ELE

Endesa SA

€30.65 32.5B market cap December 24, 2024

Endesa SA ELE BUFFETT / MUNGER / KLARMAN SUMMARY

1 SNAPSHOT

Price€30.65

Market Cap32.5B

2 BUSINESS

Fair value regulated utility. Collect 4.3% dividend income. Consider trimming from 14.95% position to 10-12% due to Enel control and single-country concentration.

3 MOAT NARROW

Regulated distribution monopoly (320,329 km network). Scale advantages as largest Spanish utility. ~40% EBITDA from regulated distribution. Licenses, permits, regulatory relationships.

4 MANAGEMENT

CEO: Appointed by Enel

70% payout ratio policy. CHF 1.1B debt repayment in 2024. CHF 2B+ CapEx for renewables. Enel controls strategic direction which limits minority shareholder influence.

5 ECONOMICS

24.8% Op Margin

14.5% ROIC

14.5% ROE

9x P/E

3.6B FCF

50% Debt/EBITDA

6 VALUATION

FCF Yield11.1%

DCF Range27 - 31

At fair value

7 MUNGER INVERSION

Kill Event	Severity	P()	E[Loss]
Regulatory intervention (windfall tax, rate cuts)	HIGH	-	-
Enel value extraction	MED	-	-

8 KLARMAN LENS

Downside Case

Regulatory intervention (windfall tax, rate cuts)

Why Market Right

Spain has history of retroactive regulatory changes (2013-2014 cuts); Major regulatory overhaul combined with energy transition failure and Enel extraction could impair s

Catalysts

Regulatory clarity on grid remuneration H1 2025; Dividend payment July 2025; Continued earnings normalization

9 VERDICT HOLD

B+ Quality Moderate - 1.8x

Strong Buy€19.6

Buy€22.4

Fair Value€31

Strong Buy below 19.6, Accumulate below 22.4

10 MACRO RESILIENCE +3

Neutral to Mild Tailwinds Required MoS: 25%

Monetary

Geopolitical

Technology

Demographic

Climate

Regulatory

-4

Governance

-2

Market

Key Exposures

Energy Transition Tailwind +6 47% renewable capacity with ongoing investment. Positioned to benefit from EU decarbonization mandates and green investment flows.
Regulatory Risk -3 Spain has history of hostile utility regulation. Windfall taxes, rate cuts possible. Distribution remuneration at regulatory mercy.
Governance Discount -2 Enel's 70% control means minority shareholders have no voice. Strategic decisions serve Rome first.

Endesa is macro-resilient with energy transition tailwind offsetting regulatory concerns. Total score of +3 indicates neutral to mild tailwinds. The regulated distribution monopoly provides stability, while renewable positioning creates growth optionality. At EUR 30.65 (17x P/E, 4.3% yield), the stock trades near fair value (EUR 27-30) with no margin of safety. The governance discount from Enel control is warranted but priced in. For current holders: HOLD and collect 4.3% dividend. Position overweight at 14.95% - consider trimming to 10-12%. For new positions: WAIT for EUR 22-24 to build adequate margin of safety. 25% MoS target implies buy below EUR 21.

🧠 ULTRATHINK Deep Philosophical Analysis

ELE - Ultrathink Analysis

The Real Question

We're not asking "is Endesa a reliable utility?" The 320,000 km distribution network and regulated monopoly answer that. The real question is: When you're a controlled subsidiary of a larger parent, does the market price reflect your intrinsic value or merely what Enel allows you to be worth?

The market sees Endesa as either Spanish energy transition play or regulated income vehicle. Neither frame captures the deeper tension. The real question: When 70% of your shares are locked in Enel's hands, when your CEO serves Rome before Madrid, when your dividend policy reflects parent needs—are minority shareholders partners or passengers?

Hidden Assumptions

Assumption 1: Enel's interests align with minorities. Enel owns 70.1% and controls everything—CEO, board, strategy, dividends. The assumption is that Enel manages Endesa for all shareholders. But examine incentives: Enel faces its own pressures, its own capital needs, its own strategic priorities. The assumption that a controlled subsidiary operates for minority benefit ignores the history of controlled companies everywhere.

Assumption 2: Spanish regulatory stability continues. Spain has a history of retroactive regulatory changes—the 2013-2014 cuts damaged utilities for years. The assumption is that this won't recur. But governments change. Populism rises. Utilities are visible targets. The assumption that past windfall taxes were aberrations ignores that governments learn what they can get away with.

