Investment Thesis
NSTAR Electric demonstrates severely weakened financial health with critical liquidity constraints (0.52x current ratio), minimal profitability relative to asset base (0.1% ROA), and dangerously low interest coverage (1.3x) indicating debt service stress. Operating cash flow of $103.8M barely covers capital expenditures of $98.7M, leaving minimal free cash flow of $5.1M for dividends, debt reduction, or growth investments.
Strengths
- Positive operating income of $24.6M and modest net income growth (+1.6% YoY)
- Moderate debt-to-equity ratio of 0.55x suggests leverage is not at extreme levels
- Operating cash flow of $103.8M provides some liquidity from operations
Risks
- Critical liquidity crisis: current ratio of 0.52x well below 1.0x indicates immediate solvency concerns
- Extremely poor returns on assets (0.1%) and equity (0.2%) suggest capital is deployed inefficiently
- Interest coverage of 1.3x indicates limited buffer to service $1.2B long-term debt; minimal margin for operational disruption
Key Metrics to Watch
- Current ratio trend - any further decline below 0.50x signals distress
- Interest coverage ratio - must improve above 2.0x for financial stability
- Free cash flow sustainability - ability to maintain 5.1M+ FCF to service debt obligations
Financial Metrics
Revenue
N/A
Net Income
3.9M
EPS (Diluted)
$0.00
Free Cash Flow
5.1M
Total Assets
6.8B
Cash
9.1M
Profitability Ratios
Gross Margin
N/A
Operating Margin
N/A
Net Margin
N/A
ROE
0.2%
ROA
0.1%
FCF Margin
N/A
Balance Sheet & Liquidity
Current Ratio
0.52x
Quick Ratio
0.49x
Debt/Equity
0.55x
Debt/Assets
0.0%
Interest Coverage
1.31x
Long-term Debt
1.2B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-04-03T20:28:10.276085 |
Data as of: 2012-03-31 |
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