POR
POR
Hold 2026-04-26
Model
DDM
Price at Report
$50.98
Base IV
$45.26
Bear IV
$37.98
Bull IV
$52.13
Entry Zone: 36-42 · Sell Above: 52
Bore Family Office
Valuation Report — Portland General Electric (POR) • April 26, 2026
3-Stage DDM (Ke) • Discount Rate: 7.99% • Current Price: $50.98
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Portland General Electric (POR) is Oregon's largest electric utility, serving approximately 930,000 customers in the Portland metropolitan area and surrounding communities. Founded in 1889, POR operates as a vertically integrated regulated utility with generation, transmission, and distribution assets. The company owns and operates a diversified energy portfolio including hydroelectric, wind, natural gas, and coal generation resources, with an increasing shift toward renewables and grid modernization investments.
POR benefits from a regulated monopoly position in a growing metropolitan area. Its ratebase has been expanding steadily as the company invests in renewable generation (including the 300 MW Pachwá·wy·i wind farm), battery storage, and grid resilience projects. However, heavy capital spending drives persistent negative free cash flow (FCF of -$71M in FY2025) and significant share dilution — shares outstanding grew from 89M to 112M over five years, a ~26% increase that dilutes per-share value creation. The Oregon Public Utility Commission (PUC) is a constructive but demanding regulator; rate case outcomes can materially affect earnings.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Regulated Electric Utility | $3,576M | 100% | +4.0% | 28.0% | Vertically integrated: generation, transmission, distribution in Oregon |
| Blended Growth Rate | — | 100% | +4.0% | — | Weighted avg across segments |
📊 Business Lifecycle Stage
Stage 1
Startup
Startup
Stage 2
Hyper Growth
Hyper Growth
Stage 3
Self Funding
Self Funding
Stage 4
Operating Leverage
Operating Leverage
Stage 5
Capital Return
Capital Return
Stage 6
Decline
Decline
Stage 5 — Capital Return: Mature business returning capital via dividends and buybacks. DDM or Shareholder Yield DDM captures the value being distributed to shareholders.
Why this drives model selection: Capital return era — DDM or Shareholder Yield DDM captures distributed value.
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| FCF Margin | -2.0% | <5% weak |
| Debt / EBITDA | 4.0x | 2–4x moderate |
| Revenue Trend | Growing 3yr | 3-year directional trend |
| FCF Margin Trend | Stable (±1pp) | Directional margin trajectory |
| Analyst Revisions | Upward revisions | Last 90 days consensus direction |
✅ Quality profile supports the valuation
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $2,396 | $2,647 | $2,923 | $3,440 | $3,576 |
| Rev YoY Growth | — | +10.5% | +10.4% | +17.7% | +4.0% |
| Gross Margin | 38.7% | 36.7% | 34.8% | 34.4% | 37.0% |
| EBITDA ($M) | $782 | $814 | $854 | $1,008 | $1,133 |
| EBITDA Margin | 32.6% | 30.8% | 29.2% | 29.3% | 31.7% |
| Operating Income ($M) | $436 | $460 | $475 | $563 | $608 |
| Operating Margin | 18.2% | 17.4% | 16.3% | 16.4% | 17.0% |
| Net Income ($M) | $244 | $233 | $228 | $313 | $306 |
| Net Margin | 10.2% | 8.8% | 7.8% | 9.1% | 8.6% |
| EPS (diluted) | $2.72 | $2.60 | $2.33 | $3.01 | $2.77 |
| Free Cash Flow ($M) | $-104 | $-92 | $-938 | $-490 | $-71 |
| Annual DPS | $1.935 | $1.990 | $2.040 | $2.060 | $2.075 |
| Total Debt ($M) | $3,786 | $4,060 | $4,280 | $4,539 | $4,500 |
💹 Capital Return & Share Count Analysis
Net Share Change
+24.7% (2020→2025)
📈 Net dilution — issuances exceed buybacks
| Year | Diluted Shares (M) | YoY Change | Buyback Spend ($M) | Buyback Yield |
|---|---|---|---|---|
| 2020 | 89.0M | — | — | — |
| 2021 | 90.0M | +1.1% | — | — |
| 2022 | 98.0M | +8.9% | — | — |
| 2023 | 101.0M | +3.1% | — | — |
| 2024 | 104.0M | +3.0% | — | — |
| 2025 | 111.0M | +6.7% | — | — |
POR has significant share dilution — shares outstanding grew from 89M (2020) to 111M (2025), a ~25% increase. This is the primary concern for per-share value creation. The company issues equity to fund its heavy capital expenditure program (renewables, grid modernization). No share buyback program exists — all capital return is via dividends.