Assumption 3: 2024's strong results are sustainable. Net income surged 154% as energy markets normalized. The assumption is this represents new baseline earnings. But consider: 2023 was depressed by crisis and intervention. 2024 is reversion, not growth. The assumption that 2024 earnings repeat ignores mean reversion.

Assumption 4: Fair value means worth holding. At €28-30 fair value with €30.65 current price, the stock is fairly priced. The assumption is that fair value justifies holding a controlled subsidiary with limited upside. But opportunity cost matters. Fairly priced utilities with governance concerns compete against fairly priced businesses without them.

The Contrarian View

For the bears to be right, we need to believe:

Enel extracts value over time — Related party transactions, unfavorable intercompany pricing, dividend decisions favoring parent liquidity over subsidiary growth.
Regulatory pendulum swings — New Spanish government imposes permanent windfall taxes or cuts distribution remuneration.
Energy transition costs exceed benefits — Renewable investments destroy value rather than create it; coal closures strand assets.
Multiple compression continues — Trading at 17x with flat growth, multiple drifts toward 12-14x European utility average.

The probability of meaningful Enel value extraction? Perhaps 30% over 5 years. Adverse regulation? 25%. Energy transition disappointment? 20%. Each alone manageable; combined, meaningful.

Simplest Thesis

Endesa is a high-quality Spanish utility fairly priced at €30—but minority shareholders should question whether fair price justifies governance subordination.

Why This Opportunity Exists

There is no opportunity at current prices.

At €30.65, Endesa trades at or slightly above fair value (€27-30 range):

Recovery already priced — Stock +45% YTD as 2024 results normalized. The market recognized the reversion.
No forced selling — Enel's 70% stake is locked; remaining float is stable.
No complexity discount — Regulated utility is simple to value.
No neglect — Well-covered by European analysts.

The opportunity was in 2023 when energy crisis dislocation created temporary undervaluation. That window closed.

The next opportunity requires either price correction (€22-24) or regulatory catalyst providing upside visibility.

What Would Change My Mind

Stock drops 25% to €22-24 — At that level, governance concerns are compensated with adequate margin of safety.
Enel reduces stake — A path to minority-friendlier ownership would reduce governance discount.
Regulatory clarity emerges — Multi-year rate framework with visible remuneration would provide earnings certainty.
Energy transition investments show superior returns — If renewable projects generate returns above regulatory minimums, value creation is visible.
Dividend growth accelerates — If yield expands to 5%+ with growth trajectory, income case strengthens.

Some possible within 12-24 months. Current position is justifiable as income holding; new positions should wait for better entry.

The Soul of This Business

Strip away the Enel ownership, the regulatory complexity, the energy transition narratives. What is Endesa at its core?

Endesa is infrastructure as promise. The fundamental compact: 22 million Spaniards depend on Endesa's wires and plants to keep the lights on. In exchange, regulators allow reasonable returns on invested capital. This mutual dependence—essential service for allowed returns—is the soul.

The 320,000 km of distribution network represents generations of investment now operating as regulated monopoly. Every kilometer is a physical promise: electricity will flow from here to there, and someone will pay for its maintenance.

But here's the uncomfortable truth: the soul belongs to Spain, but the body belongs to Enel. Endesa serves Spanish customers while serving Italian shareholders. The regulated returns go partly to minority shareholders but mostly to Rome. The strategic decisions serve Enel Group strategy first, Endesa stakeholders second.

At €22, you buy Spanish infrastructure at a price that compensates for Italian control.

At €30.65, you buy the same infrastructure while accepting that your interests are subordinate to Enel's.

The lights will stay on. The dividends will flow. The question is whether minority shareholders are owners or rentiers on someone else's asset.

The infrastructure is essential. The ownership structure is not.

Executive Summary

Investment Thesis (3 Sentences)

Endesa is Spain's largest electric utility with a regulated distribution network serving 22 million people and 10+ million customers, providing predictable cash flows and defensive characteristics. The company delivered exceptional 2024 results (net income +154%) as energy markets normalized post-crisis, with strong deleveraging (1.8x net debt/EBITDA) and dividend growth (+32%). While trading at fair value (~17x P/E) with limited upside, the 4.3% yield and regulated utility profile make it a reasonable income holding, though Enel's 70% control limits minority shareholder influence.

