Capital Clean Energy Carriers (CCEC) recently sold 12 container vessels, raised about US$472.2 million in net proceeds, and redirected that capital into gas transportation assets, including newbuilding LNG carriers on long-term charters.
See our latest analysis for Capital Clean Energy Carriers.
Despite the recent asset sales and LNG charter wins, the share price is around US$20.21 with a 30 day share price return of about an 11% decline. The 1 year total shareholder return of 5.67% and 3 year total shareholder return of about 7x point to earlier momentum that has cooled in the short term.
If CCEC’s pivot toward gas infrastructure has caught your attention, it may be worth widening the lens and checking out 26 power grid technology and infrastructure stocks
So with CCEC trading at about US$20.21 after a recent 11% slide, while sitting on a US$3.1b charter backlog and increasing gas exposure, is this a reset that opens up value, or is the market already pricing in future growth?
Preferred P/E of 10.5x: Is it justified?
On a P/E of 10.5x at a last close of $20.21, CCEC screens cheaper than the broader US market, yet richer than its Shipping peers and direct peer set.
The P/E ratio compares the current share price with earnings per share and is a quick way of seeing how much investors are paying for each dollar of earnings. For a company like CCEC, with shipping assets and long term charters, this often reflects how confident the market is in the durability of current earnings and future growth.
Here, the numbers pull in different directions. CCEC is described as good value relative to an estimated fair P/E of 19.8x, a level the market could move toward if earnings forecasts and quality hold up. At the same time, the stock is flagged as expensive versus the US Shipping industry average of 8.7x and a peer average of 5x. This suggests the current price already bakes in stronger growth or resilience than many competitors.
Explore the SWS fair ratio for Capital Clean Energy Carriers
Result: Price-to-Earnings of 10.5x (ABOUT RIGHT)
However, there are still risks, including execution missteps in the LNG buildout and any setback to earnings, which could challenge a P/E premium to shipping peers.
Find out about the key risks to this Capital Clean Energy Carriers narrative.
Another view on value
While a 10.5x P/E looks reasonable compared with a fair ratio of 19.8x, the SWS DCF model presents a tougher picture, with an estimated future cash flow value of about $13.80 per share versus the current $20.21. That suggests potential overvaluation based on cash flows, so which signal is more important for your analysis?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Capital Clean Energy Carriers for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 49 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
With mixed signals across earnings, cash flows, risks and rewards, it makes sense to move quickly, review the facts yourself and weigh up the 4 key rewards and 2 important warning signs.
Looking for more investment ideas?
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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