American Electric Power Company Inc.
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.
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.
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%.
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.
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.
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%.
Dominion Resources’ 4Q16 Revenues Rose 20% but Stock Fell 6%
Dominion Resources (D) reported its 4Q16 and fiscal 2016 results on February 1, 2017. The Virginia-based power and energy company reported ~$3.1 billion in revenues, ~20% higher than its 4Q15 revenues.
How Does American Electric Power’s Credit Profile Look among Peers?
At the end of 2Q16, AEP had total debt of $21.6 billion. Its DE ratio stands at 1.2x, while its debt-to-market-capitalization ratio is 0.7x.
What Are AEP’s Price Targets ahead of 4Q16 Earnings?
According to Wall Street analysts, American Electric Power (AEP) has a median price target of $66.81, which implies an estimated upside of 5% in the next year.
Looking at Duke Energy’s Generation Mix
In 2008, coal accounted for almost half of the total power generation in the country, while coal-fired generation made up 30% of total power in 2016.
Analysts’ Views and Price Targets for Duke Energy and Peers
Analyst price target According to Wall Street analysts’ consensus, Duke Energy (DUK) stock has a mean price target of $82.30 and a current market price of $77.20, suggesting upside potential of 6.5% in the next 12 months. Among the 18 Wall Street analysts tracking Duke Energy on February 26, 2018, one had recommended “strong buy,” four had recommended “buy,” […]
Why did the market punish Exelon?
Exelon Corporation’s (EXC) stock has been hammered in the last six years. In 2008, the stock was trading at ~$90 per share. Early this year, the stock was available at less than $27 per share.
Why different types of charts are used in technical analysis
Chart inspection is the basic form of technical analysis. In technical analysis charts, we can customize the time frames in the charts. We can also identify different trends in different time frames.
GAMCO wants National Fuel Gas to spin off its utility segment
A spinoff? As we discussed in the earlier part of this series, National Fuel Gas’ (NFG) GAMCO believes a standalone utility company can participate in industry consolidation GAMCO Investors proposed in its filing, “We believe that a spin-off of NFG’s local distribution utility segment into a separately traded public company, thus creating two C-corporations (a […]
How Analysts Rate American Electric following Its 4Q16 Earnings
According to Wall Street analysts, American Electric Power (AEP) has a mean price target of $67.08, which implies an estimated upside of 7% in the next year.
Leaders and Laggards: How Top Utility Stocks Fared Last Week
Utilities had marginal gains last week and underperformed broader markets. The Utilities Select Sector SPDR ETF (XLU) rose 0.05%.
Must-know: Duke’s top institutional owners
Duke Energy (DUK) is one of the most popular stocks for institutional investors in the utilities industry. Duke’s strong yields and stable business model have attracted institutional investors.
Overview: Proposal could shift electricity generators’ asset-mix
Major power companies have noted that they’re in the process of shifting their portfolios away from coal towards natural gas.
Clean Coal: The Future of the US Coal Mining Industry
Clean coal aims to minimize the emission of harmful greenhouse gases with clean coal technologies.
Why Dominion Resources’ Rally Might Not Be Done Yet
The Brexit rally in utilities could push their valuations up. On June 28, 2016, Dominion Resources was trading at an EV-to-EBITDA valuation of 14.4x.
DUK: Analyzing Duke Energy’s Dividend Profile
Top regulated utility Duke Energy (DUK) declared a quarterly dividend of $0.945 per share in October. The dividend is set to be paid on December 16.
What Sets AEP’s Dividends Apart?
American Electric Power Company (AEP) declared a quarterly dividend of $0.70 per share in October. These dividends will be paid on December 12.
A Must-Know Look at Consolidated Edison’s Dividends
Consolidated Edison has a dividend yield of 3.4%, higher than utilities’ average of 3%. It declared a quarterly dividend of $0.74 per share in October.
New England and the Pacific are great regions to produce power
The US is divided into nine divisions. The Pacific and New England divisions had the highest year-over-year, or YoY, growth in electricity prices in September 2014.
Wholesale electricity prices mirrors natural gas price
With the exception of Texas, wholesale prices in all other US regions were low.
First Energy: An overview of a power utility
First Energy’s operations include electricity generation, electricity sales, and transmission and delivery of electricity to six million customers in six U.S. states.
First Energy’s revenue mainly from regulated T&D
First Energy operates in six northeastern U.S. states. This translates to a service territory of 65,000 square miles. These states are allowed deregulation of electricity, but First Energy’s T&D network remains regulated.
