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4 Reasons to Add Pinnacle West (PNW) to Your Portfolio Now

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Earnings estimates for Pinnacle West Capital Corporation (PNW - Free Report) have been revised upward over the past 30 days, reflecting analysts’ optimism surrounding the stock. The Zacks Consensus Estimate for 2019 and 2020 earnings has moved up 0.6% and 1.2%, respectively, during the said period.

Pinnacle West, together with its subsidiaries, provides electricity services (wholesale or retail) in the state of Arizona.
 
Let’s focus on the factors that make Pinnacle West a good investment option at the moment.

Price Movement

In the past six months, Pinnacle West’s shares have gained 16.9% compared with its industry’s growth of 8.8%.



Earnings Surprise Trend & Estimate Revision

Pinnacle West beat estimates in the last three reported quarters, with the average positive surprise being 13.29%. Its earnings estimate for 2019 and 2020 indicate 0.6% and 1.2% increase on a year-over-year basis to $4.85 and $5.05 per share, respectively.

Return on Equity (ROE)

Pinnacle West’s ROE of 9.67% compared with the industry average of 9.18% indicates efficiency in utilizing its shareholders’ funds.

Long-Term Growth and Dividend Yield

The company’s long-term (3-5 years) earnings growth is pegged at 4.85%, courtesy of favorable economic conditions in its service territories, in turn driving growth in demand and customer volumes.

The capital expenditure plan of the company will help in strengthening its operations and serve the expanding customer base more efficiently.
 
The current dividend yield of the company is 3.17% compared with its industry’s 2.92%.

Zacks Rank & Other Key Picks

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

Other top-ranked stocks from the same industry include NextEra Energy, Inc. (NEE - Free Report) , The Southern Company (SO - Free Report) and Xcel Energy Inc. (XEL - Free Report) , each holding a Zacks Rank of 2.

NextEra Energy pulled off an average positive earnings surprise of 2.5% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has been revised 0.3% upward to $8.40 over the past 60 days.

Southern Company reported average positive earnings surprise of 7.85% in the trailing four quarters. The Zacks Consensus Estimate for 2019 earnings has moved 0.7% north to $3.03 per share over the past 60 days.

Xcel Energy surpassed estimates in three out of the trailing four quarters, resulting in average positive surprise of 5.09%. The Zacks Consensus Estimate for 2019 earnings has moved 0.03% north to $2.62 over the past 60 days.

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