Data Economics

Enabling chief data officers and investors to tie the financial value of data to enterprise value

YDC Data Monetization for Gas Utilities

April 11, 2022

Summary

Gas Utilities have a YDC Data Monetization Index (DMI) in the range of 1.80% to 2.55% with an average of 2.18%. The YDC DMI for these companies is based on the valuation of equipment data.

A higher YDC DMI is generally preferable across companies and industries. By way of reference, internet companies have a higher YDC DMI because most of their enterprise value is derived from data. For example, Google’s YDC DMI is 93 percent.

Definitions

  • YDC Data Monetization Index (DMI) = Data Valuation / Enterprise Value
  • Data Valuation = Equipment Data Valuation
  • Enterprise Value =  Equity Value + Long Term Debt – Cash, a key metric used in the investment community

Methodology

The YDC team recently published a YDC DMI for major Gas Utilities in the United States. Here is an example for Northwest Natural Holding Company along with a benchmark that includes other companies in the industry.

The data valuation is based on research that indicates that accurate and timely equipment data can have a positive impact on predictive maintenance costs. The equipment data valuation for gas utilities is based on comparable companies and publicly-available data sources. The total value of data will likely be higher once additional datasets relating to product, employees, and real estate are included.

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