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.
Why Exelon’s recent quarterly earnings were positive
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’s UK Segment’s Earnings Improved in 2015
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.
XLU: How US Utility Stocks Fared Last Week
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%.
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.
Must-know: Lowest EBITDA margin in 10 years for AES
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.
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.
What PPL’s Latest Chart Indicators and Short Interest Suggest
PPL reported better-than-expected earnings in the second quarter. The company’s earnings grew 6% compared to the same period last year.
A Look at PPL’s Q3 2018 Earnings and Growth Prospects
PPL Corporation (PPL) is expected to report EPS of $0.56 for the third quarter.
NRG Energy’s Implied Volatility Is Rising
On April 28, 2017, NRG Energy (NRG) had the highest implied volatility among the stocks in the Utilities Select Sector SPDR ETF (XLU).
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.
PPL, SO, and D: Top-Yielding Utility Stocks
Currently, utilities offer a yield of 3.4%, which indicates a spread of almost 50 basis points to the ten-year Treasury yield.
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.
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.
Which Utility Stocks Have the Highest Implied Volatility?
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: Analysts’ Recommendations and Target Price
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.
PPL Offers an Attractive Dividend Yield
Pennsylvania-based PPL (PPL) stock is currently trading at a dividend yield of 5.4%.
Where PPL Corporation Stock Could Go from Here
PPL Corporation (PPL) stock fell below both its moving average levels in October 2017 and has been trading significantly weak since then.
Why SCANA Stock Offers Decent Upside Potential
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.
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.
Comparing FirstEnergy’s Returns with Its Peers
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.
Key Factors That Could Drive PPL’s 2Q17 Earnings
PPL Corporation (PPL) is expected to report earnings per share of $0.48 for 2Q17. In 2Q16, the utility earned $0.56 per share.
How PPL Stock Is Valued following Its 1Q18 Earnings
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.
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.
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%.
DUK, SO, and PPL: How Are Top US Utilities Valued Currently?
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 Funds Saw Outflows for Third Week in a Row
Investment-grade bond issuance fell to $26.275 billion last week as compared to $32.35 billion in the previous week.
What’s the Dividend Outlook for These Top-Yielding Utilities?
Earnings and dividend growth for PPL (PPL) for the next few years looks achievable considering its expected rate base growth.
Why Westmoreland Coal Company’s customer base is a positive thing
Another positive of Westmoreland Coal Company (WLB) is its customer base. The company supplies coal to utilities with strong balance sheets.
Utilities Are Trading at a Premium, but for How Long?
In 2016, the smart rally in midsize regulated utilities has bolstered their valuations. PPL Corporation seems to be overpriced when compared to peers.
S&P 500 Utilities Stocks with the Highest Potential Upside
According to Wall Street analysts’ estimates, PPL (PPL) offers the highest potential upside of nearly 22% in a year.
Utilities versus Broader Markets’ Total Returns
Utilities played out well last year amid broader markets’ volatility. They returned more than 6%, while the S&P 500 returned -6% last year.
How US Utility Stocks Performed Last Week
While Hurricane Harvey and Hurricane Irma left millions of Americans out of power, US utility stocks continued to climb higher last week.
Inside Southern Company’s ROE and Earnings by Segment
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: Leaders and Laggards Last Week
Utilities rose ~2% last week despite the strength in Treasury yields. The benchmark ten-year Treasury yield closed at a multiyear high.
Analyzing Utility Stocks with the Highest Implied Volatility
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).
Understanding Xcel Energy’s Current Valuation
US utility stocks have been rallying for the past several months, and the rally has made them relatively expensive.
Brexit’s Impact: European Utilities Nosedive, National Grid Gains
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.
PPL Stock: How It’s Valued Compared to Peers
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.
Why Investors Flocked to Utilities amid Broader Market Turmoil
The slow-and-steady utilities sector was the top performer yesterday when the broader markets fell 3%.
Analyzing PPL Corporation’s Return on Equity
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.
Millennium Management adds new position in Anixter International
For 1Q14, Anixter’s results beat on earnings, but missed on revenue.
A Look at Xcel Energy’s Valuation before Q2 2018 Earnings
Currently, Xcel Energy (XEL) stock is trading at a PE multiple of 20.0x compared to its five-year historical average of 18.0x.
Not All Utility Stocks Are Overpriced
Utility stocks seem overvalued. Utilities have reached record levels. They have been trading at inflated valuations for months.
Why the Divergence on the Rate Hike Timing in the US?
As a group, policymakers seem utterly confused regarding their reading of the economic situation, inflation, and the labor market.
Inside PPL Corporation’s Dividend Yield
PPL Corporation (PPL) raised its quarterly dividend in fiscal 1Q17 to $0.395 per share.
Why Analysts Are Expecting AES Earnings to Fall in 2Q16
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.
How Analysts View PPL Stock
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%.
How PPL’s Returns Fared Compared to Its Peers in 2018
PPL (PPL), the top-yielding stock among the S&P 500 Utilities, has underperformed its peers in terms of total returns in 2018.
What Are Analysts’ Price Targets for AES before Its 3Q Results?
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 Has a Premium Yield, Dull Dividend Growth
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.
Only 2 Power Utilities Gain during a Tough Week for the Sector
The power utilities sector remained under stress last week. The representative of the sector, the Utilities Select Sector SPDR (XLU), dropped by 4.1%.
What’s Expected for PPL’s Dividends Going into 2019
PPL (PPL) expects fair annual earnings growth for the next few years, of ~5%–6%, which could facilitate dividend growth.
