Stock Analysis & Valuation Entergy Mississippi, Inc. 1M BD 66 (EMP)

• Previous Close: $20.90
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, $	Upside, %
Artificial intelligence (AI)	n/a	n/a
Intrinsic value (DCF)		n/a
Graham-Dodd Method	46.04	120
Graham Formula	1339.69	6310

Strategic Investment Analysis

Company Overview

Entergy Mississippi, Inc. (NYSE: EMP) is a regulated electric utility subsidiary of Entergy Utility Holding Company, LLC, serving retail and wholesale customers in Mississippi. The company generates, transmits, and distributes electricity primarily from coal and solar sources, while also providing gas services. Incorporated in 2018 and headquartered in Jackson, Mississippi, Entergy Mississippi plays a critical role in the state's energy infrastructure, ensuring reliable power delivery to residential, commercial, and industrial customers. As part of the broader Entergy Corporation (ETR) family, it benefits from economies of scale and regulatory support typical of the utilities sector. With a market capitalization of approximately $174 million, Entergy Mississippi operates in a stable, regulated environment, offering investors predictable cash flows and dividend income. The company's strategic focus on diversifying its energy mix with solar power aligns with broader industry trends toward renewable energy adoption.

Investment Summary

Entergy Mississippi presents a low-risk investment opportunity typical of regulated utilities, characterized by stable revenue streams, moderate growth, and consistent dividend payouts (currently $0.6125 per share). Its beta of 0.28 indicates lower volatility compared to the broader market, appealing to conservative investors. However, the company faces challenges from high total debt ($28.9B) and substantial capital expenditures ($5.8B), which may pressure cash flows. Regulatory risks and the transition away from coal-dependent generation could also impact long-term profitability. The stock is best suited for income-focused portfolios seeking defensive exposure to essential services.

Competitive Analysis

Entergy Mississippi operates as a regulated monopoly in its service territory, granting it a stable customer base with limited direct competition. Its primary competitive advantage stems from its vertically integrated operations (generation to distribution) and regulatory cost recovery mechanisms. However, its reliance on coal (a declining energy source) creates long-term transition risks compared to peers with cleaner generation portfolios. The company's solar investments are a step toward diversification but lag behind some regional competitors in renewable penetration. Its affiliation with Entergy Corporation provides shared resources and economies of scale, though this also means strategic decisions are influenced by parent-level priorities. Unlike unregulated utilities, Entergy Mississippi cannot compete for customers outside its designated service area, limiting growth opportunities but ensuring predictable returns. Its competitive positioning is strongest in reliability and local regulatory relationships rather than innovation or cost leadership.

Major Competitors

• Southern Company (SO): Southern Company dominates the Southeastern U.S. utility market with a larger scale and more diversified generation (including nuclear and renewables). Its Georgia Power subsidiary is a leader in solar capacity, outpacing Entergy Mississippi's renewable efforts. However, SO faces higher regulatory scrutiny due to cost overruns at its Vogtle nuclear plant.
• NextEra Energy (NEE): NextEra is the U.S. leader in renewable energy (wind/solar) through its FPL subsidiary and competitive energy arm. While not a direct competitor in Mississippi, its clean energy transition success highlights Entergy Mississippi's slower pace in decarbonization. NEE's growth profile is far more aggressive but comes with higher valuation multiples.
• Entergy Corporation (ETR): Entergy Mississippi's parent company operates utilities across multiple Southern states. ETR's broader geographic diversification reduces state-specific risks, but its subsidiaries (including EMP) share similar challenges in coal phase-outs and storm resilience costs. ETR offers investors exposure to the entire Entergy system rather than Mississippi alone.
• CenterPoint Energy (CNP): CenterPoint serves adjacent markets with a stronger focus on gas distribution and transmission. Its multi-state footprint provides more balanced regulatory exposure compared to Entergy Mississippi's single-state concentration. CNP's recent infrastructure investments position it better for energy transition but with higher capital demands.