Key Metrics Dashboard

Metric	Value	Assessment
Price	€30.65	-
P/E (2024)	17.2x	Fair for utility
EV/EBITDA	7.9x	Reasonable
Dividend Yield	4.3%	Attractive
Net Debt/EBITDA	1.8x	Conservative
EBITDA Margin	24.8%	Strong
Free Float	~30%	Limited liquidity

Decision & Sizing

Decision	Rationale
HOLD (Currently Owned at 14.95%)	Fair value, collect dividend income
Position Size	Slightly overweight - consider trimming toward 10-12%

Primary Catalyst & Timeline

Catalyst: Continued energy transition + potential regulatory clarity on grid remuneration (2025-2026)
Timeline: Dividend payment July 2025; regulatory update expected H1 2025

PHASE 0: Opportunity Identification (Klarman)

Why Does This Opportunity Exist?

Opportunity Source	Present?	Notes
Forced selling	No	-
Complexity/stigma	Partial	Energy sector complexity, regulatory uncertainty
Institutional constraints	No	Large cap, index constituent
Temporary operational problem	Resolved	2023 was impacted by energy crisis; 2024 normalized
Market overreaction	No	Stock up +45% YTD, market has recognized recovery
Neglect	No	Well-covered by analysts

Assessment: The opportunity was primarily due to the temporary energy market dislocation in 2022-2023. The market has now largely recognized the recovery (stock +45% YTD), reducing the opportunity. Current valuation is fair, not cheap.

PHASE 1: Risk Analysis (Inversion Thinking)

"All I want to know is where I'm going to die, so I'll never go there." - Munger

Top 3 Ways This Investment Could Fail

1. Regulatory Risk (Probability: 30% | Impact: -25%)

Risk: Spanish government changes regulatory framework unfavorably
Mechanism: Distribution remuneration cuts, windfall taxes, price caps
Historical Evidence: Spain has history of retroactive regulatory changes (2013-2014 cuts)
Recent Example: 1.2% extraordinary levy in 2023-2024 (now expired)
Mitigation: Enel's political influence; Spain needs investment for energy transition
Expected Loss: 30% × 25% = 7.5%

2. Enel Control Risk (Probability: 20% | Impact: -20%)

Risk: Enel extracts value at expense of minority shareholders
Mechanism: Related party transactions, unfavorable dividends, asset transfers
Historical Evidence: Some concerns about intercompany arrangements
Mitigation: Listed company with regulatory oversight; Enel needs capital markets access
Expected Loss: 20% × 20% = 4%

3. Energy Transition Execution Risk (Probability: 25% | Impact: -30%)

Risk: Fails to execute renewables transition competitively
Mechanism: Stranded thermal assets, higher capex than planned, technology shifts
Current Status: 47% renewable capacity, targeting significant expansion
Mitigation: Already well-positioned vs peers; regulated distribution provides buffer
Expected Loss: 25% × 30% = 7.5%

Bear Case Summary (Short Thesis)

"Endesa is a captive subsidiary of Enel with 70% control, trading at fair value with no margin of safety. Spain's regulatory history is hostile to utilities - expect future windfall taxes and rate cuts. The 2024 results are peak earnings as energy prices normalize lower. Minority shareholders get the dividend scraps while Enel controls the strategic direction. At 17x earnings with limited growth, you're paying full price for a utility with governance discount deserved."

Inversion Questions

Question	Answer
How could this lose 50%+ permanently?	Major regulatory overhaul + energy transition failure + Enel value extraction
Non-price sell triggers?	Dividend cut >30%; Enel proposes squeeze-out; new windfall tax imposed
3-sentence bear case?	See above
Can I state bear case better than bears?	Yes - bear case is valid but Spain needs Endesa for energy security

PHASE 2: Financial Analysis

Return Metrics

ROE Analysis (5-Year)

Year	Net Income (€M)	Equity (€M)*	ROE
2024	1,888	~12,000	~16%
2023	742	~11,000	~7%
2022	2,541	~11,500	~22%
2021	1,902	~11,000	~17%
2020	1,394	~10,500	~13%

*Estimated

Normalized ROE: ~14-15% (excluding 2023 extraordinary impacts)

Owner Earnings Calculation (2024)

Net Earnings:                    €1,888M
+ Depreciation/Amortization:     ~€1,800M (estimated)
- Maintenance CapEx:             ~€1,200M (estimated)
- Working Capital Changes:       ~€200M (estimated)
= Owner Earnings:                ~€2,300M

