More From Vineet Kulkarni
What Are Analyst Recommendations for Apache?
Wall Street analysts gave mixed recommendations after Apache’s quarterly results. Apache shares fell 5% on November 6, 2015, after the earnings release.
A Look at Analysts’ Views and Price Targets on Southern Company
According to Wall Street analysts, Southern Company (SO) has a price target of $51.22 compared with its current market price of $51.53. This implies an estimated downside of 0.6%.
Are These Utilities’ Earnings Enough to Attract You?
US utilities (XLU) are targeting average annual earnings growth of 4%–6% for the next few years.
What Investors Should Know about Dominion Energy’s Dividends
Dominion Energy’s (D) payout ratio (the percentage of profit that it gave away in the form of dividends) was 81% in 2016, which is higher than the industry average and slightly on the lower side of its five-year payout average of 85%.
In-Depth Look: Debt Servicing Eating into Operations Cash
With large reductions in cash from operations and heavy burdens of fixed debt repayments, the ratio of debt servicing to operating cash flow rose in 2015.
Analyzing Dominion Energy Stock before Its 2Q17 Earnings
Currently, Dominion Energy (D) stock is trading at a 1% discount and a 1% premium to its 50-day and 200-day moving averages, respectively.
Will Southern Company Beat Its Q3 EPS Estimates?
Southern Company’s management has given an EPS guidance of $1.05 for the third quarter.
Analyzing US Regulated Utilities’ Total Returns
US mid-size regulated utilities outperformed their bigger counterparts in the past year. Their rally was much steeper—this boosted total returns.
Southern Company’s 4Q16 Earnings Fell on High Operating Costs
Southern Company (SO) reported earnings of $0.24 per share for 4Q16.
Are US Utilities Both Safe Havens and Overvalued?
The rush to US utilities despite their already stretched valuations indicates their safe-haven appeal amid global turmoil.
Utilities with Maximum Returns in the Last Five Years
NextEra Energy (NEE), the biggest component of the Utilities ETF (XLU), had total returns of 130% in the last five years.
Dominion Resources’ Higher Debt Confirms Its Stretched Financials
Dominion Resources (D) depends upon both internal and external sources of financing for its capital expenses and dividend payments.
A Look at Institutional Investors’ Holdings in Exelon
In the past couple of months, institutions have increased their positions in Exelon by nearly 2%, from 85.6% to 87.2%, as of October 3, 2016.
What Could Impact PPL’s Dividends in the Future?
PPL’s (PPL) management expects fair annual earnings growth of 5%-6% through 2020, which will likely facilitate its dividend growth.
How Top Utility Stocks Fared in the First Half of 2018
The utility sector, among the most vulnerable to interest rate hikes, seems strong despite the rate hike in mid-June.
Strong Dollar Will Likely Drag AES Corporation’s 4Q15 Numbers
In 4Q15, AES Corporation is expected to report earnings of $0.33 per share in 4Q15—compared to earnings of $0.41 per share in 4Q14.
A Look at American Electric Power’s Healthy Credit Profile
American Electric Power (AEP) has an attractive debt profile, with the company’s debt making up just 7% of its consolidated debt.
NextEra Energy: A Look at Analysts’ Price Targets
According to Wall Street analysts, NextEra Energy (NEE) has the potential to rise 11% during the next year.
How Utilities Are Likely to Get Impacted by Higher Interest Rates
US utilities have been one of the main beneficiaries of the near-zero interest rate environment for the past ten years.
How Higher Interest Rates Hamper Utilities
The expected rise in US interest rates later this year may dent the profitability of utilities, given their higher outflows toward debt servicing.
How Dominion Energy’s Dividend Profile Compares to Peers
Dominion Energy (D), the third-largest utility, declared a per share dividend of $0.84 per share for 1Q18 last month.
Generation Capacity Additions: Which Source Will Lead in 2016?
New power generation capacity additions in 2015 were mainly contributed by wind, natural gas, and solar. This trend is expected to persist in 2016 as well.
Will AES’s Unstable Earnings Even out Soon?
AES’s management forecasts an 18% fall in EPS (earnings per share) this year due to currency fluctuations and weaker power prices globally.
What Are Institutional Investors Doing with NRG Energy?
Institutional investors decreased their positions in NRG Energy (NRG) in June 2016.
Southern Company and Duke Energy’s Payout Ratios
For the last 12 months, Southern Company’s (SO) payout ratio was ~76%, while Duke Energy’s (DUK) ratio was close to 97%.
Will Duke Energy Stock Continue to Recover?
Currently, Duke Energy (DUK) stock is trading 3% above its 50-day moving average and 3% below its 200-day moving average.