AEP and Entergy see elevated growth in electricity production
Except for the Rocky Mountain, Southeast, and Pacific Southwest, all nine US divisions registered growth in week-over-week electricity production.
Importance of the stochastic indicator in technical analysis
The stochastic indicator compares the stock’s closing price with the stock’s price over a certain time period. In an uptrend, the stock price tends to close near its high.
Why electricity prices vary across different regions in the US
Electricity prices also vary across regions and states. Changes in regional electricity prices are also an important factor for the power utilities industry.
Utilities performance linked to regional electricity output
The South Central and Pacific Northwest divisions saw the highest jump in week-over-week electricity production. Which utilities operate in these regions?
Why Utilities Are Still Attractive despite Their Valuations
While almost all utility stocks are looking expensive right now, a T. Rowe Price analyst has called utilities “the most underappreciated” sector.
Utilities Stand Strong amid Volatile Broader Markets
Utility stocks soared as Treasury yields fell on September 24. The Utilities Select Sector SPDR ETF gained 1.2% while the S&P 500 tumbled 0.8% yesterday.
Is Joe Biden’s Green New Deal Really Feasible?
Joe Biden has proposed a climate change framework that aims to zero down on carbon emissions and create millions of new jobs by 2050.
Why Utilities Underperformed the Broader Market Last Week
The defensives and utilities sector fell more than 2% last week while broader markets fell just 0.3%. Here’s why.
NextEra Energy Continues Its Earnings Growth Streak in Q1
NextEra Energy reported its first-quarter earnings results on April 23. It posted adjusted EPS of $2.20, beating the consensus estimate.
Analysts Expect Higher Earnings from AEP in Q1 2019
American Electric Power Company (AEP) is set to release its first-quarter earnings results on April 25.
Utilities: How These Defensives Fared in March’s Last Week
Improvements on the trade front with China pulled the markets higher last week, with the S&P 500 rising ~1.2%.
Duke Energy and Southern Company’s Payout Ratios
Recently, US utilities’ payout ratio averaged ~65%–75%. Duke Energy’s payout ratio was 97%, while Southern Company’s ratio was 110% in 2018.
Comparing Duke Energy and Southern Company’s Dividends
Southern Company is trading at a yield of 4.7%, while Duke Energy offers a yield of 4.1%—notably higher than utilities at large yielding ~3%.
Is Dominion Trading at a Premium Compared to Its Peers?
Dominion Energy’s (D) EV-to-EBITDA (enterprise value-to-EBITDA) multiple is 14.05x, and its five-year average EV-to-EBITDA multiple is 14.11x.
American Electric’s 4Q16 Revenue Rises 5% Year-over-Year
American Electric Power reported its 4Q16 and 2016 financial results on January 26, 2017. It reported total revenue of $3.8 billion in 4Q16, a rise of 5% over $3.6 billion in 4Q15.
How Is Southern Company Valued?
Southern Company (SO) is currently trading at an EV-to-EBITDA valuation of 12x. Its five-year historical average valuation multiple is 11x.
Inside NextEra Energy’s Latest Price Targets
NextEra Energy (NEE) is looking at an estimated gain of 14% through next year—one of the highest among the S&P 500 utilities.
How Is NextEra Energy Valued before Its 4Q16 Results?
On January 19, 2017, NextEra Energy (NEE) was trading at an EV-to-EBITDA ratio of 11x. Its five-year historical average valuation multiple stands near 11x.
Why NextEra Energy Likely Continued Its Strong Performance in 4Q16
Renewables giant NextEra is estimated to report total revenues of ~$4.6 billion for 4Q16, as compared to total revenues of just over $4 billion in 4Q15.
What’s American Electric Power’s Current Valuation?
Just like many other utility companies, American Electric Power (AEP) rallied sharply in the first half of last year but fell in the latter half.
Will American Electric Power Beat 4Q16 Earnings Estimates?
According to analyst estimates, American Electric Power (AEP) will report earnings of $0.54 per share.
Volatile Utility Stocks That Have Been Moving Lately
NRG Energy has risen 6.9% on a year-to-date basis. It has the highest implied volatility of all the utility companies that make up the Utilities Select Sector SPDR ETF.
Growth Prospects and Analyst Price Targets for Duke Energy
The consensus price target for Duke Energy (DUK) for the next year is $80.88, which implies an upside of 9.5% from its current market price of $73.88.
