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Here's Why You Should Add Entergy (ETR) to Your Portfolio

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Estimates for Entergy Corporation (ETR - Free Report) have been revised upward in the past 90 days, which reflects analysts’ optimism in the stock. The Zacks Consensus Estimate for 2019 earnings has inched up 0.4%.

Shares of Entergy have rallied 5.4% in the past 12 months, outperforming the industry’s gain of 1.2%.


Let’s focus on the factors that make Entergy an attractive pick.

Zacks Rank & Surprise History

The stock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Entergy pulled off an average positive earnings surprise of 36.20% in the last four quarters.

Growth Projections

The Zacks Consensus Estimate for 2019 earnings per share is pegged at $5.66. Its long-term earnings growth rate is at 7%. The Zacks Consensus Estimate for 2019 revenues is pegged at $11.12 billion up 3.16% year over year.

 VGM Score

Entergy has an impressive VGM Score of B. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors. Back tested results show that stocks with a favorable VGM Score of A or B coupled with a bullish Zacks Rank are best investment options.

Disciplined Investment & Stable Cash flow

Investments in growth projects are expected to drive growth. The company stated that it plans to invest $11.22 billion in the 2018–2020 time frame. The amount includes $4.25 billion for generation, $2.84 billion for distribution and $2.59 billion for transmission. Moreover, Entergy maintains a stable liquidity position backed by a strong cash generation capacity that enables it to make notable investment plans. As of Sep 30, 2018, the company had cash and cash equivalents of $988 million.

Dividend Yield

Entergy is paying dividend since 1972 and is constantly rewarding shareholders through steady dividend hike. Currently, dividend yield of the company is at 4.29%, higher than the industry's 3.23% and Zacks S&P 500’s 2.12%.

Stocks to Consider

A few other top-ranked stocks from the same industry are Ameren Corporation (AEE - Free Report) , Dominion Energy Inc (D - Free Report) and Xcel Energy Inc (XEL - Free Report) . Ameren sports a Zacks Rank #1, while Dominion and Xcel Energy hold a Zacks Rank #2.

Long-term earnings growth of Ameren, Dominion and FirstEnergy is pegged at 6.80%, 6.60% and 5.90%, respectively.

The Zacks Consensus Estimate for 2019 earnings of Ameren, Dominion and FirstEnergy inched up 0.3%, 0.5% and 0.8% in the past 90 days, respectively.

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