Is Xcel Energy Poised for Long-Term Growth?
Xcel Energy’s (XEL) capital spending plan and actions to reduce regulatory lags could improve its earnings growth significantly during the next few years.
Dominion Energy and NextEra Energy: Impact on Dividends
Dominion Energy (D) and NextEra Energy (NEE) are both offering double-digit dividend growth for the next few years.
These Big Utilities Are Paying Higher Dividends Now
Sempra Energy paid annual dividends totaling $3.02 per share in 2016, while EIX and PCG paid per-share dividends of $1.98 and $1.93, respectively, in 2016.
NextEra Energy Stays Strong in Q2, Profit Rises 13%
Renewables giant NextEra Energy (NEE) has once again shown its mettle, continuing its strong quarterly earnings streak.
How Duke Energy’s Dividend Growth Has Trended
Duke Energy’s (DUK) dividend growth rate in the last five years was well below the industry average.
What Could Drive NextEra Energy’s 1Q17 Earnings?
NextEra Energy (NEE) is estimated to report earnings of $1.53 per share for 1Q17. It reported earnings of $1.55 per share in 1Q16.
Duke Energy Expects Higher Dividend Growth
Duke Energy (DUK) aims to increase its dividend per share 4%–6% annually for the next few years, which is in line with the industry average.
Top Utilities’ Total Returns in the Past Year
NextEra Energy (NEE) leads the pack with total returns of 21% in the past year. NextEra Energy increased its dividend per share 13%.
NRG Energy’s Chart Indicators after Its 2Q17 Earnings
NRG Energy (NRG) stock has nearly doubled this year. Currently, it’s trading at a 25% and 48% premium to its 50-day and 200-day moving average levels.
Analyzing Southern Company Stock
Southern Company reported adjusted earnings of $0.88 per share for 1Q18 and exceeded the consensus estimates.
Figuring Out Which Is Better: Utility Stocks or ETFs?
Though electric sales have shown flattish growth in the last few years, US utilities have managed to distribute stable or increasing dividends.
No Analysts Recommend a “Sell” on Xcel Energy
Of the 18 analysts tracking Xcel Energy, 13 recommend it as a “hold,” five recommend it as a “buy,” and none recommend it as a “sell.”
Southern Company Stock Remains Weak amid Vogtle Worries
Southern Company (SO) stock has continued to show weakness recently amid increasing uncertainty regarding the fate of Plant Vogtle.
How Has Duke Energy Performed Recently?
Duke Energy stock is currently trading at an EV-to-EBITDA valuation multiple of 12.5x against its five-year historical average of 11.0x.
These US Utilities Are Trading at Towering Valuations
Dominion Energy’s (D) five-year average valuation multiple is around 14x, while the industry average is near 10x.
How Does PPL Corporation Look ahead of Its 4Q16 Earnings?
PPL projects earnings growth of 6%–8% annually for US utilities for the next few years, while its UK segment’s earnings are expected to be driven by the movement of the British pound.
Why NextEra Energy Seems Attractive Right Now
According to Wall Street analysts, the top constituent of the S&P 500 Utilities Index, NextEra Energy (NEE), has a price target of $149.08 against its current market price of $141.07.
Utilities Debt: A Growth Driver or a Risk Alert?
Utilities borrowed heavily in the post-financial crisis in order to take advantage of the near-zero interest rates. As a result, the leverage of utilities increased significantly
What’s Ahead for Duke Energy Stock?
Duke Energy rallied 9% in 2016, roughly tracking the Utilities Select Sector SPDR. Dominion Resources rose 12% in 2016, while Peer NextEra Energy rose 15%.
Where US Utilities Might Go from Current Levels
Weakness in utilities became evident when the Utilities Select Sector SPDR (XLU) corrected more than 6% after hitting its recent high of $54.63 last month.
Huge Rise in FirstEnergy’s Short Interest: What It Means
Short interest in FirstEnergy rose more than 17% on March 15, 2017. Total shorted shares in the company were 8.7 million on February 28, 2017.
Volatility: Risks and Rewards Go Hand in Hand
The Sharpe ratio is calculated using standard deviation as its volatility measure.
Analyzing Top Utilities’ Current Valuation
Currently, utilities are trading at a PE (price-to-earnings) multiple of 13x—compared to their historical average valuation of ~14x–15x.
How Do Analysts View Dominion Resources’s Dim Outlook for 2017?
Analysts expect a 9.2% rise in Dominion Resources (D) over the next year.
What’s in Store for Dominion Energy Stock?
Dominion Energy (D), one of the laggards among top utilities this year, seemed strong lately and is currently trading close to an eight-month high.
