DTE Energy Company (DTE)

Conclusion

DTE Energy is a US regulated utility that supplies electricity to about 2.3 million customers in southeastern Michigan and natural gas to about 1.4 million customers across Michigan, with a smaller industrial services arm. At a price of 138.35 USD on 9 November 2026, the company has a market capitalisation of 28.80 billion USD and an enterprise value of 57.55 billion USD.

The verdict is fair. The price-to-earnings ratio of 21.01 sits above its ten-year median of 19.58, and enterprise value to EBITDA of 13.38 sits above its median of 12.47. The fair value band runs from 102.81 to 154.22 USD with a midpoint of 128.51 USD, giving a margin of safety of -7.1% at the current price. The fair value from historical multiples is also 128.51 USD. The DCF value per share and the growth implied by the price (reverse DCF) are not available, so the price cannot be set against the growth it assumes. Delivered growth is mixed: revenue compound growth is 6.72% over five years but -6.31% over three years, and earnings per share compound growth is -0.07% over five years.

The strongest numbers are a Piotroski score of 7 out of 9, six earnings beats in the last eight quarters, and an estimated Ohlson insolvency risk of about 1.7%. The weakest are net debt at 6.68x EBITDA, interest coverage of 1.95x, and free cash flow conversion of -143.3% over the last twelve months. The Altman Z-score of 0.89 adds to the concern.

Financial health

Financial health is red, because all four assessed measures are weak. The current ratio is 0.62 and the quick ratio 0.28, so current liabilities exceed current assets. Net debt is 6.68x EBITDA, debt to equity is 2.27 and interest coverage is 1.95x. The Altman Z-score is 0.89, in the distress zone, but that model was designed for manufacturers and DTE is a regulated utility, so the reading is limited. Insolvency risk: low, about 1.7% by the estimate of the Ohlson model over one to two years. Leverage is common in regulated utilities, but these levels leave little room for a shock.

Earnings quality

Earnings quality is yellow. The Piotroski score of 7 out of 9 and six beats in eight quarters hold it up, while cash generation pulls it down. Free cash flow conversion is -143.3% over the last twelve months and -74.3% over five years, free cash flow is negative, and free cash flow after stock-based compensation is -1.96 billion USD. Stock-based compensation is not reported. The accrual ratio is -3.8%. The share count has grown 1.4% a year over five years, so there are no net buybacks. The Beneish M-score is not available. The average earnings surprise is 5.5%. Estimate revisions are negative: the next-year earnings estimate moved -2.36% over 90 days, with seven downgrades and one upgrade in the last 30 days.

Profitability

Profitability is yellow, with four neutral readings and no good or bad ones. The operating margin is 12.1% against a ten-year median of 13.59%, the net margin is 8.34% against 9.12%, and the gross margin is 22.06% against 25.94%. Margin stability is 19.9%. ROIC is 5.33% against a WACC of 6.78%, a ROIC minus WACC of -1.45%, and the five-year median ROIC is 5.76%. Return on equity of 10.82% is lifted by leverage. The DuPont split gives a net margin of 9.24%, an asset turnover of 0.29x and an equity multiplier of 4.39x. Returns currently sit below the cost of capital.

Growth

Growth is red. Revenue compound growth is 6.72% over five years and 4.34% over ten years, but -6.31% over three years. Earnings per share grew 8.53% a year over three years and 5.69% over ten, but fell -0.07% a year over five. Revenue rose in six of ten comparable years. The next-year earnings growth estimate is 5.97%. Growth is modest and uneven, and the recent three-year revenue decline is the main weakness.

Valuation

Valuation is yellow, with one neutral reading. Against their own ten-year medians, the price-to-earnings ratio of 21.01 is a premium of 7.3%, enterprise value to EBITDA of 13.38 is a premium of 7.3%, price to sales of 1.75 is a premium of 5.5%, and price to book of 2.27 is a premium of 8.0%. Price to free cash flow has too few history points to assess. The free cash flow yield is -6.82% and the earnings yield 4.76%. The DCF uses a discount rate of 8.9% and terminal growth of 2.5%, but the DCF value per share is not available. The fair value band runs from 102.81 to 154.22 USD, with a midpoint of 128.51 USD and a margin of safety of -7.1%. This is an estimate built on fixed assumptions, not a price target. The dividend yield is 3.23% and the forward yield 3.45%. The payout on free cash flow is not available.

Risks

Each weak number carries a specific risk. Net debt at 6.68x EBITDA and interest coverage of 1.95x mean that a fall in earnings or a rise in borrowing costs would absorb a large share of interest payments. A current ratio of 0.62 leaves little buffer against short-term obligations. Free cash flow is negative, and the data does not show how the 3.23% dividend yield is funded. Falling earnings estimates could signal weaker near-term results. Not available: the Beneish M-score, the DCF value per share, the reverse DCF, stock-based compensation and the payout on free cash flow. This analysis also lacks a debt maturity schedule and revenue by segment, so refinancing risk and business mix cannot be judged.