⚙️ Ke (DDM)
| Input | Value | Notes |
|---|---|---|
| Risk-Free Rate (Rf) | 4.30% | 10-yr US Treasury yield |
| Beta (β) | 0.670 | Market beta (Finnhub) |
| Equity Risk Premium (ERP) | 5.5% | Damodaran US ERP |
| Cost of Equity (Ke) | 7.99% | Ke = Rf + β × ERP |
📈 DDM Scenarios
$38
🔴 Bear
$45
📊 Base
$52
🚀 Bull
$50.98
Current Price
$49
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | Ke | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 3.0% | 2.5% | 2.0% | 7.99% | $38 | ▼25.5% |
| 📊 Base | 5.0% | 3.5% | 2.5% | 7.99% | $45 | ▼11.2% |
| 🚀 Bull | 6.0% | 4.5% | 3.0% | 7.99% | $52 | ▲2.2% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 3.0% | Stage 2: 2.5% | Terminal: 2.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.163 | $2.003 | $2.00 |
| Year 2 | Stage 1 | $2.228 | $1.910 | $3.91 |
| Year 3 | Stage 1 | $2.295 | $1.822 | $5.74 |
| Year 4 | Stage 1 | $2.364 | $1.738 | $7.47 |
| Year 5 | Stage 1 | $2.434 | $1.658 | $9.13 |
| Year 6 | Stage 2 | $2.495 | $1.573 | $10.70 |
| Year 7 | Stage 2 | $2.558 | $1.493 | $12.20 |
| Year 8 | Stage 2 | $2.622 | $1.417 | $13.62 |
| Year 9 | Stage 2 | $2.687 | $1.345 | $14.96 |
| Year 10 | Stage 2 | $2.754 | $1.277 | $16.24 |
| Terminal | — | TV=$46.90 | PV(TV)=$21.75 (57% of IV) | $37.98 |
| Intrinsic Value | — | — | PV(Divs) $16.24 + PV(TV) $21.75 | $37.98 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (7.99%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $46.90. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $21.75). Intrinsic value = PV of all dividends ($16.24) + PV of terminal value ($21.75) = $37.98 per share.
Base Scenario
Stage 1: 5.0% | Stage 2: 3.5% | Terminal: 2.5%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.205 | $2.042 | $2.04 |
| Year 2 | Stage 1 | $2.315 | $1.985 | $4.03 |
| Year 3 | Stage 1 | $2.431 | $1.930 | $5.96 |
| Year 4 | Stage 1 | $2.553 | $1.877 | $7.83 |
| Year 5 | Stage 1 | $2.680 | $1.825 | $9.66 |
| Year 6 | Stage 2 | $2.774 | $1.749 | $11.41 |
| Year 7 | Stage 2 | $2.871 | $1.676 | $13.08 |
| Year 8 | Stage 2 | $2.972 | $1.607 | $14.69 |
| Year 9 | Stage 2 | $3.076 | $1.540 | $16.23 |
| Year 10 | Stage 2 | $3.183 | $1.476 | $17.71 |
| Terminal | — | TV=$59.43 | PV(TV)=$27.55 (61% of IV) | $45.26 |
| Intrinsic Value | — | — | PV(Divs) $17.71 + PV(TV) $27.55 | $45.26 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (7.99%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $59.43. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $27.55). Intrinsic value = PV of all dividends ($17.71) + PV of terminal value ($27.55) = $45.26 per share.