How Analysts See Dominion Resources ahead of Its 4Q16 Earnings
Of the 21 analysts tracking Dominion Resources on January 20, 2017, four recommended it as a “strong buy,” while three recommended it as a “buy.”
What Factors Triggered NiSource’s 2Q16 Earnings?
NiSource (NI) reported its 2Q16 earnings on August 2, 2016. It reported net operating earnings of $0.08 per share in the quarter.
Why NextEra Energy Could Be an Attractive Option for 2017
Of the total 18 analysts tracking NextEra Energy on December 27, 2016, five recommend it as “strong buy” while 11 recommend it as a “buy.” Two analysts recommend NextEra Energy as a “hold,” and none of the analysts offered a “sell” recommendation.
Analysts Expect Huge Upside Potential in PPL Stock
According to analysts’ consensus, PPL (PPL) stock offers a handsome potential upside of ~22% in a year with a mean target price of $33.5.
Energy Transfer’s Strong Growth Continued in Q4 2018
Energy Transfer (ET) released its fourth-quarter and full-year 2018 earnings yesterday.
Highest Dividend Growth: Comparing NEE, EIX, and AWK
Utilities have been weak compared to the broader markets this year largely due to the strength in the Treasury yields.
A Closer Look at Southern Company’s Kemper Power Plant
Southern Company (SO), one of the largest regulated utilities, finished 2016 on a decent note.
NRG Energy’s Valuation Compared to Its Peers
Currently, NRG Energy (NRG) stock is trading at a forward PE ratio of 8.5x based on its estimated EPS in 2019.
Dominion Energy’s Target Prices and Growth Outlook
Dominion Energy (D) has a target price of $79.31—compared to its current market price of $77.86, which implies an estimated gain of 2%.
A Look at Dominion Resources’s Price Targets and Growth Outlook
Of the 22 analysts tracking Dominion Resources on February 23, 2017, four recommended it as a “strong buy,” while four recommended it as a “buy.”
Southern Company Stock Surges after Its 2Q17 Earnings
At 4.8%, Southern Company is currently the highest-yielding utility among the top utilities in the sector.
Dominion Energy or Sempra Energy: Which Could Be Stronger?
Dominion Energy (D) announced its agreement to buy SCANA (SCG) on January 3, 2017. The deal is expected to accelerate Dominion Energy’s earnings growth.
Which Utility Will Pay Higher Dividends in 2017?
NextEra Energy (NEE) paid annual dividends of $3.48 per share in 2016, while Southern Company (SO) paid $2.22 per share last year.
SO, NEE, and DUK: Looking at Top Utilities’ Price Targets
Let’s have a look at the price targets for top utilities in this part of our series. According to Wall Street analyst consensus, Southern Company (SO) stock has a price target of $51.47.
What Do Analysts Think of Southern Company?
Analysts have given Southern Company (SO) a consensus price target of $50.81 for the next year. This price target indicates a potential fall of 0.4%.
Do Analysts See Upside in NRG Energy?
Of the 14 analysts tracking NRG Energy, five recommend it as a “buy,” four recommend it as a “strong buy,” and five recommend it as a “hold.”
What to Expect From NextEra Energy and Its Peers in Q2
NextEra Energy (NEE) will likely report its second-quarter earnings on July 24. The utility is expected to report an EPS of $2.28 for the quarter ended June 30.
Will US Utility Mergers and Acquisitions Increase after Brexit?
Investors may prefer to remain safe during turbulent times and could turn to utilities as Brexit becomes a reality.
NRG Energy’s Price Targets and Analyst Recommendations
According to Wall Street analysts, NRG Energy’s (NRG) price target for the next year is $20.36. That implies an estimated rise of nearly 12.0%.
American Electric Power’s Dividend Yield Compared to Peers
American Electric Power (AEP), one of the largest utilities in the country, has declared a dividend of $0.59 per share for the third quarter of 2017.
Comparing NRG Energy’s Valuation to Its Peers
Currently, NRG Energy (NRG) is trading at an EV-to-EBITDA valuation of ~12x—compared to its five-year historical average valuation of 11x.
These S&P 500 Utility Stocks Offer the Most Potential Upside
NRG Energy (NRG), the leading merchant power player stock and one of the smallest components of the S&P 500 Utilities Index (XLU), has a mean price target of $36.50 against its current market price of $31.20.
How Do Barrick Gold and Newmont Goldcorp Stack Up?
So far, Barrick Gold (GOLD) stock has been trading in a narrow range in the fourth quarter. The stock has risen almost 30% in 2019.
Which Utility Will Pay Higher Dividends in 2017?
NextEra Energy (NEE) paid dividends of $3.48 per share in 2016. In 2017, it’s expected to pay dividends of $3.93 per share.