Owner Earnings per Share = €2,300M / 1,058.75M = €2.17

Valuation Trinity

1. Asset Value (Regulated Utility Approach)

For regulated utilities, Regulatory Asset Base (RAB) is key:

Estimated RAB: ~€20-25B (distribution + generation)
RAB multiple: 1.0-1.3x typical for Spanish utilities
Implied Equity Value: €20-25B × 1.2 - €9.3B net debt = ~€15-21B
Per Share: €14-20

Assessment: Current price €30.65 trades at premium to asset value - typical for quality utilities

2. Going Concern Value (DCF Conservative)

Assumptions:

Owner Earnings Year 0: €2,300M
Growth Years 1-5: 2% (regulated, inflation-linked)
Growth Years 6-10: 1.5%
Terminal Growth: 1%
Discount Rate: 8% (EUR utility)

DCF Value (10-year):
Year 1-5: €2,300M growing at 2% = €2,346, €2,393, €2,441, €2,490, €2,540
Year 6-10: Growing at 1.5%
Terminal Value = €2,700M × 1.01 / (0.08 - 0.01) = €38,957M
PV of Cash Flows + Terminal = ~€11,200M + ~€18,000M = €29,200M

Intrinsic Value = €29,200M / 1,058.75M = €27.58 per share

Margin of Safety: (€27.58 - €30.65) / €27.58 = -11% (Premium to DCF)

3. Dividend Discount Model (Utility Appropriate)

Current Dividend: €1.32
Dividend Growth Rate: 3% (long-term)
Required Return: 8%

DDM Value = €1.32 × 1.03 / (0.08 - 0.03) = €27.19 per share

4. Relative Valuation

Metric	ELE	European Utilities Avg	Premium/Discount
P/E	17.2x	12-16x	Slight premium
EV/EBITDA	7.9x	7-9x	In-line
Dividend Yield	4.3%	4-6%	In-line
Net Debt/EBITDA	1.8x	3-4x	Conservative

Assessment: Trading in line to slight premium vs peers on P/E, justified by strong balance sheet.

Valuation Summary

Method	Value/Share	vs €30.65	MOS
Asset Value (RAB)	€14-20	Premium	n/a
DCF (Conservative)	€27.58	+11% premium	-11%
DDM	€27.19	+13% premium	-13%
EV/EBITDA (8x)	€31.50	-3% discount	3%
Owner Earnings × 12	€26.04	+18% premium	-18%
Owner Earnings × 14	€30.38	+1% premium	-1%

Intrinsic Value Estimate: €27-30 per share Current Price vs IV: Trading at or slightly above fair value

PHASE 3: Moat Analysis

Moat Sources

Moat Type	Strength	Evidence
Regulated Monopoly	HIGH	Distribution network is regulated monopoly
Scale Advantages	MODERATE	Largest utility in Spain, cost advantages
Switching Costs	LOW	Retail customers can switch suppliers
Network Effects	LOW	Limited
Intangible Assets	MODERATE	Licenses, permits, regulatory relationships

Moat Quantification

Distribution Network (Strongest Moat):

320,329 km of network - cannot be replicated
Serves 22 million people in regulated territories
Remuneration set by regulator - predictable returns
~40% of EBITDA from regulated distribution

Generation Assets:

21,449 MW capacity - significant but not unique
47% renewable - growing
Nuclear assets provide baseload (but aging)
Competitive in wholesale market

Moat Durability Assessment

Threat	Severity (1-5)	Timeline	Company Mitigation
Regulatory change	4	Ongoing	Political engagement, essential service
Distributed generation	3	10+ years	Investing in solar, storage
Technology disruption	2	15+ years	Transitioning to renewables
New entrants	1	Low	Regulated monopoly protected
Customer switching	2	Ongoing	Focus on service quality

10-Year Moat Trajectory: Stable to slightly widening (distribution monopoly durable)

Moat Rating: MODERATE-HIGH

Distribution monopoly is very strong; generation competitive but well-positioned. Overall moat is durable for utility sector.

