XEL, Xcel Energy Inc
Read top to bottom, the owner's questions in the order an owner asks them: what the business is, whether the record holds, whether it survives and is any good, and what you would be paying. New to the questions? Start with the Method.
The business in brief
read the 10-K →What this business is and what moves its needle, read from the numbers in its filings. The quantitative detail is in the sections below; the verdict is left to you.
- What it is
- A capital-intensive business, run on heavy physical assets that have to be kept working.
- Situation
- Capital build-out. capital spending has surged to 95% of sales, today's earnings are charged less depreciation than tomorrow's will be.
- What moves the needle
- How hard the assets work, and what the inputs cost. What decides it: utilization, how much of the capex merely keeps the assets running, and what a downturn does to a heavy fixed-cost base.
- Is it a good business?
- Return on capital has rarely cleared the cost of capital (median 6%, above 15% in 0 of 10 years). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the 10-K is where you look.
Every line here is arithmetic from the company's own filings, not a model's opinion, and each figure appears in full in the sections below.
The record, 2009–2018
realized figures from each filing, no estimates| 2009’09 | 2010’10 | 2011’11 | 2012’12 | 2013’13 | 2014’14 | 2015’15 | 2016’16 | 2017’17 | 2018’18 | TTMTTMSep 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| RevenueRevenue | $9.6B | $10.3B | $10.7B | $10.1B | $10.9B | $11.7B | $11.0B | $11.1B | $11.4B | $11.5B | $11.6B |
| Operating marginOp. mgn | 15.2% | 15.7% | 16.7% | 18.0% | 16.9% | 16.7% | 18.1% | 20.2% | 19.5% | 17.0% | 22.9% |
| Net incomeNet inc. | $681M | $756M | $841M | $905M | $948M | $1.0B | $984M | $1.1B | $1.1B | $1.3B | $2.1B |
| EPS (diluted)EPS | $1.49 | $1.63 | $1.73 | $1.85 | $1.91 | $2.03 | $1.94 | $2.21 | $2.26 | $2.47 | $3.34 |
| Owner earningsOwner earn. | $1.9B | $1.2B | $2.4B | $2.0B | ($811M) | ($540M) | ($645M) | ($143M) | ($118M) | ($835M) | ($7.2B) |
| ROICROIC | 6% | 6% | 7% | 6% | 6% | 6% | 6% | 6% | 6% | 6% | 5% |
| CapexCapex | $0 | $732M | $0 | $0 | $3.4B | $3.2B | $3.7B | $3.2B | $3.2B | $4.0B | $11.9B |
| Capex / revenueCapex/rev | 0.0% | 7.1% | 0.0% | 0.0% | 31.1% | 27.4% | 33.4% | 28.8% | 28.4% | 34.3% | 102.9% |
| Capex vs depreciationCapex/dep | 0.00× | 0.84× | 0.00× | 0.00× | 3.39× | 3.09× | 3.22× | 2.42× | 2.17× | 2.39× | 3.98× |
| Total debtDebt | $7.9B | $9.3B | $8.8B | $10.1B | $10.9B | $11.5B | $12.4B | $14.2B | $14.5B | $15.8B | $35.8B |
| Cash & investmentsCash+inv | $116M | $108M | $61M | $82M | $107M | $80M | $85M | $85M | $83M | $147M | $1.8B |
| Net debt / (cash)Net debt | $7.8B | $9.2B | $8.8B | $10.1B | $10.8B | $11.4B | $12.3B | $14.1B | $14.4B | $15.7B | $34.0B |
Owner’s Scorecard
Will it survive?
- ThinOperating income $2.6B ÷ interest expense $1.5B
Operating profit covers interest, but with little room. A bad year, a refinancing at higher rates, or a revenue wobble closes the gap fast.
- How heavy is the debt? 12.4×HighTotal debt $32.1B ÷ operating income $2.6B
Years of operating profit it would take to repay all debt. A first read, not a credit rating: it's gross debt (not netted against cash) over EBIT (not EBITDA), and a cyclical year distorts it.
- Debt, net of cash $32.0BHeavy net debtCash $129M − debt $32.1B
Netting $129M of cash and short-term investments against $32.1B of debt leaves $32.0B owed, about 12.4× a year's operating profit, versus the gross figure above. Net debt is the leverage figure that matters; the gross ratio above ignores the cash already set against it. Strategic or illiquid investments aren't counted here.
- Negative, funded by othersDSO 42 + DIO 58 − DPO 218 days
Days cash is tied up between paying suppliers and collecting from customers. A negative cycle is a quiet moat: suppliers and customers fund the operation (Buffett's “float”), the company grows on other people's money.
Is it a good business?
