlighting severe regulatory and execution risks in its growth strategy.
- • The company carries immense structural liabilities, including €6.2 billion for open-cast mine recultivation and €4.5 billion for nuclear decommissioning, which remain heavily exposed to inflation and climate risks.
- • The ongoing legal mandate to phase out German coal by 2030 creates definitive asset stranding risk, fundamentally altering the legacy business model.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-05-30
Disclaimer: This information is for educational purposes only. Not financial advice.