Why Does Duke Energy Yield Better Than the Industry Average?
Duke Energy is one of the highest-yielding S&P 500 Utilities stocks. Its large regulated operations fetch stable earnings and offer stable dividends.
AEP, DUK, and SO: Are Utilities Trading Cheap?
Investors may find US utilities cheaper compared to where they were a couple of months ago.
SO, DUK, and AEP: Analyzing Top Utilities’ Current Valuations
On November 23, 2016, Southern Company was trading at an EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple of slightly more than 12x.
A Look at NextEra Energy’s Return on Equity
NextEra Energy’s consolidated ROE has stayed above 12% for a couple of quarters—higher than the authorized ROE of 11% and the industry average of 10%.
Understanding the Total Returns of Top US Utilities
American Electric Power (AEP) has returned nearly 25% in the past year. The stock has rallied more than 12% since the start of 2016.
How Is American Electric Power Valued Compared to Peers?
On September 16, AEP traded at an EV-to-EBITDA valuation of 10x. Its five-year historical average EV-to-EBITDA ratio is 9x. The industry average is ~11x.
Why AEP Plans to Sell Merchant Capacity to Blackstone, ArcLight
AEP’s four power plants located in Ohio and Indiana will be sold to a new joint venture of Blackstone and ArcLight Capital Partners for $2.2 billion.
Returns of Utility Stocks with High and Low Implied Volatility
Southern Company (SO) has the lowest implied volatility figure of all the utility companies. Its YTD returns are 11.6%. Its five-day returns are 2.5%.
Utilities’ Free Cash Flow Continues Downtrend, AEP No Exception
AEP’s free cash flow for 2015 declined to $218 million from $367 million in 2014.
AEP Targets Earnings Growth in 2016 Despite Challenges
Over the next few years, AEP management will be targeting annual earnings growth of 4% to 6%, strongly supported by the company’s regulated operations.
Could AEP’s Sales Mix Grow Healthier If Its Merchant Arm Goes?
AEP’s generation and marketing segment operates in wholesale energy markets.
What Does American Electric Power’s Current Valuation Indicate?
American Electric Power and FirstEnergy (FE) closed down by 2.5% and 11%, respectively, on April 28 when federal regulators blocked income guarantees for their power plants.
American Electric Power’s 1Q16 Earnings: EPS Fell by 20%
American Electric Power’s total revenues in the quarter came in at $4 billion, missing analysts’ estimates. It reported revenues of $4.7 billion in the same quarter last year.
Divesting Merchant Generation to Improve AEP’s Risk Profile
American Electric Power’s (AEP) Vertically Integrated Utilities segment plays a key role in driving its performance, accounting for more than half of its total operating income.
Analysts Expect Lower Earnings from AEP in 1Q16
American Electric Power (AEP) is set to report its 1Q16 results on April 28, 2016. Wall Street analysts are estimating it to report earnings of $1.06 per share in 1Q16.
S&P Downgrades Dominion after Questar Announcement
On February 1, 2016, Standard & Poor’s downgraded Dominion Resources to a credit rating of BBB+ with a stable outlook. The move came after Dominion announced its merger with Questar.
What Is the Outlook for American Electric Power?
American Electric Power’s focus on regulated operations can improve its earnings stability. The stock is currently yielding 3.8% as of January 28, 2016.
Higher Interest Rates Could Be Detrimental to Utilities
Over the past five years, utilities (XLU) have significantly increased their leverage. In fact, this is one of the industries that benefitted from near-zero interest rates.
AEP’s Regulated Segment Boosted 4Q15 Earnings
American Electric Power’s (AEP) vertically integrated utilities posted strong growth during the quarter. This segment witnessed a $0.12 per share rise in operating earnings.
Most Analysts Recommend a “Buy” on NextEra Energy
Following NextEra Energy’s 4Q15 earnings, analysts have a one-year price target of $119 for NEE against its current market price of $108.
NextEra Energy Beats Expectations, Reports Stellar Growth
NextEra Energy reported its 4Q15 earnings on January 28, 2016. NextEra continued its stellar performance, with its net income rising 17% year-over-year.
Rising Interest Rates to Impact NextEra’s Stock Performance
Utilities showed a dismal performance in 2015 due to the fear of higher interest rates. The shares of NextEra rose sharply in December 2015 by gaining 8%.