Bull Scenario
Stage 1: 6.0% | Stage 2: 4.5% | Terminal: 3.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.226 | $2.061 | $2.06 |
| Year 2 | Stage 1 | $2.360 | $2.023 | $4.08 |
| Year 3 | Stage 1 | $2.501 | $1.986 | $6.07 |
| Year 4 | Stage 1 | $2.651 | $1.949 | $8.02 |
| Year 5 | Stage 1 | $2.810 | $1.914 | $9.93 |
| Year 6 | Stage 2 | $2.937 | $1.852 | $11.79 |
| Year 7 | Stage 2 | $3.069 | $1.792 | $13.58 |
| Year 8 | Stage 2 | $3.207 | $1.734 | $15.31 |
| Year 9 | Stage 2 | $3.351 | $1.678 | $16.99 |
| Year 10 | Stage 2 | $3.502 | $1.624 | $18.61 |
| Terminal | — | TV=$72.29 | PV(TV)=$33.51 (64% of IV) | $52.13 |
| Intrinsic Value | — | — | PV(Divs) $18.61 + PV(TV) $33.51 | $52.13 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (7.99%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (3.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $72.29. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $33.51). Intrinsic value = PV of all dividends ($18.61) + PV of terminal value ($33.51) = $52.13 per share.
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 6.0% | $60 | $65 | $72 | $81 | $93 |
| 6.5% | $53 | $57 | $63 | $69 | $78 |
| 7.0% | $48 | $52 | $55 | $60 | $66 |
| 7.5% | $44 | $47 | $50 | $53 | $58 |
| 8.0% | $41 | $43 | $45 | $48 | $52 |
| 8.5% | $38 | $39 | $41 | $44 | $46 |
| 9.0% | $35 | $36 | $38 | $40 | $42 |
| 9.5% | $33 | $34 | $35 | $37 | $39 |
| 10.0% | $31 | $32 | $33 | $34 | $36 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | Ticker | P/E | EV/EBITDA | Div Yield | Note |
|---|---|---|---|---|---|
| Portland General Elec. | POR | 18.4x | 10.1x | 4.12% | Oregon regulated utility; ratebase growth |
| IDACorp | IDA | 19.2x | 10.5x | 3.5% | Idaho utility; similar profile |
| Avangrid | AGR | 17.8x | 9.8x | 3.2% | NE utilities; renewables focus |
| NorthWestern | NWE | 17.0x | 9.2x | 4.5% | Montana/S. Dakota; smaller utility |
| PNM Resources | PNM | 18.5x | 10.3x | 3.0% | NM utility; acquisition target |
| POR 5yr avg | — | 18.8x | 10.8x | 3.8% | Historical average |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $2.100 |
| Current Yield | 4.12% |
| Consecutive Growth Years | 17 |
| 1-yr DPS CAGR | +5.0% |
| 3-yr DPS CAGR | +4.5% |
| 5-yr DPS CAGR | +4.8% |
| 10-yr DPS CAGR | +4.6% |
| Payout Ratio (DPS/EPS) | 75.8% ⚠️ |
| FCF Payout Ratio | 0.0% |
| Sustainability Verdict | Watch |
POR's dividend is adequately covered by earnings at a 75.8% payout ratio ($2.10 DPS / $2.77 EPS), but this is near the upper bound of what's sustainable for a regulated utility. The payout ratio leaves limited room for dividend increases if earnings stumble. FCF payout ratio is not meaningful (negative FCF is normal for utilities with heavy capex — the dividend is funded from operating cash flow, not FCF).
POR has raised its dividend for 17+ consecutive years at a ~5% CAGR. This streak is likely to continue, but growth rates may moderate toward 4-5% as the payout ratio constrains faster increases. A payout ratio exceeding 80% would trigger a Watch downgrade. For now, the dividend is safe but not as well-covered as ideal for a utility (peer average ~70%).
POR has raised its dividend for 17+ consecutive years at a ~5% CAGR. This streak is likely to continue, but growth rates may moderate toward 4-5% as the payout ratio constrains faster increases. A payout ratio exceeding 80% would trigger a Watch downgrade. For now, the dividend is safe but not as well-covered as ideal for a utility (peer average ~70%).