Will US Water Utilities See the Early-2016 Days Again?
US water utilities saw a big stock rally 1H16, rising more sharply than electric utilities. But they’ve lost most of those gains so far in 2H16.
How Hurricane Irma Affected Duke Energy’s 3Q17 Earnings
Duke Energy reported total revenues of $6.5 billion in 3Q17 against its revenues of $6.8 billion in the corresponding quarter last year.
How NRG Energy Is Valued Compared to Its Peers
NRG Energy (NRG) stock seems to be trading at a fair valuation compared to the industry average and its historical average.
Which Utility Delivered the Highest Total Returns This Year?
Although utilities’ total returns were dominated mostly by stock appreciation this year, stable and increasing dividends were also an important factor.
Do You Own Analysts’ Favorite Utility Stocks?
Utilities witnessed an even harsher fall amid broader markets’ sell-off. However, utilities outperformed the S&P 500 in 2018.
Energy Sources: Capacity Factor and Capacity Additions
Capacity additions in wind power have been quite volatile over the past few years due to uncertainty over tax incentive policies.
NRG Energy Stock: Analysts’ Recommendations
Among the ten analysts tracking NRG Energy, four recommended a “strong buy,” five recommended a “buy,” and one recommended a “hold.”
Institutional Investment in PEG in 4Q17
The Vanguard Group added net 0.46 million shares of Public Service Enterprise Group (PEG) in 4Q17.
Exelon Beats Earnings Estimates, Raises Guidance
Exelon Corporation (EXC) reported its third quarter earnings on October 26, 2016. It reported earnings of $0.91 per share for the quarter.
Where NextEra Energy Stock Could Go in the Short Term
Broader utilities (XLU) have witnessed notable weakness recently mainly due to the strength in Treasury yields.
What Do Brokers Think of AES before 2Q16 Earnings?
Wall Street analysts have given AES (AES) an estimated median price target of $13. It implies a possible upside of 3% in the next year.
Analysts Are Cautious on FirstEnergy but Expect a Robust Gain
Of the 18 analysts tracking FirstEnergy (FE), eight recommend “buy,” six recommend “hold,” and four recommend “strong buy.”
Southern Company’s Dividend Outlook for 2017
Southern Company stock underperformed utilities at large and the broader markets in the last five years. Southern Company stock rose 1% in the past year.
NEE, DUK, SO, and D: Comparing Top Utilities’ Total Returns
NextEra Energy (NEE) beat its peers in terms of returns in the last few years. NextEra Energy returned 14% in 2018.
NRG Energy Stock Rose 30% Due to Its Transformation Plan
There was a tsunami in NRG Energy (NRG) shares on July 12, 2017. NRG Energy stock opened 19% up and maintained the uptrend throughout the day.
Are Analysts Still Positive about NextEra Energy?
Wall Street analysts still seem positive about NextEra Energy (NEE), particularly because it’s risen so much compared to last year’s levels, resulting in its premium valuation.
PG&E Stock Continued to Slide on July 15
The large swings for PG&E (PCG) stock may not end anytime soon.
Understanding Duke Energy’s Price Target
Analysts estimate that Duke Energy has a one-year price target of $80.4, which implies an estimated upside of ~3.5% from its current market price of $77.75.
D, DUK, NEE, and SO: Top Utilities’ Dividends
Dominion Resources (D) paid annual dividends of $2.80 in 2016. Duke Energy (DUK) paid dividends of $3.36 per share last year.
Utility Stocks Slipped, Treasury Yields Raced to a Record High
US utility stocks slipped 0.8% on May 15 after ten-year Treasury yields peaked at 3.1%—a seven-year high. Broader markets also corrected 0.7%.
What to Expect from NiSource’s 2Q16 Earnings
Analysts are expecting NiSource (NI) to report earnings per share (or EPS) of $0.07 in 2Q16. In the same quarter last year, it posted EPS of $0.18.
SO on the Street: Analyst Recommendations and Price Targets
The consensus analyst price target for Southern Company (SO) is $50.76. Its current market price is $49.78, implying a rise of 2% over the next year.
American Electric Power’s Total Returns Compared to Its Peers
In the last year, American Electric Power returned 21%—compared to broader utilities’ average returns of ~11%. During the same period, SPY returned 22%.
Brokers’ Recommendations for NiSource after Its 2Q16 Earnings
According to Wall Street analysts’ estimates, NiSource (NI) has a one-year median price target of $25.11 compared to its current market price of $25.94.
VPU Versus XLU: Which Utility ETF Is Better?
Utility ETFs have performed well in the last one year. The Vanguard Utilities Fund ETF (VPU) has been no exception to this.