Breaking Down Public Service Enterprise Group Incorporated (PEG) Financial Health: Key Insights for Investors

You're looking at Public Service Enterprise Group Incorporated (PEG) because you want to know if their regulated utility story still holds up in a high-rate environment, and the short answer is: yes, but the growth is hard-won. The company just narrowed its 2025 non-GAAP Operating Earnings guidance to the upper half of the range, projecting $4.00 to $4.06 per share, which is a solid 9% increase at the midpoint over 2024, but that stability is anchored by a massive infrastructure commitment. They plan to pour $3.8 billion into regulated investments this year alone, part of a staggering $21 billion to $24 billion regulated capital program through 2029, all while maintaining a strong balance sheet with around $3.6 billion in total available liquidity as of September 30, 2025. This focus on the utility side (Public Service Electric and Gas Company, or PSE&G) is defintely the core value driver, promising a predictable 6% to 7.5% compound annual growth rate (CAGR) in the rate base, which is why analysts have a consensus Moderate Buy rating with an average 12-month price target of $91.19. Still, you need to understand the regulatory mechanics and financing costs that offset some of that growth, so let's break down the financial health and see where the real risks and opportunities lie.

Revenue Analysis

You're looking for a clear picture of where Public Service Enterprise Group Incorporated (PEG) actually makes its money, and the answer is simple: it's a regulated utility story now, with a strong nuclear backbone. The near-term financial health is solid, driven by infrastructure investments that are already paying off in higher delivery revenues.

The company's trailing twelve months (TTM) revenue, ending September 30, 2025, reached Breaking Down Public Service Enterprise Group Incorporated (PEG) Financial Health: Key Insights for Investors, totaling approximately $11.718 billion. This marks a significant year-over-year increase of 12.35%. This growth is a strong reversal from the 2024 annual revenue decline of 8.43%, showing the strategic shift to a predominantly regulated model is gaining traction.

Primary Revenue Sources and Segment Contribution

Public Service Enterprise Group Incorporated operates primarily through two reportable segments, which define its revenue streams: the highly regulated utility business and the competitive power generation arm.

• PSE&G (Public Service Electric and Gas Co.): This is the transmission and distribution utility, serving 2.4 million electric and 1.9 million natural gas customers in New Jersey. It is the stable, regulated core of the business.
• PSEG Power & Other: This segment is the energy supply company, focused on competitive energy sales, primarily from its fleet of carbon-free, baseload nuclear power generating units.

Here's the quick math on the segment performance for the second quarter (Q2) of 2025, which gives us the clearest recent breakdown:

The utility segment, PSE&G, is the defintely largest contributor to operating revenue, which is what you want to see from a predominantly regulated infrastructure company.

Analysis of Revenue Stream Changes

The most significant change driving the 2025 revenue growth is regulatory. The PSE&G segment's 9% revenue jump in Q2 2025 was directly attributed to higher delivery revenues. This stems from the new electric and gas base distribution rates that went into effect in October 2024, following the settlement of its distribution base rate case. The new rates allow the company to recover a return on over $3 billion in previous capital investments.

On the PSEG Power side, the 34% revenue increase in Q2 2025 was driven by higher generation and gas supply revenues. This segment's performance benefits from its nuclear fleet, which supplied 7.9 TWh of reliable, carbon-free energy in Q3 2025. The higher generation volume also reflects the absence of a major refueling outage that occurred in the prior year. The company is executing a massive, regulated capital investment plan of $21 billion to $24 billion from 2025 to 2029, which is the long-term engine for sustained revenue growth in the core utility business.

Profitability Metrics

You need to know if Public Service Enterprise Group Incorporated (PEG) is turning its substantial revenue into solid profit, especially with the shift to a predominantly regulated business model. The short answer is yes, PEG is showing strong, stable profitability, driven primarily by favorable rate case settlements and operational focus on its regulated utility, Public Service Electric and Gas Company (PSE&G).

