PG&E Corporation (PCG): A Bull Case Theory 

We came across a bullish thesis on Pacific Gas and Electric Company on Value investing subreddit by cameronreilly. In this article, we will summarize the bulls’ thesis on PCG. Pacific Gas and Electric Company’s share was trading at $16.12 as of November 28th. PCG’s trailing and forward P/E were 13.55 and 9.95 respectively according to Yahoo Finance.

PG&E Corporation, through its subsidiary, Pacific Gas and Electric Company, engages in the sale and delivery of electricity and natural gas to customers in northern and central California, the United States. PCG presents one of the most unusual cases in U.S. value investing—a convicted felon of a utility that still sits on a buy list. PG&E is a massive regulated monopoly serving 16 million people across northern and central California, and while such businesses typically deliver predictable returns, PG&E’s history is defined by engineering failures, climate exposure, and catastrophic mismanagement.

The 2018 Camp Fire, caused by a worn hook on an ageing transmission tower, killed 85 people, destroyed thousands of structures, and left the company facing roughly US$30 billion in liabilities. This event, layered onto the 2010 San Bruno pipeline explosion, an armed substation attack, and numerous regulatory scandals, pushed PG&E into a 2019 bankruptcy and a US$13.5 billion settlement, culminating in guilty pleas to 84 counts of involuntary manslaughter.

Yet beneath the disaster narrative lies a protected monopoly with a rapidly expanding regulated asset base. PG&E is now investing tens of billions to harden its grid—burying power lines, deploying microgrids, improving fire risk analytics, and installing weather-triggered shutoff systems. Much of this capex flows into its regulated rate base, generating approved returns, while California’s US$21 billion Wildfire Insurance Fund now helps socialise future wildfire losses. The state effectively cannot let PG&E fail because it must keep electricity flowing across a fire-prone region.

Financials appear frightening at first glance—US$24.7B in revenue, US$2.7B in net profit, and nearly US$59B in net debt—but much of the leverage sits in state-engineered recovery structures repaid through customer surcharges. While PCG looks cheap on Price/Operating Cash Flow at 4.2, it screens poorly on QAV quality metrics. The stock’s collapse from US$70 in 2017 to the mid-teens reflects deep market trauma, but it also creates a contrarian setup: if grid-hardening efforts succeed and regulators maintain supportive returns, the equity could quietly compound. If another catastrophic failure occurs, all upside disappears.

Previously we covered a bullish thesis on PG&E Corporation (PCG) by Acid Investments in February 2025, which highlighted the market’s overreaction to the LA wildfires despite PCG having no direct liability and strong EPS growth prospects. The company’s stock price has appreciated approximately by 1.51% since our coverage. The thesis still stands as fundamentals remain intact. cameronreilly shares a similar view but emphasizes PCG’s long-term contrarian setup.

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Disclosure: None.