Caribbean Utilities Company (CUP.U) AI Stock Analysis

• Market Cap: $572.74M
• Dividend Yield: 4.13%
• Average Volume (3M): 1.46K
• Price to Earnings (P/E): 12.2
• Beta (1Y): 0.26
• Revenue Growth: -4.37%
• EPS Growth: 77.48%
• Country: CA
• Employees: 275
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Electric
• EPS (TTM): 0.27
• Shares Outstanding: 42,425,045
• 10 Day Avg. Volume: 1,029
• 30 Day Avg. Volume: 1,456
• PEG Ratio: 6.59
• Price to Book (P/B): 1.40
• Price to Sales (P/S): 2.03
• P/FCF Ratio: -134.85
• Enterprise Value/Market Cap: 1.72
• Enterprise Value/Revenue: 3.48
• Enterprise Value/Gross Profit: 8.55
• Enterprise Value/Ebitda: 9.64
• 1Y Price Target: $14.00
• Price Target Upside: 4.40% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): 1.14
• Revenue Forecast (FY): $322.00M

• Rating: 67 Neutral
• Price Target: $14.50 ▲(8.13% Upside)
• Action: Downgraded Date: 03/06/26
• Date: Action: Downgraded 03/06/26

The score is driven primarily by solid and improving profitability, but it is held back by persistent negative free cash flow and a leveraged capital structure that may limit financial flexibility. Technicals are mildly supportive with the stock trading above key moving averages, and valuation is a positive contributor given the moderate P/E and attractive dividend yield.

Positive Factors

Stable Profitability

Stable profitability with healthy margins indicates efficient operational management, supporting long-term financial stability and shareholder returns.

Regulated Framework

Operating under a regulated framework provides predictable revenue streams and reduces business risk, ensuring stable returns over time.

Diverse Energy Sources

A diverse energy mix enhances resilience against market fluctuations and supports sustainable practices, aligning with long-term industry trends.

Negative Factors

Negative Free Cash Flow

Negative free cash flow suggests liquidity issues, which could limit the company's ability to invest in growth opportunities and manage debt effectively.

Decline in Revenue Growth

A decline in revenue growth may signal challenges in market expansion or competitive pressures, potentially impacting future profitability.

High Leverage

High leverage increases financial risk, especially if cash flow issues persist, potentially affecting the company's ability to meet financial obligations.

Caribbean Utilities Company Business Overview & Revenue Model

Company Description

Caribbean Utilities Company, Ltd. generates and distributes electricity in Grand Cayman, the Cayman Islands. The company generates electricity using diesel. As of December 31, 2021, its installed generating capacity is 161 megawatts. It also operates a transmission and distribution system, including 8 transformer substations with approximately 387 miles of overhead high-voltage, 53.8 miles of underground high-voltage, and 14 miles of high-voltage submarine cables. The company also provides telecommunication services. The company was founded in 1966 and is headquartered in Grand Cayman, the Cayman Islands. Caribbean Utilities Company, Ltd. is a subsidiary of Fortis Energy (Bermuda) Ltd.

How the Company Makes Money

CUP.U generates revenue primarily through the sale of electricity to its customers, which includes residential, commercial, and industrial sectors. The company operates under a regulated framework that allows it to earn a return on investment through a rate-setting process approved by the government's utility regulator. Key revenue streams include base electricity rates, fuel adjustment charges, and infrastructure fees. Additionally, CUP.U may engage in energy efficiency programs and renewable energy projects, which can create additional revenue opportunities. Significant partnerships with government entities and other stakeholders in the energy sector also play a role in its financial performance, particularly in terms of investments in new technologies and sustainable practices.

Caribbean Utilities Company Financial Statement Overview

Summary

Profitability has improved meaningfully with higher net income and expanding net margins, which is a clear strength for a regulated utility. However, the balance sheet remains consistently leveraged (debt roughly around equity), and cash flow quality is the primary drag: free cash flow is negative in most recent years and operating cash flow has at times trailed net income, implying reliance on external funding for capex and dividends.

