We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Xcel Energy's Steady Investments in Utility Assets Bode Well
Read MoreHide Full Article
Xcel Energy Inc.’s (XEL - Free Report) disciplined investments in infrastructure projects, focus on renewable expansion and higher demand driven by improvement in economic condition will act as growth catalysts.
The Zacks Consensus Estimate for 2020 earnings is pegged at $2.79 per share, which reflects year-over-year growth of 5.68%. Additionally, long-term earnings growth of the company is pegged at 5.70%.
In the past 12 months, shares of the company have rallied 30.6% compared with the industry’s growth of 22.5%.
What’s Driving the Stock?
Xcel Energy continues to invest substantially in its utility assets to provide reliable services to customers and effectively meet rising electricity demand. The capital investment is directed toward transmission, distribution, electric generation and renewable projects. It expects to deliver 2020 earnings in the range of $2.73-$2.83 per share, which is in line with its long-term earnings growth objective in the range of 5-7%.
Xcel Energy targets a dividend payout ratio of 60-70% and aims to increase shareholders’ value by increasing dividend rate by 5-7% annually. In February 2020, the company increased quarterly dividend by 6.6%. Strong cash flow generation capacity of the company enables it to pay dividend and increase the same at regular intervals
Xcel Energy is focusing on clean energy transition. In 2019, the Minnesota Commission approved the purchase of the Longroad wind assets. With the successful completion of wind projects named Foxtail, Lake Benton and Hale — which have 700 megawatt (MW) capacity — the company continued to achieve important milestones in nation-leading wind expansion program. Moreover, the company has almost 2,000 MWs of wind projects under construction, which are expected to be completed in 2020.
However, high debt levels, risk related to cyber security breaches and strict environmental legislations are concerns. In 2019, the company’s total interest charges and financing costs rose 13.5% from 2018.
Few better-ranked stocks from the same sector are Atmos Energy Corp. (ATO - Free Report) , Sempra Energy (SRE - Free Report) and Pacific Gas & Electric Co. (PCG - Free Report) . All the three stocks hold a Zacks Rank #2 (Buy).
Long-term earnings growth of Atmos Energy, Sempra Energy and Pacific Gas & Electric is pegged at 7.20%, 8.10% and 2.50%, respectively.
Atmos Energy, Sempra Energy and Pacific Gas & Electric have trailing four-quarter positive earnings surprise of 1.91%, 3.21% and 17.53%, on average, respectively.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
Xcel Energy's Steady Investments in Utility Assets Bode Well
Xcel Energy Inc.’s (XEL - Free Report) disciplined investments in infrastructure projects, focus on renewable expansion and higher demand driven by improvement in economic condition will act as growth catalysts.
The Zacks Consensus Estimate for 2020 earnings is pegged at $2.79 per share, which reflects year-over-year growth of 5.68%. Additionally, long-term earnings growth of the company is pegged at 5.70%.
In the past 12 months, shares of the company have rallied 30.6% compared with the industry’s growth of 22.5%.
What’s Driving the Stock?
Xcel Energy continues to invest substantially in its utility assets to provide reliable services to customers and effectively meet rising electricity demand. The capital investment is directed toward transmission, distribution, electric generation and renewable projects. It expects to deliver 2020 earnings in the range of $2.73-$2.83 per share, which is in line with its long-term earnings growth objective in the range of 5-7%.
Xcel Energy targets a dividend payout ratio of 60-70% and aims to increase shareholders’ value by increasing dividend rate by 5-7% annually. In February 2020, the company increased quarterly dividend by 6.6%. Strong cash flow generation capacity of the company enables it to pay dividend and increase the same at regular intervals
Xcel Energy is focusing on clean energy transition. In 2019, the Minnesota Commission approved the purchase of the Longroad wind assets. With the successful completion of wind projects named Foxtail, Lake Benton and Hale — which have 700 megawatt (MW) capacity — the company continued to achieve important milestones in nation-leading wind expansion program. Moreover, the company has almost 2,000 MWs of wind projects under construction, which are expected to be completed in 2020.
However, high debt levels, risk related to cyber security breaches and strict environmental legislations are concerns. In 2019, the company’s total interest charges and financing costs rose 13.5% from 2018.
Zacks Rank
The stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
Few better-ranked stocks from the same sector are Atmos Energy Corp. (ATO - Free Report) , Sempra Energy (SRE - Free Report) and Pacific Gas & Electric Co. (PCG - Free Report) . All the three stocks hold a Zacks Rank #2 (Buy).
Long-term earnings growth of Atmos Energy, Sempra Energy and Pacific Gas & Electric is pegged at 7.20%, 8.10% and 2.50%, respectively.
Atmos Energy, Sempra Energy and Pacific Gas & Electric have trailing four-quarter positive earnings surprise of 1.91%, 3.21% and 17.53%, on average, respectively.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>