How PPL’s Current Valuation Compares to Its Peers
PPL Corporation (PPL) stock is trading at a PE multiple of 13x compared to its five-year historical average of 14x.
Must-know: The EPA helped a coal producing region
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.
These Top Utilities Received Target Price Raises Last Week
Almost all utility stocks currently offer unattractive upside potentials due to their recent rallies.
PPL’s Dividend Yield Reaches Record High
PPL Corporation (PPL) is currently trading at a dividend yield of 5.8%, which is much higher than utilities’ average yield of 3.4%.
PPL: Analysts’ Recommendations and Target Price
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.
A Look at PPL’s Price Targets ahead of Its 4Q16 Earnings
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.
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 […]
American Electric Power Stock’s Current Valuation
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.
A Look at Institutional Activity in PPL during Q2 2018
Fidelity Management added 19.3 million shares of PPL during the quarter and took its total holdings to 6.3%.
Is AES’s Dividend Yield Normalizing?
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.
How’s PPL Stock Valued before Its 1Q18 Earnings?
Currently, PPL is trading at a PE (price-to-earnings) multiple of 13.5x—compared to its five-year historical average valuation near 14x.
Richard Bernstein Advisors Is Positioned for the Bull Market
In his June 2016 “Insights” newsletter, Richard Bernstein said that his firm positioned itself for an earnings-driven bull market.
How Do Analysts View Xcel Energy?
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.
Why the Midstream Business Seems Sustainable to Eversource Energy
Integrated utility holding company Eversource Energy (ES) is planning to sell 1,200 megawatts of its generation business in the next two years.
How PPL’s Dividend Profile Looks Compared to Its Peers
PPL Corporation (PPL) is one of the top-yielding utilities in the S&P 500 Utilities Index.
Analysts’ Views on and Targets for PPL Corporation
According to analysts’ consensus estimate, PPL Corporation (PPL) stock offers an attractive potential upside of 13% over the next year.
All the Component Sectors of SPY Ended in Red Territory
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.
Where Utility Stocks Could Go amid Valuation Concerns
Utility stocks have been rallying for the last two years amid broader market volatility. The rally in these stocks steepened last year.
Top Dividend Stocks from Utilities to Combat Recession
Recession fears have been hovering over the market throughout this year. However, defensives such as utilities are trading at record highs.
How Utility Stocks Could Fare in 2020 with No Rate Cuts
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.
Two Top-Yielding Utility Stocks for Uncertain Markets
Generally, investors prefer utility stocks due to their stable dividend-paying capabilities. Currently, they offer an average dividend yield of 3%.
Wholesale electricity prices mirrors natural gas price
With the exception of Texas, wholesale prices in all other US regions were low.
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.
Exelon’s steady dividend payouts
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.
US power companies: Comparing valuation multiples
Forward multiples are a useful metric for gauging relative valuation. A higher multiple usually indicates a richer valuation for a company.
Why Exelon’s utility business contributed less in 3Q14
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%.
Low gas prices can make independent power producers uncomfortable
Natural gas is procured by power producers on short-term and spot contracts. Changes in gas prices affect unregulated power companies immediately.
Two Top Utilities that Beat Southern Company’s Yield
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%.
Utilities’ Ups and Downs Last Week
Utility stocks continued to underperform broader markets last week.
Not All Utility Stocks Look Expensive Right Now
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 Continues to Offer a Premium Dividend Yield
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%.
Which Utility Stocks Have the Highest Dividend Yields Right Now?
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%.
How Analysts Rate SO, PPL, and D
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.
DUK, SO, and PPL: Analyzing Top-Yielding Utility Stocks
Utility stocks (XLU) are currently trading at a dividend yield of 3.1%, higher than broader markets.
EXC, AEE, and PPL: Analyzing Their Current Valuations
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.
PPL Stock Looks Attractive before Its Q1 Earnings
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: Analysts’ Q1 Earnings Estimates
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.
How Analysts View FirstEnergy Stock ahead of Its Q1 Results
Analysts have given FirstEnergy (FE) a consensus target price of $44.2 compared to its current market price of $40.2.
Southern Company: Analyzing Its Dividends
Southern Company (SO) declared a quarterly dividend of $0.62 per share, which implies an annualized dividend of $2.48 per share.
PPL, FE, and EIX: Analysts’ Views and Price Targets
In this article, we’ll discuss analysts’ views and price targets on relatively cheap utility stocks from a valuation perspective.
Not All Utility Stocks Are Trading at a Premium
Utility stocks as a whole are trading at a forward PE multiple of ~18x, higher than their historical average.
Utilities Beat Broader Markets in the Long Term
Utilities have been an effective hedge against market uncertainty. They have also beaten broader markets in the longer term.
Have Utility Stocks Started to Look Exhausted?
While broader markets continued to gain as the US-China trade talks resumed, utility stocks fell more than 1% on March 28.
How PPL Stock Is Currently Valued Compared to Its Peers
PPL Corporation (PPL) is trading at a dividend yield of 5.1%, one of the highest among utilities.
FirstEnergy, Xcel Energy, and PPL: Analysts’ Recommendations
According to analysts’ estimates, FirstEnergy (FE) stock has a target price of $42.33 compared to its current market price of $40.42.
Analyzing FirstEnergy’s Dividend Profile
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’s Valuation Compared to Its Peers
FirstEnergy (FE) stock was one of the top performers among utilities last year. In the last 12 months, the stock has risen ~25%.