April 11, 2022
Gas Utilities have a Data Monetization Index (DMI) in the range of 1.80% to 2.55% with an average of 2.18%. The DMI for these companies is based on the valuation of equipment data.
A higher DMI is generally preferable across companies and industries. By way of reference, internet companies have a higher DMI because most of their enterprise value is derived from data. For example, Google’s DMI is 93 percent.
- 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
The YDC team recently published a 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.