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FirstEnergy to Make $2.5B Equity Investment to Lower Debts
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FirstEnergy Corporation (FE - Free Report) announced plans of transformational investment, which will help to strengthen its balance sheet by lowering existing debts. The remaining equity proceeds will also be utilized to fund the pension fund and for general corporate purposes.
FirstEnergy aims to issue equity worth $2.5 billion, which includes $1.62 billion in mandatory convertible preferred equity and $850 million of common equity. The mandatory convertible equity is priced at $27.42 per share and the common equity is priced at $28.22 per share.
The debt to capital of the company is high compared to the industry and the S&P 500 average. The new equity issue will bring down its debt to capital ratio, which currently is 76.70%.
FirstEnergy’s Plans
FirstEnergy’s modernization drive will boost the company’s service reliability and lead to customer retention. The company has upgraded or replaced existing power lines, incorporated new, smart technology into the grid and upgraded dozens of substations with new equipment and enhanced security features. All these initiatives have helped it serve its customers more efficiently. Under this initiative, the company invested nearly $1 billion in 2017 and has plans to invest in the range of $4.2 billion to $5.8 billion over the 2017-2021 period.
FirstEnergy plans to exit its competitive generation by mid-2018. This will help it become fully regulated and earn assured return from invested capital and remove volatility of earnings relating to merchant operations.
Utilities Focus on Going Green
Per a recent release by the U.S. Energy Information Administration ("EIA"), nearly half of the 25 gigawatt utility-scale electric generating capacity added to the grid in 2017 came from renewable sources.
EIA forecasts generation of electricity from renewable sources (excluding hydropower) will increase by 2.9% year over year to 1.089 billion Kwh per day in 2018 and by 8.5% year over year to 1.182 billion Kwh per day in 2019.
FirstEnergy has taken initiatives to lower its carbon footprint and focuses on generating power from clean sources. Notably, utilities like NextEra Energy (NEE - Free Report) , Dominion Energy (D - Free Report) and Duke Energy Corporation (DUK - Free Report) are also focused to enhancing electrify production from renewable sources.
Price Movement
Thanks to the investment decision, FirstEnergy’s shares closed at $32.45 on Jan 22, reflecting a gain of nearly 10.4% from the previous day’s close of $29.40 per share.
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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FirstEnergy to Make $2.5B Equity Investment to Lower Debts
FirstEnergy Corporation (FE - Free Report) announced plans of transformational investment, which will help to strengthen its balance sheet by lowering existing debts. The remaining equity proceeds will also be utilized to fund the pension fund and for general corporate purposes.
FirstEnergy aims to issue equity worth $2.5 billion, which includes $1.62 billion in mandatory convertible preferred equity and $850 million of common equity. The mandatory convertible equity is priced at $27.42 per share and the common equity is priced at $28.22 per share.
The debt to capital of the company is high compared to the industry and the S&P 500 average. The new equity issue will bring down its debt to capital ratio, which currently is 76.70%.
FirstEnergy’s Plans
FirstEnergy’s modernization drive will boost the company’s service reliability and lead to customer retention. The company has upgraded or replaced existing power lines, incorporated new, smart technology into the grid and upgraded dozens of substations with new equipment and enhanced security features. All these initiatives have helped it serve its customers more efficiently. Under this initiative, the company invested nearly $1 billion in 2017 and has plans to invest in the range of $4.2 billion to $5.8 billion over the 2017-2021 period.
FirstEnergy plans to exit its competitive generation by mid-2018. This will help it become fully regulated and earn assured return from invested capital and remove volatility of earnings relating to merchant operations.
Utilities Focus on Going Green
Per a recent release by the U.S. Energy Information Administration ("EIA"), nearly half of the 25 gigawatt utility-scale electric generating capacity added to the grid in 2017 came from renewable sources.
EIA forecasts generation of electricity from renewable sources (excluding hydropower) will increase by 2.9% year over year to 1.089 billion Kwh per day in 2018 and by 8.5% year over year to 1.182 billion Kwh per day in 2019.
FirstEnergy has taken initiatives to lower its carbon footprint and focuses on generating power from clean sources. Notably, utilities like NextEra Energy (NEE - Free Report) , Dominion Energy (D - Free Report) and Duke Energy Corporation (DUK - Free Report) are also focused to enhancing electrify production from renewable sources.
Price Movement
Thanks to the investment decision, FirstEnergy’s shares closed at $32.45 on Jan 22, reflecting a gain of nearly 10.4% from the previous day’s close of $29.40 per share.
FirstEnergy Corporation Price
FirstEnergy Corporation Price | FirstEnergy Corporation Quote
Zacks Rank
FirstEnergy has a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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