Korea Electric Power Corporation Common Stock (KEP)

FairStock Score: 70/100 — STEADY

Key Financials

Strengths

• Generates $4.3 trillion in annual free cash flow (21486.6% yield on market cap)
• Strong Piotroski F-Score of 9/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• Solid return on equity of 19.1% above cost of capital
• FairStock composite score of 70/100 places it in the top tier across value, quality, and momentum factors

Concerns

• High leverage at 2.70x debt-to-equity increases financial risk and interest expense burden
• Altman Z-Score of 0.2 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Korea Electric Power Corporation Common Stock is a mid-cap utilities company valued at $20.0 billion. The business generates $97.4 trillion in annual revenue with a 1.4% net margin and $4.3 trillion in free cash flow. From a quality standpoint, Korea shows near-perfect Piotroski F-Score of 9/9 indicating exceptional financial health and distressed Altman Z-Score of 0.2 warrants caution. On valuation, the stock is deeply undervalued on a P/E basis at 3.4x, with offers a 99% margin of safety vs Graham Number of $2716. Growth dynamics show revenue growing at 5.6% and profit growth of 103.1%. Our composite FairStock Score of 70/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

The market underappreciates Korea's consistent 19% ROE at just 3x earnings—a re-rating toward sector peers could unlock 30-50% upside. With $4.3 trillion in annual free cash flow (21486.6% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Elevated leverage at 2.7x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer