Entergy Corporation Shareholders Have Experienced a 16% CAGR Over the Last Five Years, with EPS Growth at 5.1% and Total Shareholder Return at 113%.

Entergy Corporation (NYSE:ETR) shareholders have earned a 16% CAGR over the last five years, with a 78% increase in share price over that time. The company's EPS growth was 5.1% per year, lower than the 12% average annual increase in share price. Dividends have boosted the total shareholder return to 113% over five years, exceeding the share price return. The company's TSR is 60% over the last twelve months, including dividends.

Entergy Corporation (NYSE: ETR) has demonstrated robust financial performance over the past five years, with shareholders enjoying a 16% compound annual growth rate (CAGR). This has translated into a 78% increase in share price, driven by a 5.1% annual earnings per share (EPS) growth rate. Despite the lower EPS growth compared to the share price increase, dividends have significantly boosted total shareholder return (TSR) to 113% over five years, outpacing the share price return. Over the last twelve months, including dividends, the TSR has been 60% [1].

The company's second quarter (Q2) 2025 earnings report highlighted a strong performance, with total revenues up 12.7% year-over-year (YoY) to $3.33 billion and net income surging 856.9% YoY to $467.9 million. Industrial sales increased by 12% YoY, and the company anticipates a growth rate of 13% annually over the next four years. Entergy's capital plan has been upgraded to include an additional $3 billion, bringing the total to $40 billion for the period 2025-2028. This plan focuses on industrial growth and investments in green energy [1].

Entergy's strategic investments in green energy and infrastructure are evident in its recent projects. The company is constructing three power plants in North Louisiana to support Meta's largest data center, which is expected to consume 10 GW of power. Additionally, Entergy plans to develop two 1,207 MW capacity combined cycle gas turbines (CCCTs) in Texas with hydrogen capabilities, with a final decision expected in Q3 2025 and operational readiness by 2028 [1].

Valuation analysis using the price-to-earnings growth (PEG) ratio shows that Entergy's forward PEG ratio is 2.60X, and its forward P/E ratio is 23.11X. The forward EPS growth rate is 8.9%, aligning with the company's updated EPS outlook for 2027-2028. The forward stock price is calculated at $123.64, indicating a 35.66% undervaluation compared to the current stock price of $91.14 [1].

Comparing Entergy with its peers, Xcel Energy Inc. (XEL) and Exelon Corporation (EXC) are trading at fair value, while NRG Energy, Inc. (NRG) is slightly overvalued. Entergy's annual dividend yield of 2.68% is higher than NRG's 1.05% but lower than XEL's 3.10% [1].

Risks associated with Entergy include potential declines in earnings and profitability, which could negatively impact the share price. Operating expenses have been high, taking up almost 75% of revenue in Q2 2025. However, the company's strong capital plan and positive earnings guidance suggest a positive outlook for 2026 [1].

References:
[1] https://seekingalpha.com/article/4809268-entergy-why-i-am-buying-after-updated-demand-outlook-into-2026