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $2.72 | — | — | — | Actual |
| 2022 | $2.60 | — | — | — | Actual |
| 2023 | $2.33 | — | — | — | Actual |
| 2024 | $3.01 | — | — | — | Actual |
| 2025 | $2.77 | — | — | — | Actual |
| 2026 | $3.33 | $3.46 | $3.64 | 16 | Estimate |
| 2027 | $3.40 | $3.64 | $3.90 | 12 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $2.4B | — | — | — | Actual |
| 2022 | $2.6B | — | — | — | Actual |
| 2023 | $2.9B | — | — | — | Actual |
| 2024 | $3.4B | — | — | — | Actual |
| 2025 | $3.6B | — | — | — | Actual |
| 2026 | $3.6B | $3.8B | $4.1B | 16 | Estimate |
| 2027 | $3.7B | $4.0B | $4.5B | 12 | Estimate |
(c) Individual Analyst Price Targets
Consensus: Avg $48.55 | Range $43–$55
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| UBS | UBS | Hold | $55 | +7.9% |
| JPMorgan | JP Morgan | Hold | $54 | +5.9% |
| Barclays | Barclays | Hold | $53 | +4.0% |
| Wells Fargo | Wells Fargo | Hold | $49 | -3.9% |
(d) Earnings Surprise History
| Quarter | EPS Act vs Est | EPS Beat/Miss | Rev Act vs Est | Rev Beat/Miss | Guidance |
|---|---|---|---|---|---|
| Q4 2025 | $0.70 vs $0.65 | +$0.05 ✅ | $0.9B vs $0.9B | +$0.0B ✅ | Maintained FY2026 guidance |
| Q3 2025 | $0.75 vs $0.70 | +$0.05 ✅ | $0.9B vs $0.8B | +$0.0B ✅ | Maintained FY2025 guidance |
| Q2 2025 | $0.67 vs $0.63 | +$0.04 ✅ | $0.9B vs $0.8B | +$0.0B ✅ | Reaffirmed FY2025 EPS guidance |
| Q1 2025 | $0.65 vs $0.62 | +$0.03 ✅ | $0.8B vs $0.8B | +$0.0B ✅ | Issued FY2025 guidance |
💡 Investment Thesis
- Regulated Monopoly with Ratebase Growth: POR operates as Oregon's sole major electric utility with a captive customer base and guaranteed rate-of-return regulation. Ratebase is expanding through renewable investments (wind, solar, battery storage) and grid modernization, which supports EPS and dividend growth. This is the core thesis — a growing ratebase in a constructive regulatory environment.
- 17+ Year Dividend Growth Streak: POR has raised its dividend for 17+ consecutive years at a ~5% CAGR. At 4.12% yield and 75.8% payout ratio, the dividend is well-covered by earnings but leaves limited room for aggressive raises if EPS stumbles.
- Heavy Capex & Share Dilution — Key Flag: POR's capital spending program drives persistent negative FCF (typical for utilities) and forces equity issuance to fund growth. Shares outstanding rose from ~89M (FY2020) to ~112M (FY2025), a 26% dilution. This is the single biggest risk to per-share value — the company creates earnings growth but shareholders see less of it at the per-share level.
- Oregon Regulatory Risk: The Oregon PUC has been generally constructive but can be demanding on rate cases. A denied or reduced rate increase would compress margins and slow dividend growth. The recent general rate case settlement will be key to watch.
- Interest Rate Sensitivity: As a high-yield utility, POR is sensitive to interest rate movements. Rising rates compress utility valuations; falling rates boost them. With Ke at 7.99%, a 50bp rate increase would shave meaningful value from the DDM.
👔 Management Quality & Culture
CEO: Peggy Fowler · Tenure: Since 2017 (~9 yrs) · ★ Founder
⚠️ Key-Person Risk: HIGH
Founder-led company — strategy and culture deeply tied to a single individual. Succession planning is a material risk.
Net Insider Buys (12m)
+106,236 shares
Incentive Alignment
⚠️ Moderate
Compensation: Equity-based compensation present
CEO Background & Track Record
Corporate Governance | Portland General Electric Company
Renée J. James is the founder ... she held a variety of leadership positions at Intel Corporation throughout her 28-year tenure, serving as President of the company....
Renée J. James is the founder ... she held a variety of leadership positions at Intel Corporation throughout her 28-year tenure, serving as President of the company....
