AES Corporation (AES) stock, the top gainer of 2019, offers an estimated gain of just 0.5% for the next 12 months based on analysts’ target price of $17.8.
FirstEnergy (FE) stock is currently trading at an EV-to-EBITDA valuation multiple of 8.0x, which is lower than its five-year historical average of 9.0x.
FirstEnergy (FE) stock is currently trading at an EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) valuation of 8.4x.
In this series, we’ll take a look at the top ten largest utility stocks of the S&P 500 Index. We’ll discuss their recent stock performances, valuations, and price targets.
FirstEnergy stock offers a potential gain of 10% over the next year. The stock has a mean price target of $34.47, compared with its current market price of $31.38.
Public Service Enterprise Group (PEG) has a mean price target of $48.35 against its current price level of $45.60. This indicates a possible gain of ~6.0% going forward.
FirstEnergy stock has been in a downtrend for several years—which could be why it’s trading at such a deep discount to its historical and industry averages.
US utilities including giants like Duke Energy (DUK) and Southern Company (SO) have done fairly well in the last few months compared to broader markets.
According to analysts’ estimates, Exelon (EXC) is expected to report earnings of $0.45 per share in 4Q16. In 4Q15, it posted earnings of $0.38 per share.
Exelon will report its 4Q16 and fiscal 2016 financial results on February 8, 2017. Analysts expect it to report total revenues of $7,488 million for 4Q16.
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).
FirstEnergy’s (FE) dividends fell 13% annually in the last five years. In 2014, FE cut its quarterly dividends from $0.55 per share to $0.36 per share.
Exelon Corporation (EXC) had net debt of $34 billion at the end of 3Q16. EXC has a net debt-to-EBITDA ratio of 4.5x, slightly above the industry average.
FirstEnergy (FE) has been struggling during the last few years due to volatile power prices. Pennsylvania and Ohio are some of FirstEnergy’s key markets.
US utilities switched their generation from coal to low-emitting natural gas in the last few years. Among our hand-picked hybrid utilities, FirstEnergy (FE) still derives more than 55% of its power from coal.
Public Service Enterprise Group (PEG) is expected to report earnings of $0.84 per share in the third quarter of 2016. It earned $0.80 per share in 3Q15.
Southern Company will announce its 3Q16 financial results on October 31, 2016. For the quarter, analysts are expecting the company to report sales of $6 billion.
Electricity generation in the United States rose marginally to 85.4 million MWh in the week ended September 9, 2016, driven by higher generation in the Central Industrial region.
As of July 29, 2016, Public Service Enterprise Group (PEG) is trading at an EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple of 9x.
PPL has an ambitious capital spending plan of ~$15 billion through 2020. Its regulated asset base will go from $25 billion in 2015 to $32 billion in 2020.
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.
Among our selected group of utilities, WEC Energy Group (WEC) has the highest expected dividend growth for the next two years. It’s trading at a forward yield of 3.4%.
Utilities (VPU) with heavy unregulated operations are expected to continue to struggle in 2016 too. Weaker power prices in the unregulated domain may impact their earnings.
NextEra Energy (NEE) is trading at a comparatively lower forward dividend yield than its peers. However, it has the highest expected dividend growth in the next two years.
Public Service Enterprise (PEG) has a strong dividend-paying history, and it has maintained an annual dividend growth rate of 2.6% in the last five years.
Public Service Enterprise (PEG) has a $13 billion capital spending plan for the next five years. This will be mainly funded by long-term debt financing.
Given the centralized power generation model of Public Service Enterprise Group (PEG), expanding its transmission infrastructure is a necessity in order to grow.
Public Service Enterprise Group (PEG) is one of the largest and oldest utilities in North America. Its aging infrastructure has become a serious obstacle in its growth over the last couple of years.
Electricity generation in the US came in at 70.2 million MWh in the week ended December 25. All nine census regions in the US reported a drop in electricity generation during the week.
The Southeast division is the largest division in the United States for electricity generation. It saw an increase of 482,000 MWh, or 2.8%, in electricity production to 17.5 million MWh.
the electricity generation in the US fell by 3.5% to 71.1 million mWh. Electricity generation fell in all of the nine census divisions during the week ended October 9.
Electricity generation in the US dropped 0.5% to 87.6 million megawatt hours during the week ended August 21. Electricity generation in five out of nine census regions fell during the week.
Covanta Holding’s southeastern Massachusetts facility is a 2,700 tons per day, 78 megawatt plant servicing 60 communities. The plant uses a technology called refuse derived fuels.
MGE Energy rose 4.2% to end the March 13 week at $42.52 with a market capitalization of $1.5 billion. An interim report signaled strong annual earnings.
NextEra ranks seventh in efficiency. Yet although NextEra is not the cleanest power utility in the US, its emissions are among the lowest in the industry.
The industrial sector’s electricity consumption has been strong this year, registering positive year-over-year electricity consumption growth for the last consecutive seven months.
Contrary to popular belief, falling natural gas prices affect power companies adversely. Unregulated power companies are more exposed to the risk of falling gas prices than regulated utilities.
For the current year, First Energy is trading at a higher EV/EBITDA than to its peers. However, the drop in forward EV/EBITDA multiples for First Energy is much steeper than its peers.
First Energy’s increase in debt in recent years has affected the company’s debt ratios. First Energy’s debt to equity (or DE) ratio is 1.62x. This is relatively higher than the average DE ratio of 1.32x
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.
Nuclear power plants contribute a high proportion of the electricity produced by Exelon. More than 50% of the company’s capacity is driven by its nuclear fleet.
Institutional investors hold most of Dominion Resources’ (D) outstanding shares. As of June 30, 2014, a total of 351.2 million shares were held by 1,069 institutions.
Electricity is the backbone of a nation’s progress. All of the industries need electricity to operate—directly or indirectly. When a business flourishes, the electricity consumption increases.
Exelon (EXC) split its generation business and its utility business. This means Exelon’s utility subsidiaries’ function is limited to the transmission and delivery of electricity.