Looking at the Trailing Twelve Months (TTM) ending September 30, 2025, PEG generated $11.13 billion in revenue. This is the base for our profitability check, and the margins demonstrate effective cost control in a capital-intensive sector. Here's the quick math on the key profit layers:

• Gross Profit (TTM): $3.96 billion (a 35.6% margin).
• Operating Profit (TTM): $2.71 billion (a 24.3% margin).
• Net Profit (TTM): $1.98 billion (a 17.78% margin).

The company is defintely converting sales into earnings efficiently.

Margin Trends and Operational Efficiency

PEG's profitability ratios have been robust, which is typical of a regulated utility where earnings are more predictable. The current TTM Gross Margin of 35.6% is a clear indicator of strong cost management, especially considering the utility sector's inherent costs of fuel and purchased power. This margin has fluctuated over the years, but the core regulated business provides a stable foundation for the operating and net margins.

The key driver for the near-term trend is the October 2024 base rate case settlement for PSE&G, which is providing an expected incremental impact for the full year 2025, boosting regulated distribution revenue. The company is guiding its full-year 2025 non-GAAP Operating Earnings to the upper half of the range, at $4.00 to $4.06 per share, with the consensus estimate close to the midpoint at $4.03 per share. This is a 5% to 7% long-term compound annual growth rate (CAGR) target through 2029, which is a very clear signal of management's confidence in their capital investment plan.

What this estimate hides is the impact of higher financing costs and the capital-intensive nature of their $3.8 billion regulated capital spending program for 2025, which focuses on infrastructure modernization and load growth.

Industry Comparison: Where PEG Stands

When you compare PEG's margins to the broader Utilities Sector, you see a slight difference in the Gross Profit Margin (Gross Margin). The average Gross Profit Margin for the Utilities Sector is around 42.3%. PEG's TTM Gross Margin of 35.6% is lower, but this is a common nuance in the utility space, as the calculation can be heavily influenced by the mix of regulated delivery versus non-regulated power generation and how fuel costs are passed through to customers.

The more telling comparison for a regulated entity is often the Net Margin, which at 17.78% TTM, is very healthy. For a growth-adjusted valuation metric, the Price/Earnings-to-Growth (PEG) ratio for PEG is 2.46. This is significantly higher than the average PEG for Electric Utilities, which sits around 11.02, suggesting investors are paying a premium for PEG's perceived safety, regulated growth, and dividend yield, or that the growth rate assumption is conservative. Still, for a utility, a high PEG is not always a red flag, but a sign of high expectation for stable, predictable earnings growth.

For a deeper dive into who is buying and selling this stock and why, you should check out: Exploring Public Service Enterprise Group Incorporated (PEG) Investor Profile: Who's Buying and Why?

Your next step should be to look closely at the segment-level operating income, specifically the regulated PSE&G segment, to confirm the stability of this core profit engine.

Debt vs. Equity Structure

You need to know how Public Service Enterprise Group Incorporated (PEG) is funding its massive regulated infrastructure plan, and the short answer is: mostly through debt, but in a very controlled, utility-standard way. The company's capital structure is intentionally debt-heavy, reflecting the stable, predictable cash flow from its predominantly regulated utility business, Public Service Electric and Gas Company (PSE&G).

As of September 30, 2025, Public Service Enterprise Group Incorporated's total debt stood at approximately $23.37 billion, against a total stockholders' equity of about $17.01 billion. This mix is typical for a capital-intensive utility, but you still want to see the breakdown and the management behind it.

Here's the quick math on their debt components:

• Long-Term Debt (including current portion): $22.54 billion
• Commercial Paper and Loans (Short-Term Debt): $829 million

The company is defintely managing its short-term exposure; variable rate debt was only around 3% of total debt as of June 30, 2025. That's a clean one-liner on risk management.

The Debt-to-Equity (D/E) ratio for Public Service Enterprise Group Incorporated sits at approximately 1.37 ($23.37 billion / $17.01 billion). This ratio is well within the expected range for a utility. Capital-intensive sectors like utilities and industrials naturally carry higher D/E ratios because they fund large, long-life assets with reliable, regulated revenue streams, so they can handle more debt. The company's consolidated debt-to-capitalization ratio was 58% as of September 30, 2025, which is a key metric the rating agencies watch closely.