Will Southern Company’s Revenues Beat Estimates in 4Q15?
If Southern Company meets analysts’ estimates this quarter, it would be 15% rise in revenues over those of 4Q14.
NextEra Energy Seeks Capacity Addition Using Renewables
NEE is further expanding its renewables footprint. In 9M15, it added 225 megawatts of wind capacity and 115 megawatts of solar generation capacity.
Con Edison Allocates Most of Its Capital to Regulated Segment
The regulated electric and gas distribution segments have been the top performers for Con Edison. However, Con Edison sees room for expansion in these areas.
SCANA’s Main Energy Source to Shift from Coal to Nuclear
GENCO is SCANA’s subsidiary that looks after the power generation segment. It has a capacity of 605 megawatts and sells the generated power only to SCE&G.
An Analysis of the Operating Structure of PPL
PPL is concentrated in the UK. It manages utility operations through PPL Global, PPL Electric, Louisville Gas and Electric, and Kentucky Utilities.
What You Should Know about Con Edison’s Operating Structure
Con Edison handles its competitive energy business through its three wholly-owned subsidiaries: Con Edison Solutions, Con Edison Energy, and Con Edison Development.
A Key Overview of FirstEnergy’s Operating Structure
FirstEnergy’s revenues are primarily derived from electric services provided by ten subsidiaries. The company serves a combined population of ~13.5 million.
FirstEnergy Relies Heavily on Coal for Power Generation
FirstEnergy generates power from a diverse mix of primary energy sources but is primarily dependent on coal, which accounts for 57% of its power generation.
Utilities Will Concentrate on Transmission and Distribution
Utilities (IDU) wanted to enhance their operational efficiency when their top line grew. However, the earnings failed to impress.
FuelCell Energy Falls after Reverse Split and Fiscal 4Q15 Results
A global player in fuel cell power plants, FuelCell Energy (FCEL) reported its fiscal 4Q15 results for the period ended October 31, 2015.
Duke Energy: Analyzing the Fuel Mix of the Largest Utility
In 2014, 42% of electricity generated by Duke Energy came from coal. It’s currently shifting its dependence from coal to renewable energy sources.
American Electric Power’s Balanced Geographical Revenue Mix
American Electric Power has a geographically diversified market combination, with a major chunk of its revenue coming from its homeland Ohio.
Moving Average Analysis of SPY’s Utilities Sector
The average ETF weight of the electric utilities stocks in the SPDR S&P 500 ETF (SPY) is 0.08%. Their beta value is less than 1, and thus they’re less volatile.
Analyzing Exelon’s Key Revenue Drivers
Demand growth for electricity in the last decade has been sluggish due to increasingly energy-efficient devices and equipment.
American Electric Power’s Revenue Mix
American Electric Power’s primary operating segments are Vertically Integrated Utilities, Transmission & Distribution, and Generation & Marketing.
American Electric Power: A Top US Electric Utility Company
American Electric Power is one of the top electric utility companies in the United States, serving more than 5.4 million customers located in 11 states.
AES Is Streamlining Its Balance Sheet to Generate Cash
AES is taking steps to streamline its operations and reduce complexity, exiting many markets and businesses where it doesn’t have a competitive advantage.
How Does AES Manage Its Businesses across 18 Countries?
AES has businesses spread across 18 countries and has various operating subsidiaries, each focusing on a specific area of business.
Why National Fuel Gas’s Utility segment’s earnings are down
National Fuel Gas (NFG), which is seeing activism from GAMCO Investors, noted in its latest fiscal 3Q14 results that its earnings growth was driven by higher earnings in the Midstream and Upstream businesses.
Must-know: Why the electric utilities industry is important
The electric utilities industry is important for the economy because all businesses require electricity to operate. The EIA predicts that electricity demand in the U.S. will increase by 29% from 2012 to 2040. It will require more electricity to be generated.
Must-know: Electric utility tariffs and pricing
The residential tariff for electricity is the most expensive. In contrast, the tariff for industrial electricity is the cheapest in the U.S. Some of the differences in the costs are a result of higher distribution and stepping down—reduction in voltage—cost. The cost is associated with the residential supply of electricity.
Must-know: The supply chain delivers electricity
The industry’s supply chain consists of three broad categories—generation, transmission, and distribution. Power generation requires a fuel source—for example, coal, nuclear, natural gas, or wind—and a power plant to convert the fuel source into electricity.