PPL Corp

US mid-size regulated utilities outperformed their bigger counterparts in the past year. Their rally was much steeper—this boosted total returns.

Exelon Corporation (EXC) reported a net income of $440 million in its 2Q14 earnings. The quarterly net income was $14 million lower year-over-year (or YoY).

PPL has utility operations spread over the eastern United States and the United Kingdom. It derives more than half of its earnings from its UK operations.

US utility stocks continued to recover last week after being weak for more than three months. The Utilities Select Sector SPDR ETF (XLU) rose almost 3%.

PPL’s (PPL) management expects fair annual earnings growth of 5%-6% through 2020, which will likely facilitate its dividend growth.

AES Corporation (AES) reported EBITDA margins of 24.3% in the third quarter of 2014. Year-over-year EBITDA margins had dropped from 28.1% in 3Q13.

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.

PPL reported better-than-expected earnings in the second quarter. The company’s earnings grew 6% compared to the same period last year.

PPL Corporation (PPL) is expected to report EPS of $0.56 for the third quarter.

On April 28, 2017, NRG Energy (NRG) had the highest implied volatility among the stocks in the Utilities Select Sector SPDR ETF (XLU).

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.

Currently, utilities offer a yield of 3.4%, which indicates a spread of almost 50 basis points to the ten-year Treasury yield.

Currently, utilities are trading at a PE (price-to-earnings) multiple of 13x—compared to their historical average valuation of ~14x–15x.

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.

On February 15, 2017, NRG Energy had the highest implied volatility among the utility companies that make up the Utilities Select Sector SPDR ETF (XLU).

PPL stock has a median target price of $31.27 compared to its current market price of $29.56—an estimated upside of ~6% for the next 12 months.

Pennsylvania-based PPL (PPL) stock is currently trading at a dividend yield of 5.4%.

PPL Corporation (PPL) stock fell below both its moving average levels in October 2017 and has been trading significantly weak since then.

According to Wall Street analysts, SCANA Corporation (SCG) stock has an expected upside of nearly 22% in a year. It has a mean price target of $47.44 against its current market price of $39.0.

Investors may prefer to remain safe during turbulent times and could turn to utilities as Brexit becomes a reality.

Currently, FirstEnergy is trading at a dividend yield of 3.8%. The company is expected to pay an annualized dividend of $1.44 per share in 2018.

PPL Corporation (PPL) is expected to report earnings per share of $0.48 for 2Q17. In 2Q16, the utility earned $0.56 per share.

Currently, PPL Corporation is trading at a PE (price-to-earnings) multiple of 13.5x compared to its five-year historical average of near 14x.

Although utilities’ total returns were dominated mostly by stock appreciation this year, stable and increasing dividends were also an important factor.

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%.

Duke Energy (DUK) has corrected more than 12% since July 2016. The Utilities Select Sector SPDR (XLU) has also witnessed similar weakness during this period.

Investment-grade bond issuance fell to $26.275 billion last week as compared to $32.35 billion in the previous week.

Earnings and dividend growth for PPL (PPL) for the next few years looks achievable considering its expected rate base growth.

Another positive of Westmoreland Coal Company (WLB) is its customer base. The company supplies coal to utilities with strong balance sheets.

In 2016, the smart rally in midsize regulated utilities has bolstered their valuations. PPL Corporation seems to be overpriced when compared to peers.

According to Wall Street analysts’ estimates, PPL (PPL) offers the highest potential upside of nearly 22% in a year.

Utilities played out well last year amid broader markets’ volatility. They returned more than 6%, while the S&P 500 returned -6% last year.

While Hurricane Harvey and Hurricane Irma left millions of Americans out of power, US utility stocks continued to climb higher last week.

Southern Company’s adjusted ROE was near 13% in 1Q16. By comparison, PPL Corporation fetches ROE close to 12%, which is higher than US peer utilities.

Utilities rose ~2% last week despite the strength in Treasury yields. The benchmark ten-year Treasury yield closed at a multiyear high.