Public Service Enterprise Group Incorporated actively manages its debt to lock in favorable rates and terms. For example, in May 2025, PSEG Power issued $1.5 billion in senior unsecured debt, using the proceeds to repay a $1.25 billion variable-rate term loan. This move reduced interest rate risk and extended maturities, a smart financial play in a volatile rate environment. The new issuance included 5-year notes at 5.2% and 10-year notes at 5.75%.

The company's credit profile remains solid, which is crucial for a utility. PSEG Power's issuer credit ratings are Baa2 with a Stable Outlook from Moody's and BBB with a Stable Outlook from S&P, reflecting this stability. Their financing strategy balances this debt capacity with equity funding by focusing on capital investment that is self-funded through retained earnings and cash flow. The management team has stated they expect to fund their entire $22.5 billion to $26 billion regulated capital investment program through 2029 without needing to issue new equity or sell assets. This commitment means less shareholder dilution, which is a major plus for investors.

For a deeper dive into who is buying Public Service Enterprise Group Incorporated's shares and why, you should check out Exploring Public Service Enterprise Group Incorporated (PEG) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You need to know if Public Service Enterprise Group Incorporated (PEG) can cover its near-term bills, especially with its massive capital plan. The short answer is yes, they can, but their liquidity position is tight, which is typical for a regulated utility that prioritizes long-term infrastructure investment over a large cash cushion.

As of late 2025, the company's liquidity ratios show a balanced, but not overly conservative, position. The Current Ratio is approximately 1.00, meaning current assets essentially equal current liabilities. For the quarter ending September 2025, this was even tighter at 0.93. The Quick Ratio-which strips out less liquid assets like inventory-is lower at 0.76. This tells you that without selling inventory, they have less than a dollar of highly liquid assets for every dollar of short-term debt. It's a tight ship, but it's defintely manageable for a utility with predictable revenue streams.

• Current Ratio: 1.00 (Tight, but standard for utilities)
• Quick Ratio: 0.76 (Shows reliance on inventory/receivables)
• Working Capital: Balanced, not built for excess cash on hand

Working capital trends reflect the company's long-term, capital-intensive strategy. They don't keep a huge pile of cash on the balance sheet because they are constantly deploying it into infrastructure. This focus is clear in their commitment to a $22.5 billion to $26 billion capital spending plan through 2029. The capital requirements are primarily met by internal cash flow and debt, not new equity, which is a key strength for shareholders.

Here's the quick math on cash flow for the first half of 2025 (six months ended June 30):

The strong Cash Flow from Operating Activities (CFO) of $1,527 million in the first half of 2025 is the engine of their financial health. This cash is immediately recycled into Investing Activities (CFI), which saw a $1,388 million outflow for capital expenditures like grid modernization. The net change in cash was a positive $61 million over that period. The real strength here is the predictability of their operating cash flow, which is crucial for a regulated entity. For a deeper look at the full financial picture, check out our full report on Breaking Down Public Service Enterprise Group Incorporated (PEG) Financial Health: Key Insights for Investors.

What this estimate hides is the potential risk of high leverage, which some analysts have flagged, alongside a history of negative free cash flow, as the investment pace accelerates. Still, the company's solid balance sheet and commitment to funding its capital program without issuing new equity until 2029 provides a strong vote of confidence in their financial discipline and ability to manage their debt load.

Valuation Analysis

You are looking at Public Service Enterprise Group Incorporated (PEG) and wondering if the price you pay today is fair, and honestly, that's the right question to ask. The short answer is that PEG is trading at a slight premium to its historical averages, but it is largely considered fairly valued by the market right now, leaning toward a 'Moderate Buy' consensus.

When you break down the core valuation metrics, you see a utility company priced for steady, regulated growth, not a deep-value play. Here's the quick math on the key ratios, using the most recent 2025 fiscal year data.