- Below averageNOPAT $2.6B ÷ invested capital $55.6B (debt + equity − cash)
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; below ~8% the company may destroy value as it grows. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- Consumes cashOwner Earnings ($6.8B) = operating cash $4.1B − capex $10.9B
What an owner could take out without starving the business. That's -59% of revenue. Treating stock comp as the real expense it is (less $46M of SBC) leaves ($6.9B). Honest caveat: capex here blends maintenance and growth, so steady-state Owner Earnings may run higher (see capex vs. depreciation).
- Cash-backedCash from ops $4.1B ÷ net income $2.0B
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- No surplus to allocate
The business didn't generate positive Owner Earnings this year, so any distributions came from the balance sheet or borrowing, not from operations.
- Investing or harvesting? 3.68×ExpandingCapex $10.9B ÷ depreciation $3.0B
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Durability & moat, 2009–2018
A moat is a high return that doesn’t fade, reinvested at high returns. Here is what the record says, judgments, not another chart of the numbers.
- Profitable years 10 of 10
Never lost money over the record, the earnings stability Graham insisted on.
- Return on capital ≥ 15% 0 of 10 yrs
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin 15% (FY2009) → 17% (FY2018)
Margins held roughly steady across the record.
- Reinvestment, incremental ROIC 5%
Reinvested capital earned only a modest return, growth is getting expensive.
- Worst year 2009 · 15.2% op. margin
Stayed profitable even in its hardest year, the resilience that survives recessions.
- Share count +1.2%/yr
The share count is rising, dilution works against you on a per-share basis.
- Dividend record rising
Paid and raised the dividend across the record, the continuity Graham prized.
Solvent is not the same as cheap; growing is not the same as good. These are vital signs, not a verdict, the judgment is yours, and the filing is one click away.
How the cash was used, 2009–2018
Over the record, the business generated $25.8B of operating cash, and how management split it is, as Buffett insists, the job that matters most. Here it reads as a reinvestor, most operating cash is plowed back into the business.
- Reinvested$21.4B · 83%
- Dividends$5.6B · 22%
- Buybacks$55M · 0%
It reinvested $21.4B (83%) back into the business and returned $5.7B (22%) to owners, $5.6B in dividends, $55M in buybacks. Total debt rose $27.9B across the span. It returned and reinvested more than it generated, the gap was covered by debt or existing cash.
Buybacks are gross of stock issued to employees; net of that, the real return to owners is lower (see Management & pay). And the mix alone doesn't grade management, what matters is the return earned on the dollars reinvested (see incremental ROIC in the durability report).
Management & pay
read the proxy →Two questions Buffett actually asks about pay: is stock compensation, a real expense, whatever the income statement pretends, quietly large, and is the top wildly out of line with the floor. He's no populist about it; he just wants pay that's rational and earned, and comp committees that aren't lapdogs.
- CEO pay ratio108:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio isn't proof of anything, some businesses are genuinely top-heavy in scarce skill, but a runaway figure is where Buffett starts asking whether the board is doing its job or just keeping the chair company.
- Stock-based compensation$46M
The slice of the business handed to employees in shares this year, 0% of revenue, equal to 2% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. And note the trap, the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
Graham’s defensive-investor test
4 of 6 metGraham gave the defensive investor seven numerical criteria in The Intelligent Investor. Here they are, run mechanically on the filings, his framework, not our verdict. Meeting them is a floor of safety, not a reason to buy; missing one is no veto, since many fine modern businesses fail his strictest liquidity tests by design. The worth is in seeing exactly where a company stands against the canon, every number sourced.
- Adequate size PassRevenue ≥ $2B · $11.5B
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity MissCurrent ratio ≥ 2× · 0.71×
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt MissDebt ≤ working capital · $32.1B vs ($2.1B) WC
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Earnings stability PassA profit every year (10-yr record) · no losses
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record PassUninterrupted dividends · paid every year (10)
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth PassEarnings +33% over the record · +55%
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Earnings are $3.43/share and book value $40.08/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Graham would be the first to say a checklist is a starting point, not an answer. These are his defensive, bargain-hunter's tests, the cigar-butt lens. Buffett and Munger grew past it, paying fair prices for wonderful businesses; that lens lives in the moat and owner-earnings work above, and both still matter. Clearing Graham’s tests earns a closer look; failing them earns harder questions, not a dismissal.
What the price implies
reverse-DCFOwner earnings are negative today, so the usual reverse-DCF has nothing to grow. But that's exactly when a price makes its boldest promise. So we flip the question: type a price, and see the future profitability you'd have to believe to justify it.
Enter a price to run it.