PHASE 4: Management & Incentive Analysis

Parent Company Control

Aspect	Assessment
Controller	Enel SpA (70.1% stake)
Control Type	Strategic management control
CEO Appointment	Appointed by Enel board
Strategy Alignment	Aligned with Enel Group strategy

Capital Allocation (2024)

Use of FCF	Amount	%	Assessment
Dividends	€1,397M	38%	70% payout ratio policy
Debt Repayment	€1,100M	30%	Deleveraging priority
CapEx	€2,057M	55%	Renewable investment
FCF Generated	~€3,600M	-	Strong conversion

Note: FCF exceeds uses due to working capital benefits

Enel Relationship Assessment

Positives:

Strategic backing from major European utility
Access to Enel's technology and expertise
Credit strength benefits from parent
Aligned on energy transition

Concerns:

Minority shareholders have limited influence
Potential for value extraction via related party transactions
Dividend policy set by Enel's needs
CEO serves Enel's interests first

Insider Activity

Limited visibility - Enel CEO recently increased personal stake (Nov 2024)

PHASE 5: Catalyst Analysis

Potential Catalysts

Catalyst	Type	Timeline	Probability	Impact
Regulatory clarity on grid remuneration	External	H1 2025	60%	Moderate
Continued earnings normalization	Operational	Ongoing	80%	Priced in
Renewable capacity additions	Operational	2025-2027	70%	Moderate
Dividend increase	Internal	July 2025	60%	Modest
Potential minority squeeze-out	External	Low prob.	10%	High

No Strong Near-Term Catalyst

The 2024 recovery is already reflected in the +45% YTD price move. Future catalysts are incremental rather than transformative.

PHASE 6: Decision Synthesis

Graham's 7 Criteria Assessment

#	Criterion	Test	ELE	Pass?
1	Adequate Size	Revenue > €100M	€21.3B revenue	✅
2	Financial Condition	Strong balance sheet	1.8x leverage	✅
3	Earnings Stability	Positive 10 years	Some volatility	⚠️
4	Dividend Record	20+ years	Yes	✅
5	Earnings Growth	33% over 10 years	Flat to modest	❌
6	Moderate P/E	P/E < 15	17.2x	❌
7	Moderate P/B	P/B < 1.5	~2.7x	❌

Graham Quality: 3.5/7 - Does not meet strict Graham criteria (P/E and P/B too high)

Buffett Quality Criteria

Criterion	Assessment	Pass?
Explain in one sentence	"Spain's largest utility - generates and distributes electricity"	✅
ROE consistently > 15%?	~14-15% normalized, volatile	⚠️
Management skin in game?	Controlled by Enel, limited alignment	⚠️
Identifiable moat?	Distribution monopoly + scale	✅
Consistent FCF?	Yes, ~€3B+ annually	✅

Buffett Quality: 3.5/5 - Good quality utility

Megatrend Resilience Score

Megatrend	Score	Notes
China Tech Superiority	0	Neutral - domestic utility
Europe Degrowth	-1	Spain economic exposure
American Protectionism	0	Neutral - no US exposure
AI/Automation	+1	Data center electricity demand
Demographics/Aging	0	Neutral
Fiscal Crisis	-1	Government may tax utilities
Energy Transition	+1	Positioned for renewables

Total Score: 0 | Tier: T3 (Adaptable)

Expected Return with Probability Tree

Scenario	Probability	5-Year Return	Weighted
Bull (regulatory support, faster growth)	15%	+60%	+9%
Base (stable operations, 4% yield + modest growth)	55%	+35%	+19.3%
Bear (regulatory pressure, flat earnings)	25%	+10%	+2.5%
Disaster (major adverse regulation)	5%	-30%	-1.5%
Expected	100%		+29.3%

5-Year Expected Return: +29% (~5.3% annualized + 4% dividend = ~9-10% total return)

Position Sizing

Current position: 14.95% of portfolio

Assessment: Position is overweight for a:

Fair value / slight premium stock
Controlled subsidiary (governance discount warranted)
Single-country utility (concentration risk)
T3 megatrend tier

