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New Zealand Stock Update: Meridian Energy Ltd

Meridian Energy is a vertically integrated renewable electricity generator, accounting for a third of New Zealand’s total electricity output. The firm enjoys a strong competitive position, and we rate it as having a narrow economic moat as a result of cost advantages and barriers to entry. Accordingly, we expect Meridian Energy and the other incumbent energy providers to generate solid returns above the cost of capital in the long term. That said, from time to time, Meridian will be affected by adverse hydrological conditions, owing to deficient rainfall and/or inadequate snow  melt. Therefore,  the firm’s margins and earnings will remain more volatile than those of its peers.

Price: $5.19

Mkt Cap: $13,301m

P.E Ratio: 39.5

Gross Dividend Yield: 4.70%

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