On February 22, NRG Energy (NRG) had the highest implied volatility among the utility companies that make up the Utilities Select Sector SPDR ETF (XLU).

US utility stocks have been rallying for the past several months, and the rally has made them relatively expensive.

The struggling European utilities sector encountered another obstacle in the form of Brexit. Upcoming policy changes will pave the way for them in the future.

On December 19, PPL stock was trading at an EV-to-EBITDA multiple near 10.5x. Its five-year historical average and industry average multiples are near 11x.

The slow-and-steady utilities sector was the top performer yesterday when the broader markets fell 3%.

PPL’s adjusted return on equity usually stays above its US regulated utility peers’ average. It earns higher ROE from its United Kingdom regulated segment.

For 1Q14, Anixter’s results beat on earnings, but missed on revenue.

Currently, Xcel Energy (XEL) stock is trading at a PE multiple of 20.0x compared to its five-year historical average of 18.0x.

Utility stocks seem overvalued. Utilities have reached record levels. They have been trading at inflated valuations for months.

As a group, policymakers seem utterly confused regarding their reading of the economic situation, inflation, and the labor market.

PPL Corporation (PPL) raised its quarterly dividend in fiscal 1Q17 to $0.395 per share.

Analysts expect AES (AES) to report earnings of $0.16 per share in 2Q16. In the same quarter last year, it reported earnings of $0.25 per share.

PPL (PPL) has a price target of $39.19 against its current market price of $39.02, implying an estimated upside of just 0.4%.

PPL (PPL), the top-yielding stock among the S&P 500 Utilities, has underperformed its peers in terms of total returns in 2018.

According to Wall Street analysts, AES has an estimated upside of 6.5% for the next year with a price target of $12.83. Currently, it’s trading at $12.

PPL declared a quarterly dividend of $0.40 per share on August 25, 2017. It has September 7 as its ex-dividend date. The dividend will be paid on October 2.

The power utilities sector remained under stress last week. The representative of the sector, the Utilities Select Sector SPDR (XLU), dropped by 4.1%.

PPL (PPL) expects fair annual earnings growth for the next few years, of ~5%–6%, which could facilitate dividend growth.

PPL Corporation (PPL) stock is trading at a PE multiple of 13x compared to its five-year historical average of 14x.

The Illinois Basin produced ~120 million tons of coal during the 12 months ending September 13, 2014. This was ~65% of the interior region’s total production of 185 million tons during the same period. With estimates reserves of ~50 billion tons, the basin ranks second only to the gigantic PRB.

Almost all utility stocks currently offer unattractive upside potentials due to their recent rallies.

PPL Corporation (PPL) is currently trading at a dividend yield of 5.8%, which is much higher than utilities’ average yield of 3.4%.

According to Wall Street analysts’ estimates, PPL Corporation (PPL) has a mean target price of $37.8—compared to its current market price of $32.4.

The consensus Wall Street analyst price target for PPL (PPL) is $36.47. Its current market price is $34.38, implying a rise of 6.1% over the next year.

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 […]

American Electric Power (AEP) stock is currently trading at an EV-to-EBITDA valuation of 10x, while its five-year historical valuation comes in around 10x.

Fidelity Management added 19.3 million shares of PPL during the quarter and took its total holdings to 6.3%.

Currently, AES’s (AES) dividend yield is ~3.9%. It’s in line with the industry average. AES’s dividend yield improved significantly in the last few years.

Currently, PPL is trading at a PE (price-to-earnings) multiple of 13.5x—compared to its five-year historical average valuation near 14x.

In his June 2016 “Insights” newsletter, Richard Bernstein said that his firm positioned itself for an earnings-driven bull market.

Xcel Energy (XEL) has a one-year median price target of $42.71. It implies an upside of 5% in one year from its current market price of $40.67.

Integrated utility holding company Eversource Energy (ES) is planning to sell 1,200 megawatts of its generation business in the next two years.

PPL Corporation (PPL) is one of the top-yielding utilities in the S&P 500 Utilities Index.

According to analysts’ consensus estimate, PPL Corporation (PPL) stock offers an attractive potential upside of 13% over the next year.