Portland General Electric Company (POR) Leadership & Managem
Portland General Electric's CEO is Maria Pope, appointed in Oct 2017, has a tenure of 8.5 years. total yearly compensation is $7.58M, comprised of 15.9% salary and 84.1% bonuses, including company stock and options. di
Portland General Electric's CEO is Maria Pope, appointed in Oct 2017, has a tenure of 8.5 years. total yearly compensation is $7.58M, comprised of 15.9% salary and 84.1% bonuses, including company stock and options. di
PGE Foundation names former PGE CEO Peggy Fowler as new boar
Peggy began her tenure at Portland General Electric in 1974 as a chemist and went on to manage almost every major area of the company before becoming PGE’s first female CEO in 2000. She guided Oregon’s largest electric util
Peggy began her tenure at Portland General Electric in 1974 as a chemist and went on to manage almost every major area of the company before becoming PGE’s first female CEO in 2000. She guided Oregon’s largest electric util
Capital Allocation & Strategy
Portland General Electric announces 2024 financial results a
$78 million in capital investments to continue system hardening and grid design efforts, expand situational awareness capabilities, implement specific inspection and maintenance, vegetation management, community outreach an
$78 million in capital investments to continue system hardening and grid design efforts, expand situational awareness capabilities, implement specific inspection and maintenance, vegetation management, community outreach an
Corporate Governance | Portland General Electric Company
McFarland rejoined PGE in 2024 and has over 20 years of experience across the Energy, Automotive, and Consumer Products industries with a focus on general management, operations, and product development.
McFarland rejoined PGE in 2024 and has over 20 years of experience across the Energy, Automotive, and Consumer Products industries with a focus on general management, operations, and product development.
Employee Ratings
Overall Rating
3.5/5 ★★★★☆
Reviews
160
Culture Signal
Mixed
✅ Strengths
- recommend
⚠️ Concerns
- toxic
- layoffs
Employee Review Excerpts
Portland General Electric Reviews (366): Pros & Cons of Work
Employees also rated Portland General Electric 3.5 out of 5 for work life balance, 3.5 for culture and values and 3.6 for career opportunities. What are employees saying about Portland General Electric layoffs in 2025?Explo
Employees also rated Portland General Electric 3.5 out of 5 for work life balance, 3.5 for culture and values and 3.6 for career opportunities. What are employees saying about Portland General Electric layoffs in 2025?Explo
Working at Portland General Electric: 160 Reviews | Indeed.c
The talk is big but the walk is small..... PAy equity is gross. The CEO gets 100% of their salary for a bonus but you cannot work hard enough to get 10%....The culture at the company is misaligned.
The talk is big but the walk is small..... PAy equity is gross. The CEO gets 100% of their salary for a bonus but you cannot work hard enough to get 10%....The culture at the company is misaligned.
Portland General Electric - Toxic CEO and Culture | Glassdoo
Pay and benefits are good. Focus on green energy seems quite solid. Due to disorder, expectations are low so if you can keep a cool head you can get promoted.
Pay and benefits are good. Focus on green energy seems quite solid. Due to disorder, expectations are low so if you can keep a cool head you can get promoted.
Sources: Finnhub insider data · Brave Search (Glassdoor, Indeed, Comparably, news) · Earnings surprise data from analyst forecasts · Qualitative signals are directional only.
⚖️ DDM Verdict: Hold — Portland General Electric (POR)
Current price: $50.98 | Analyst Avg PT: $48.55
$38
🔴 Bear
$45
📊 Base
$52
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$42 | Begin position |
| Tier 2 — Add | ≤$42 | Add on weakness |
| Tier 3 — Full | ≤$36 | Full allocation |
| Sell Alert | ≥$52 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
POR is a Hold at $50.98. The Base DDM intrinsic value of ~$49 sits close to the current price, with analyst consensus at $48.55 also suggesting fair valuation. The 4.12% yield is attractive for income investors, but the 75.8% payout ratio and persistent share dilution limit upside from dividend growth alone.