• Price-to-Earnings (P/E) Ratio: At 19.78 (as of November 19, 2025), PEG is trading above the utility sector's long-term average. This signals investors are willing to pay more for each dollar of earnings, likely due to the stability of its regulated utility business, Public Service Electric and Gas Company (PSE&G).
• Price-to-Book (P/B) Ratio: The P/B ratio stands at approximately 2.43 (as of November 14, 2025). This means the stock price is more than double the company's book value (assets minus liabilities), which is typical for a capital-intensive utility with strong, long-lived assets and reliable cash flow.
• Enterprise Value-to-EBITDA (EV/EBITDA): This metric, which factors in debt, is at 13.90 (as of November 15, 2025). This is a bit higher than the median for the company's historical range, suggesting the market is valuing its operating performance (earnings before interest, taxes, depreciation, and amortization) robustly.

What this estimate hides is the company's focus on regulated transmission and distribution, which provides highly predictable revenue. That stability is what you're paying a premium for, defintely.

Near-Term Price Action and Analyst View

The stock has shown resilience over the last 12 months, trading in a range between a $74.67 low and a $95.22 high. As of mid-November 2025, the stock price is hovering around $82.84, putting it closer to the lower end of that range. This suggests a potential opportunity if you believe the stock will re-test its 52-week high.

The Wall Street consensus is a Moderate Buy rating, with a general optimism driven by the company's updated FY 2025 earnings guidance of $4.00 to $4.06 Earnings Per Share (EPS). Analysts have set an average 12-month price target between $91.19 and $92.75, indicating a forecasted upside of over 10% from the current price. This is a strong signal that the street sees a clear path for capital appreciation.

Dividend Health: A Core Utility Play

For income-focused investors, the dividend story is compelling. Public Service Enterprise Group Incorporated pays an annual dividend of $2.52 per share, resulting in a current yield of 3.04%. The company has a 14-year track record of dividend growth, which speaks volumes about management's commitment to shareholder returns.

The payout ratio (the percentage of earnings paid out as dividends) is a healthy 63.64% based on trailing earnings. This level is sustainable and leaves enough retained earnings for the company to reinvest in its regulated infrastructure projects, like the PSEG Power clean energy initiatives. So, you get a solid income stream plus capital for future growth.

If you want to dig deeper into who is buying and why, you should check out Exploring Public Service Enterprise Group Incorporated (PEG) Investor Profile: Who's Buying and Why?

Risk Factors

You're looking at Public Service Enterprise Group Incorporated (PEG)'s financial health, and honestly, the risks for a utility of this scale always map to regulation, Mother Nature, and the cost of keeping the lights on. The near-term focus, especially in the 2025 fiscal year, is on how well they convert potential growth into actual revenue, plus the ever-present regulatory uncertainty in New Jersey.

Public Service Enterprise Group Incorporated is executing a massive capital plan, but that effort is exposed to three clear areas of risk: regulatory shifts, market volatility, and a specific, near-term growth uncertainty around new, large-scale customer demand.

External and Regulatory Pressures

The biggest external risk is the regulatory environment, which is a constant for any utility. Public Service Enterprise Group Incorporated faces ongoing legal and environmental matters that could impact their financial stability. For example, adverse changes in state and federal regulations-especially those tied to climate change and energy efficiency-could impose new costs or limit the company's ability to recover its substantial investments.

Also, the political rhetoric in New Jersey about electric bill affordability picked up in 2025, which can translate into pressure on the Board of Public Utilities (BPU) to deny or delay rate case approvals. That's a real headwind for their planned capital expenditure (CapEx) recovery. The company's $3.8 billion regulated investment program for 2025 is on track, but its ability to earn a return on that CapEx hinges on favorable regulatory outcomes.

• Regulatory Risk: Changes in energy laws could limit cost recovery.
• Market Risk: Wholesale power and natural gas price fluctuations hurt margins.
• Climate Risk: Severe weather events threaten operational reliability.

Operational and Strategic Risks from 2025 Filings

Looking at the recent Q3 2025 filings, the strategic risk is fascinating: it centers on the massive surge in demand from potential new customers, like data centers. While large load connection requests jumped 47% quarter-over-quarter, management is being realistic, estimating only a 10% to 20% chance that these inquiries convert into committed utility customers. Here's the quick math: if only 10% convert, a large chunk of anticipated revenue growth is simply not going to materialize, forcing a potential downward revision of long-term earnings estimates.