Here, let’s examine the percentage changes in the performance of component sectors of the SPDR S&P 500 ETF (SPY) as of December 2, 2015.

Utility stocks have been rallying for the last two years amid broader market volatility. The rally in these stocks steepened last year.

Recession fears have been hovering over the market throughout this year. However, defensives such as utilities are trading at record highs.

Utility stocks have been some of the strongest equities this year. The stocks are up approximately 20% this year, in line with the Dow Jones.

Generally, investors prefer utility stocks due to their stable dividend-paying capabilities. Currently, they offer an average dividend yield of 3%.

With the exception of Texas, wholesale prices in all other US regions were low.

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.

As of November 6, 2014, Exelon’s dividend yield is 3.64%. It paid $0.31 per share to investors in each quarter of the year.

Forward multiples are a useful metric for gauging relative valuation. A higher multiple usually indicates a richer valuation for a company.

The income from Exelon’s utility segment this quarter was lower than last year. The combined net income from Exelon subsidiaries was $256 million for the third quarter. This means a year-over-year profit drop of 5.4%.

Natural gas is procured by power producers on short-term and spot contracts. Changes in gas prices affect unregulated power companies immediately.

Among the top utilities, Southern Company’s 4.2% dividend yield beats the peer average of 3%. However, PPL’s yield is 5.6% and Dominion Energy yields 4.8%.

Utility stocks continued to underperform broader markets last week.

The unusual rally in utility stocks has pushed them to record valuation multiples this year. On average, they’re currently trading at 19 times their forward earnings!

PPL (PPL) obtains almost two-thirds of its total revenues from the United Kingdom. Its unique geographical diversification bodes well for stable earnings growth. PPL’s premium yield of 5.3% looks attractive against peers’ average of 3.2%.

The utilities sector continues to offer a premium dividend yield along with stable upward price movement. On average, utility stocks are currently yielding 3.2%, while broader markets offer a yield close to ~2%.

Southern Company (SO) stock presents a downside of ~4.0% from its current price level of $55.5. Analysts have given Southern Company stock a target price of $53.3. Of the 20 analysts tracking Southern Company, two analysts rated the stock as a “buy,” 13 analysts rated it as a “hold,” four analysts rated it a “sell,” and one analyst rated it as a “strong sell” as of June 18.

Utility stocks (XLU) are currently trading at a dividend yield of 3.1%, higher than broader markets.

Many utility stocks seem to be trading at a large premium compared to the industry average. One of the top gainers, Exelon’s (EXC), stock is trading at 16 times its forward earnings at the moment, lower than peers’ average.

Analysts’ consensus gave PPL (PPL) stock a mean target price of $32.1, which implies an estimated upside of 4.3% for the next 12 months.

PPL (PPL) is scheduled to report its first-quarter earnings on May 2. According to analysts’ estimates, PPL will report an EPS of $0.72.

Analysts have given FirstEnergy (FE) a consensus target price of $44.2 compared to its current market price of $40.2.

Southern Company (SO) declared a quarterly dividend of $0.62 per share, which implies an annualized dividend of $2.48 per share.

In this article, we’ll discuss analysts’ views and price targets on relatively cheap utility stocks from a valuation perspective.

Utility stocks as a whole are trading at a forward PE multiple of ~18x, higher than their historical average.

Utilities have been an effective hedge against market uncertainty. They have also beaten broader markets in the longer term.

While broader markets continued to gain as the US-China trade talks resumed, utility stocks fell more than 1% on March 28.

PPL Corporation (PPL) is trading at a dividend yield of 5.1%, one of the highest among utilities.

According to analysts’ estimates, FirstEnergy (FE) stock has a target price of $42.33 compared to its current market price of $40.42.

FirstEnergy offers a dividend yield of 3.7%, which is higher than utilities’ average yield of 3.2%. FirstEnergy’s five-year average yield is ~4.3%.

FirstEnergy (FE) stock was one of the top performers among utilities last year. In the last 12 months, the stock has risen ~25%.