| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 235.15 | n/a |
| Intrinsic value (DCF) | 1708.35 | n/a |
| Graham-Dodd Method | 43.22 | n/a |
| Graham Formula | 3106.90 | n/a |
Entergy New Orleans LLC (NYSE: ENJ) is a regulated electric and gas utility company headquartered in New Orleans, Louisiana. As a subsidiary of Entergy Corporation, ENJ specializes in the production, transmission, and distribution of electricity and natural gas to residential, commercial, and industrial customers in the New Orleans area. Operating in the highly regulated utilities sector, ENJ benefits from stable revenue streams underpinned by long-term rate structures approved by regulatory bodies. The company plays a critical role in regional energy infrastructure, ensuring reliable service while navigating the challenges of climate resilience and energy transition. With a market capitalization of approximately $170.7 million and a beta of 0.24, ENJ is positioned as a low-volatility investment, appealing to income-focused investors due to its consistent dividend payout of $1.25 per share. The utility sector's defensive nature and ENJ's essential service mandate make it a resilient player in economic downturns.
Entergy New Orleans LLC (ENJ) presents a conservative investment opportunity suited for income-oriented investors seeking stability in the regulated utilities sector. The company's low beta (0.24) indicates minimal correlation with broader market volatility, while its $1.25 annual dividend per share offers a yield that may appeal in low-interest-rate environments. However, investors should note the company's substantial total debt of $2.31 billion against negligible cash reserves, which could constrain financial flexibility. Revenue of $11.88 billion and net income of $1.06 billion in the latest period demonstrate operational scale, but the absence of reported capital expenditures raises questions about infrastructure investment transparency. Regulatory risks and exposure to climate-related disruptions in the Gulf Coast region are key considerations. The stock is likely best positioned as a defensive holding within a diversified portfolio.
Entergy New Orleans operates in a highly regulated monopoly environment, which inherently limits direct competition but subjects it to stringent regulatory oversight on rates and service quality. Its competitive advantage stems from exclusive service territory rights in New Orleans, creating a captive customer base with inelastic demand. The company's vertically integrated model—controlling generation, transmission, and distribution—provides operational control but requires significant capital investment. Compared to unregulated energy providers, ENJ benefits from guaranteed returns on equity approved by regulators (typically 9-10% for utilities), though this comes with earnings growth constraints. Its affiliation with Entergy Corporation provides economies of scale in fuel procurement and system operations. Key challenges include aging infrastructure modernization costs and increasing storm hardening expenditures in hurricane-prone regions. While renewable energy transitions pose long-term disruption risks, ENJ's regulated status mitigates competitive pressures from decentralized generation. The company's 0.24 beta underscores its defensive positioning relative to independent power producers exposed to merchant market volatility.