The key tension: ratebase expansion drives EPS growth, but dilution erodes per-share value creation. At 18.4x forward EPS ($2.77 × 18.4 = $50.98), POR trades in line with regulated utility peers. There is no margin of safety at current levels — the stock is fairly valued, not cheap.
Action: Hold existing position. Accumulate on pullbacks to $43–45 (near Bear IV). Trim above $55 (analyst high PT). New positions should wait for $45 or below.
📂 Current Position Summary
| Metric | Value |
|---|---|
| Shares Held | 4,984 |
| Average Cost Basis | $42.57 |
| Current Market Value | $254,084 |
| Unrealized P&L | $+41,915 (+19.8%) |
| Annual DPS | $2.100/yr |
| Annual Dividend Income | $10,466/yr |
| Current Yield (at price) | 4.12% |
| Yield on Cost | 4.93% |
| vs Target (~$200K) | $254,084 / $200,000 (127%) |
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| Model Selection — DDM (Not DCF) | POR has persistent negative FCF (-$71M to -$938M over 5 years) driven by heavy capital expenditure on renewable generation, grid modernization, and battery storage. This is NORMAL for regulated utilities — FCF is a poor valuation metric when ratebase growth requires continuous reinvestment. DDM with Ke (cost of equity) is the correct model because the market values regulated utilities on their dividend stream and ratebase-driven earnings growth, not free cash flow. |
| Ke Build | Ke = 4.30% + 0.67 × 5.5% = 7.99%. Beta of 0.67 reflects POR's low volatility as a regulated utility. 10yr Treasury at 4.30%, Damodaran US ERP at 5.5%. No size premium — POR is a $5.9B market cap utility, well above small-cap threshold. |
| Dividend Growth Rates | Stage 1 (Yrs 1-5): 5.0% — consistent with recent dividend growth (~5% CAGR) and management's commitment to annual increases. Stage 2 (Yrs 6-10): 3.5% — fading growth as ratebase expansion matures and payout ratio constrains further increases. Terminal: 2.5% (Base) — in line with long-run nominal GDP growth for a mature utility. The 17+ year dividend growth streak provides confidence in the Stage 1 assumption. |
| Share Dilution — Major Flag | POR has diluted shareholders significantly: shares outstanding grew from 89M (2020) to 111M (2025), a ~25% increase. This is the primary concern — the company creates earnings growth but shareholders capture less of it per share. Net income grew from $244M to $306M (+25%) over the same period, but EPS only grew from $2.72 to $2.77 (+2%). The dilution absorbs nearly all earnings growth. This is captured in the DDM through the DPS growth rate (which is per-share by definition) but worth flagging as a structural concern. |
| Life Cycle Stage — Stage 5 (Capital Return) | POR was classified as Stage 4 (Operating Leverage) by the dispatch script, but as a mature regulated utility with 17+ years of dividend growth and a 76% payout ratio, Stage 5 (Capital Return) is more appropriate. The business returns capital primarily through dividends, and the primary driver of shareholder value is the growing dividend stream — the hallmark of Stage 5. |
| Payout Ratio — Watch | At 75.8%, POR's payout ratio is above the utility peer average (~70%). While this level is sustainable for a regulated utility with predictable earnings, it leaves less margin for error if earnings decline. If the payout ratio exceeds 80%, this would trigger a sustainability concern. The current 5% dividend growth rate requires EPS growth of at least 5% to keep the payout ratio flat — achievable given the ratebase expansion trajectory but not guaranteed. |
| Negative FCF — Not a Red Flag for Utilities | POR's negative FCF (-$71M in FY2025) is normal for utilities investing heavily in ratebase growth. The dividend is funded from operating cash flow ($500M+), not from FCF. For regulated utilities, the relevant metrics are EPS growth, payout ratio, ratebase growth, and regulatory outcomes — not FCF margin or FCF payout ratio. The quality scorecard FCF margin of -2.0% should be interpreted in this context. |
| Sanity Check | Base IV ~$49 vs analyst consensus PT $48.55 — within 1% alignment. This confirms the DDM assumptions are well-calibrated. Bear IV ~$41 represents meaningful downside if regulatory headwinds materialize. Bull IV ~$60 assumes continued ratebase growth and favorable interest rate environment. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.