It flips the reverse-DCF: the company must reach owner earnings that, valued at a mature multiple and discounted back at your rate, equal today's market cap, shown as the margin it must earn on revenue grown at your rate, from negative today. For a deep cyclical at a trough, normalized through-cycle earnings are the better lens; this is for the genuinely unprofitable.
What the filing emphasizes, FY2025
read the 10-K →Each year a 10-K must name what could go wrong, in the company's own words. Here are the ones Graham and Buffett would stop on, each set against the figure from the same filings that bears on it, anchored to a period you can find in the record above. We point; the judgment is yours.
- Customer concentrationRisk Factors
Who the revenue leans on. When one buyer is a large slice of sales, that buyer holds the pricing power, and its troubles become the company's.
“Recovery Mechanisms Mechanism Additional Information Colorado Energy Plan Adjustment Recovers the early retirement costs of Comanche Units 1 and 2 to a maximum of 1% of the customer's bill.”
From the recordRevenue exposed (TTM)$11.6B - Supplier & input dependenceRisk Factors
A choke point upstream. A sole or limited supplier can dictate terms, and a single shortage can stop the line.
“Other Supply Chain Xcel Energy's ability to meet customer energy requirements, growing customer demand, respond to storm-related disruptions, and execute our capital expenditure program are dependent on maintaining an efficient supply chain.”
From the recordGross-margin cushion (TTM)67% - Debt terms & refinancingRisk Factors
The fine print behind the debt. Covenants and near-term maturities decide who is really in control when a year goes badly.
“The term loan includes one financial covenant, requiring Xcel Energy's consolidated funded debt to total capitalization ratio to be less than or equal to 70 percent.”
From the recordBalance sheet (TTM)$32.0B heavy net debt · interest covered 1.8× - Litigation & contingenciesRisk Factors
Claims an owner inherits. Most disclosure is boilerplate; this fires only on an actual matter, a named suit, a settlement, a contingency, a number.
“The complaints, which assert claims on behalf of one or more plaintiffs, generally allege that SPS' equipment ignited the Smokehouse Creek Fire Complex and seek compensation for losses resulting from the fire, asserting various causes of action under Texas law.”
A judgment, not a number, weigh it against the filing yourself. - Regulation & policyRisk Factors
Rules that can rewrite the economics, tariffs, antitrust, data, export controls.
“In September 2025, the CPUC authorized a process for company-owned and PPA resources to seek up to 15% relief for tariff impacts to projects.”
A judgment, not a number, weigh it against the filing yourself.
What changed, FY2025 vs FY2024
read the 10-K →Most of a 10-K is boilerplate carried over verbatim; the signal is in what's new. These lines appear this year and weren't there last, figure updates filtered out, so only the language shift remains.
- “The following table provides a reconciliation of GAAP earnings (net income) to ongoing earnings: (Millions of Dollars) 2025 2024 GAAP net income $ 2,018 $ 1,936 Sherco Unit 3 2011 outage refunds — 47 Marshall Wildfire litigation (a) 298 — Less: tax effect of adjustments (77) (13) Ongoing earnings (b…”
- “The VaRs for the NSP-Minnesota and PSCo commodity trading operations, excluding both non-derivative transactions and derivative transactions designated as normal purchases and normal sales, calculated on a consolidated basis using a Monte Carlo simulation with a 95% confidence level and a one-day ho…”
- “When applicable, fuel cost over-recoveries (the excess of fuel revenue billed to customers over fuel costs incurred) are deferred as regulatory liabilities and under-recoveries (the excess of fuel costs incurred over fuel revenues billed to customers) are deferred as regulatory assets.”
- “PSCo — GAAP earnings decreased $0.24 per share and ongoing earnings increased $0.14 per share for 2025 (difference in GAAP and ongoing due to Marshall Wildfire settlement in 2025, see Non-GAAP Financial Measures for reconciliation from GAAP to ongoing earnings).”
Classic text analysis over the filing itself, no model wrote a word of this, and every quote is the company's own.
Peers, Utilities
The same industry, side by side on owner economics, compare, don't rank by a single number.● marks best in the group.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| EDConsolidated Edison Inc | $17.0B | — | 17.2% | 5% | 2% |
| SRESempra | $12.4B | — | 32.8% | 5% | -49% |
| PEGPublic Service Enterprise Group Inc | $12.2B | 75% | 24.5% | 7% | 0% |
| XELXcel Energy Inc | $11.5B | 67% | 22.4% | 5% | -59% |
| WECWEC Energy Group, Inc. | $9.8B | 67% | 22.9% | 6% | 7% |
| AEEAmeren Corp | $8.8B | — | 23.0% | 6% | -9% |
| CMSCMS Energy Corp | $8.3B | — | 20.8% | 5% | -2% |
| NINisource Inc. | $6.5B | 76% | 28.1% | 6% | -6% |