Another operational risk lies in their nuclear fleet. Operating nuclear facilities carries inherent risks, including compliance with the Atomic Energy Act and the potential for increased nuclear fuel storage costs. Plus, grid reliability challenges in the mid-Atlantic region are a concern, as lingering resource adequacy issues could drive up Public Service Enterprise Group Incorporated's operating costs.

Mitigation Strategies and Clear Actions

The company isn't just sitting still; they have clear mitigation plans. To manage the regulatory and climate risk, they are heavily focused on their Clean Energy Future-Energy Efficiency II program, which authorizes $2.9 billion in projects from 2025 to 2027. This investment aligns with state policy, which should help secure favorable regulatory treatment.

On the nuclear side, they are optimizing their assets, like extending the Hope Creek unit's fuel cycle from 18 to 24 months. This boosts operational efficiency and reduces refueling outage frequency, which defintely helps manage costs. They are also actively pursuing multi-year agreements to contract their nuclear output, which provides stable, predictable cash flows to offset wholesale market volatility.

If you want a deeper dive into the numbers that support these strategies, check out Breaking Down Public Service Enterprise Group Incorporated (PEG) Financial Health: Key Insights for Investors.

Next Step: Portfolio Manager: Assess your Public Service Enterprise Group Incorporated position's exposure to New Jersey regulatory lag by Friday.

Growth Opportunities

You're looking for a clear path forward for Public Service Enterprise Group Incorporated (PEG), and the story is simple: it's a regulated utility play, so growth is driven by capital spending on essential infrastructure, not flashy new products. The company's financial health allows it to execute a massive, multi-year plan without diluting your stake.

For the 2025 fiscal year, the company is guiding non-GAAP Operating Earnings per share (EPS) in the range of $3.94 to $4.06, with the consensus estimate sitting right at about $4.01. That midpoint represents an approximately 9% increase over 2024 results, which is defintely solid for a utility. We're not looking for explosive tech-stock growth here, but predictable, high-quality earnings. That's the utility trade.

Capital Investment: The Primary Growth Engine

The single biggest driver of future revenue and earnings is the regulated capital investment program. For 2025, Public Service Enterprise Group Incorporated is on track to invest approximately $3.8 billion in regulated capital spending. Here's the quick math: regulated utilities earn a return on their rate base (the value of their assets), so more investment equals a larger rate base and, in turn, higher allowed earnings.

The five-year plan (2025-2029) is even more telling, with a raised capital spending target of $22.5 billion to $26 billion, with $21 billion to $24 billion allocated to regulated investments. This aggressive spending is expected to drive a compound annual growth rate (CAGR) in non-GAAP Operating Earnings of 5% to 7% through 2029.

Strategic Initiatives and Competitive Edge

The capital is flowing into specific areas that align with state and federal clean energy policy, which provides regulatory support and a clear path to cost recovery. The key initiatives are focused on resilience and efficiency:

• Infrastructure Modernization: Upgrading the electric and gas systems for safety and reliability.
• Clean Energy Future: Rolling out the second phase of the Energy Efficiency II program.
• Load Growth: Responding to a quarterly increase in large load inquiries, especially from data centers, which will expand the customer base.

Plus, the company's carbon-free nuclear fleet, which is 3,758 MW of generating capacity, is a huge competitive advantage. This nuclear output benefits from the Production Tax Credits (PTC) in the Inflation Reduction Act, with an estimated threshold price of $44.75/MWh, providing stable, long-term revenue. This stability is what underpins the company's ability to fund its massive capital program without issuing new equity or selling assets through 2029.

Financial Projections Snapshot

The growth is steady, not spectacular, but it's predictable. The forecast annual revenue growth rate for the 2025-2027 period is a measured 3.01%, with 2025 revenue projected at approximately $11.718 billion. The regulated business model, which makes up over 90% of the capital allocation, is the ultimate competitive moat. You can find a more in-depth analysis of the balance sheet in Breaking Down Public Service Enterprise Group Incorporated (PEG) Financial Health: Key Insights for Investors.

Next step: Check your portfolio's current weighting to utilities and decide if this predictable, regulated growth profile fits your risk-return needs.