XEL

Xcel is a classic regulated multi-state utility (NSP-Minnesota, PSCo, SPS, NSP-Wisconsin) executing a massive capital build-out. FY2025 GAAP net income rose 4.2% to $2.02B and operating income grew 8.3% to $2.58B, but GAAP diluted EPS slipped to $3.42 from $3.44 as the share count expanded 8.6% to fund the program. Management's own ongoing diluted EPS bridge — $3.80 vs $3.50 — flags two specifics: a $287M Q3 + $12M Q4 Marshall Wildfire settlement at PSCo ($0.38/share) and prior Sherco Unit 3 refunds. PSCo GAAP EPS fell from $1.39 to $1.15 entirely because of that wildfire charge; ongoing PSCo earnings were actually $1.53. That tells you the underlying utility is still earning, but climate-driven wildfire liability is now a recurring tail risk worth pricing in.

The balance sheet is doing the heavy lifting for growth, not buybacks. FY2025 capex of $10.9B was up 48.1% YoY against operating cash flow of just $4.08B (down 12.0%), so the gap is being funded with debt and equity issuance: long-term debt rose 16.5% to $31.8B, current portion of debt jumped 123% to $1.55B, and shares outstanding grew 8.6%. Total assets grew 16.2% to $81.4B and equity grew 20.9% to $23.6B — rate-base expansion at work, and the model still relies on regulators allowing recovery of that investment plus an allowed return. ROE is a modest 8.5%, which is consistent with a regulated utility but not exciting. Dividends paid ($1.28B, +9.1%) confirm the income story, but cash & equivalents of just $274M against $7.09B current liabilities shows reliance on continued capital-market access.