Income Statement

Revenue has generally trended upward over the period (despite a modest dip in 2025 after 2024), and profitability improved meaningfully: net income rose from $15.5M (2020) to $47.4M (2025) with net margins expanding to ~16.7% in 2025 from ~8.7% in 2020. Operating profitability also looks healthy and relatively stable for a regulated utility, with EBITDA margins mostly in the low-to-mid 30% range and improving in 2025. The key weakness is uneven growth (notably the sharp rebound in 2021 and a large reported growth rate in 2025 that doesn’t align with the year-over-year revenue change), suggesting revenue momentum can be lumpy and some growth signals should be interpreted cautiously.

Balance Sheet

The balance sheet is workable but leverage is a clear constraint. Total debt increased to ~$416M in 2025 from ~$307M in 2020, and debt runs around parity with equity (debt-to-equity near ~1.0–1.23 across the period). Equity has grown (to ~$412M in 2025), supporting asset expansion, and returns on equity have been steady around ~10–12% in recent years, which is solid for the sector. The main risk is the consistently leveraged capital structure, which can reduce flexibility if financing costs rise or if large capital programs continue.

Cash Flow

Cash generation is mixed: operating cash flow is consistently positive (roughly $56M–$91M), but free cash flow is negative in most years (2021–2025), including -$4.3M in 2025 and -$9.8M in 2024, indicating capital spending is absorbing most operating cash. Cash conversion versus earnings is also inconsistent, with operating cash flow running below net income in several years (coverage below 1.0 in 2022, 2023, and 2025). A positive offset is that the free-cash shortfall has narrowed versus 2022–2023, but overall the profile suggests reliance on external funding to support investment and dividends.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	284.00M	293.68M	287.23M	267.34M	198.48M
Gross Profit	115.43M	105.50M	98.71M	90.42M	86.87M
EBITDA	102.42M	93.94M	87.13M	76.94M	74.26M
Net Income	47.37M	42.69M	38.66M	33.18M	22.19M
Balance Sheet
Total Assets	879.59M	850.96M	777.81M	726.54M	634.15M
Cash, Cash Equivalents and Short-Term Investments	1.86M	20.20M	3.99M	7.95M	7.36M
Total Debt	416.23M	404.76M	399.73M	358.60M	293.38M
Total Liabilities	467.58M	457.59M	453.06M	418.31M	336.27M
Stockholders Equity	412.00M	393.37M	324.74M	308.23M	297.88M
Cash Flow
Free Cash Flow	-4.28M	-9.79M	-20.77M	-41.04M	-1.25M
Operating Cash Flow	85.59M	91.46M	80.78M	56.19M	62.01M
Investing Cash Flow	-89.43M	-100.43M	-101.22M	-97.19M	-63.13M
Financing Cash Flow	-14.50M	25.18M	16.47M	41.59M	-37.11M

Caribbean Utilities Company Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 13.41
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CUP.U, the sentiment is Positive. The current price of 13.41 is above the 20-day moving average (MA) of 13.22, above the 50-day MA of 13.23, and above the 200-day MA of 12.96, indicating a bullish trend. The MACD of 0.07 indicates Negative momentum. The RSI at 57.66 is Neutral, neither overbought nor oversold. The STOCH value of 62.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CUP.U.

Caribbean Utilities Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CUP.U	67 Neutral	$572.74M	12.20	12.67%	4.13%	-4.37%	77.48%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
EMA	65 Neutral	$21.64B	18.58	8.83%	4.33%	14.10%	65.76%
FTS	64 Neutral	C$39.54B	19.97	7.51%	3.50%	5.21%	4.27%
CU	58 Neutral	C$13.14B	97.60	8.84%	4.33%	-0.94%	25.64%
ACO.X	54 Neutral	C$6.71B	42.21	3.20%	3.62%	7.75%	11.25%
AQN	54 Neutral	C$6.55B	26.51	-0.57%	4.32%	-4.72%	96.98%