On average, utilities currently offer a dividend yield of 3.2% compared to the broader market’s average yield of 1.8% and the ten-year Treasury yield of 2.7%.
NextEra Energy (NEE), NiSource (NI), and CMS Energy (CMS) have beaten their peers as well as the broader markets in terms of total returns in the last five years.
WEC Energy (WEC) has a mean price target of $63.8, compared with its current market price of $65.0, which implies a possible downside of 2% going forward.
On January 18, 2017, NRG Energy (NRG) had the highest implied volatility among the utility companies that make up the Utilities Select Sector SPDR ETF (XLU).
According to analysts’ estimates, CenterPoint Energy (CNP) has a price target of $24.50, which implies a downside of more than 1% during the next year. It is currently trading at $24.76.
On December 21, NRG Energy (NRG) had the highest implied volatility among the utility companies that make up the Utilities Select Sector SPDR ETF (XLU).
On November 2, 2016, NRG Energy had a short interest-to-equity float ratio of 5.1%, the highest among the utilities stocks that make up the Utilities Select Sector SPDR ETF.
At the end of 2Q16, CMS Energy had total debt of $9.5 billion. Its DE (debt-to-equity) ratio stands at 1.2x, while its debt-to-market-capitalization ratio is 0.8x.
In the past five years, CMS Energy has experienced flat or diminishing growth in its cash flow from operations, while its capital expenditure has significantly increased.
$12 billion CMS Energy has one of the highest earnings growth rates in the industry. The company forecasts that it will grow 5%–7% in 2016 and 6%–8% thereafter.
US utilities became expensive again in the last few trading sessions after the Fed kept interest rates unchanged. Let’s see how other utilities are valued in comparison to CMS Energy.
Utilities gain momentum Midsize utilities have outrun their large-cap peers in this year’s rally. Interestingly, they’ve also gained momentum in the last few trading sessions after correcting 10%–12%. The $12 billion CMS Energy (CMS) is one such utility. It’s risen more than 22% since the beginning of 2016. In the same period, the Utilities Select […]
CenterPoint Energy is trading at a forward yield of 4.6%. According to analyst estimates, its dividends are expected to increase 4.3% over the next two years.
Southern Company (SO) has the lowest implied volatility figure of all the utility companies. Its YTD returns are 13.0%. Its five-day returns are -0.3%.
As of August 3, NRG Energy has the highest short interest-to-equity float ratio of all the utility stocks (XLU) at 5.9%. One month ago, its ratio was 5.9%.
As of July 27, NRG Energy has the highest short interest-to-equity float ratio of all the utility stocks (XLU) at 5.9%. One month ago, its ratio was 5.4%.
Of the 17 analysts tracking Xcel Energy, 11 recommend it as a “hold” and four recommend it as a “buy.” Two analysts recommended it as a “sell” on July 26, 2016.
According to analyst estimates, DTE Energy (DTE) has a median price target of $101.60 for next year. This implies an upside of nearly 4% against its current Market price of $98.
After its strong performance in 2Q16, DTE Energy management increased its 2016 operating earnings guidance from $4.80–$5.05 per share to $4.91–$5.19 per share.
DTE Energy (DTE), Michigan’s largest utility, will announce its 2Q16 financial results on July 26, 2016. DTE’s revenues may have a significant impact in 2Q16 due to Michigan’s improving economy.
From pure-play regulated utilities to merchant power players and from small-caps to large-caps, most utility stocks have more or less ridden the 2016 rally.
CenterPoint Energy (CNP) reported earnings of $0.36 per share in 1Q16 against $0.30 in 1Q15. Earnings were driven by lower operations and maintenance expenses and rate relief.
Regulated utilities are expected to pay increased or stable dividends compared to unregulated ones. Investors generally expect higher yields to compensate for higher risks.
At the end of the fourth quarter of 2015, Xcel Energy’s total debt stood at $13 billion. Its debt-to-equity ratio was 1.3x, and its debt-to-capitalization ratio was 0.6x.
Xcel Energy is looking to improve earnings by reducing the regulatory lag. Regulatory lag for a utility (IDU) is the difference of time between capital spending and rate recovery.
Xcel Energy (XEL) is aiming to improve its earnings by reducing its regulatory lag. Regulatory lag for a utility is the difference of time between capital spending and rate recovery.
Despite the challenges, analysts seem fairly optimistic about DTE Energy. As of March 29, 2016, DTE had no “sell” recommendations from Wall Street analysts.
Investors are hoping DTE Energy’s (DTE) rally will last a tad longer as it nears its all-time high. So far in 2016, it has rallied 14%, while utilities rose 12%.
The sudden surge in DTE Energy’s forward multiple can be explained by its rally early this year. It was in line with the utility sector’s rally triggered by the FOMC’s January meeting.
DTE Energy (DTE) is trading at a forward yield of 3.3%, and its expected dividend growth for the next two years is 5%. In the last five years, its dividends have grown by 5.4% annually
Currently, DTE Energy (DTE) is trading at a discount compared to its own three-year historical forward dividend yield. Its smooth rally in the last six months could be one of the reasons.
DTE Energy’s (DTE) pipeline segment is expected to grow 8%–10% annually, and electric is forecast to grow 5%. The pipeline unit could be the earnings driver for the next couple of years.
Utilities have outperformed the S&P 500 by more than 8% in 2016. But the dovish stance from the Fed and healthy 4Q15 earnings also fueled utilities’ rally.
Michigan’s largest utility company DTE Energy posted its 4Q15 earnings on February 10, 2016. DTE reported quarterly operating earnings of $1.01 per share.
According to Wall Street analysts’ estimates, DTE Energy Company (DTE) has a one-year price target of $87.30. This implies an upside of just 1.3% in one year based on its current market price of $86.20 as of February 4, 2016.
The regulated gas and electric utility businesses contribute nearly 55% of DTE Energy’s total revenues. On the other hand, non-utility business accounts for 45% of DTE’s total revenues.
Michigan’s largest utility, DTE Energy Company, is set to report its 4Q15 earnings on February 10, 2016. Utilities from the US Midwest that have reported their 4Q15 earnings so far have faltered due to milder weather during the quarter.
All the sectors of the SPY turned red on the day. Stocks belonging to the consumer discretionary sector, the technology sector, and the energy sector saw major drops.
The tocks that performed well in volatile times were Teco Energy (TE), Nisource (NI), CMS Energy (CMS), AGL Resources (GAS), and Integrys Energy Group (TEG).