Recommendation: Consider trimming toward 10-12% allocation

Price Targets & Recommendation

┌─────────────────────────────────────────────────────────────────┐
│                     INVESTMENT RECOMMENDATION                    │
├─────────────────────────────────────────────────────────────────┤
│ Company: Endesa SA                   Ticker: ELE                │
│ Current Price: €30.65     Date: December 24, 2024               │
├─────────────────────────────────────────────────────────────────┤
│ VALUATION SUMMARY                                                │
│ ┌─────────────────────────┬─────────────┬─────────────────────┐ │
│ │ Method                  │ Value/Share │ vs Current Price    │ │
│ ├─────────────────────────┼─────────────┼─────────────────────┤ │
│ │ DCF (Conservative)      │ €27.58      │ -11% (premium)      │ │
│ │ DDM (3% growth)         │ €27.19      │ -13% (premium)      │ │
│ │ EV/EBITDA (8x)          │ €31.50      │ 3% MOS              │ │
│ │ Owner Earnings (12x)    │ €26.04      │ -18% (premium)      │ │
│ │ Owner Earnings (14x)    │ €30.38      │ -1% (premium)       │ │
│ └─────────────────────────┴─────────────┴─────────────────────┘ │
│                                                                  │
│ INTRINSIC VALUE ESTIMATE: €28 (rounded weighted average)        │
│ CURRENT MARGIN OF SAFETY: -9% (trading at premium)              │
├─────────────────────────────────────────────────────────────────┤
│ RECOMMENDATION:  [ ] BUY  [x] HOLD  [ ] SELL  [ ] WAIT          │
│                  Consider TRIM to reduce concentration          │
├─────────────────────────────────────────────────────────────────┤
│ BUY PRICE (Strong):         €19.60 (30% below IV)               │
│ ACCUMULATE PRICE:           €22.40 (20% below IV)               │
│ FAIR VALUE:                 €28.00 (Intrinsic Value)            │
│ TAKE PROFITS PRICE:         €33.60 (20% above IV)               │
│ SELL PRICE:                 €42.00 (50% above IV)               │
├─────────────────────────────────────────────────────────────────┤
│ POSITION SIZE: 14.95% (current) - consider trim to 10-12%      │
│ CATALYST: Regulatory clarity H1 2025; dividend continuation     │
│ PRIMARY RISK: Regulatory intervention; Enel control             │
│ SELL TRIGGER: Dividend cut >30%; new windfall tax; P/E >22x    │
└─────────────────────────────────────────────────────────────────┘

Explicit Sell Triggers

Thesis Break: Spain imposes permanent windfall tax or materially cuts distribution remuneration
Moat Erosion: Distribution monopoly threatened by regulatory change
Governance Failure: Enel proposes transaction clearly unfavorable to minorities
Valuation: Price exceeds €42 (50% above fair value)
Financial: Net debt/EBITDA exceeds 4x; dividend cut >30%

What I Will NOT Sell On

Short-term energy price volatility
Temporary regulatory noise (elections, political posturing)
Market panic unrelated to company fundamentals
Minor earnings miss in single quarter

Monitoring Metrics

Metric	Current	Warning	Action if Breached
Net Debt/EBITDA	1.8x	>3.5x	Review thesis
Dividend/Share	€1.32	<€1.00	Concern
EBITDA Margin	24.8%	<18%	Watch closely
Renewable %	47%	<40%	Transition concern
Distribution EBITDA	~40%	<30%	Moat weakening

Psychology Check

Bias	Check	Status
Endowment effect	Holding because I own it?	⚠️ Yes - position is large
Anchoring	Am I anchored to entry price?	Possible
Social proof	Others own utilities?	Neutral
Confirmation bias	Ignoring governance concerns?	Addressed in analysis

Munger's Final Test

Circle of Competence: Can explain - utility that generates and distributes electricity in Spain
Variant Perception: No strong variant view - stock is fairly valued
Humility Check: If regulatory environment turns hostile, thesis is challenged
Inversion Final: If -50% tomorrow, would I add cautiously (regulated utility likely to survive)

Sources Used & Data Extracted

API Data Retrieved

Source	Data
EODHD	5 years daily prices (1,788 obs), dividend dates

Web Sources Consulted

Source	Data Extracted
Endesa Results 2024	Revenue, EBITDA, Net Income, debt, guidance
Endesa Results 2023	Prior year financials
companiesmarketcap.com	Historical revenue, shares outstanding
Renewables Now	2024 results summary
Simply Wall St	Ownership breakdown
Enel Key Facts 2024	Ownership structure (70.1%)

Conclusion

Endesa is a quality regulated utility trading at fair value. The 2024 recovery was impressive but is now priced in. As an income holding with a 4.3% yield and defensive characteristics, it's acceptable to hold. However, the current 14.95% allocation is arguably too concentrated for a controlled subsidiary with governance limitations.

Final Verdict: HOLD. Collect dividends. Consider trimming to 10-12% allocation on strength (above €33).

Analysis completed December 24, 2024