SSE PLC
🇬🇧 SSE.LSE · London · GB0007908733
Utilities
GBX 2728.00 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
34.0
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: 2728.00 ÷ 80.12 = 34.0
TTM period through: 2025-09-30
Forward P/E (estimated): 14.9
Based on analyst estimates
Reference: Provider P/E (Trailing): 31.4
Yield (Fwd)
2.35%
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): 2.41%
Net Debt/EBITDA (TTM)
3.2x
Latest quarter: 8.1x
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: 2025-09-30
Latest quarter (2025-09-30): 8.1x
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)
79.9%
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): 72.3%
Cash Flow Payout (TTM): 24.2%
FCF Coverage (TTM): -1.36x
ROE
8.8%
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
13.9x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
SSE PLC operates high-quality, essential electricity networks, but its massive capital expenditure requirements for the energy transition make it unsuitable for conservative income strategies. With a yield of just 2.41%, negative free cash flow, and a history of strategic dividend cuts to fund growth, the income stream lacks the required stability. Not recommended for new positions as better yield and coverage opportunities exist elsewhere in the sector.
Sector Context
SSE PLC is a major UK utility operator providing essential electricity networks and developing critical renewable energy infrastructure. While regulated utilities typically offer stable, predictable cash flows ideal for dividend investing, companies undergoing massive capital-intensive green energy transitions often see their dividend profiles disrupted by funding needs.
Temporary Opportunity Identified
Historical negative earnings driven by non-cash fair value movements on energy derivatives, masking underlying operational performance, coupled with a heavily capital-intensive transition phase.
📊 Strategy Analysis
- • Operates critical, essential electricity network infrastructure in the UK, providing a solid foundational business model.
- • Debt levels remain manageable for a regulated utility, with Net Debt/EBITDA at 3.16x and Debt/Equity at 0.81x.
⚠ What to Watch
- • Dividend yield of 2.41% falls below the strategy's minimum 3.0% threshold.
- • Significant capital expenditures for the energy transition have resulted in negative free cash flow (-£720.4M), leaving the dividend uncovered by operational cash.
- • Trailing P/E of 34.05x is significantly elevated, trading well above the strategy's 8-15x target range.
- • History of multiple strategic dividend rebases (cuts) to fund capital investments makes the income stream unreliable for conservative dividend investors.
📊 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: 2026-04-05
Disclaimer: This information is for educational purposes only. Not financial advice.