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Xcel Energy Gains From Investments, Focuses on Clean Energy
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Xcel Energy Inc.’s (XEL - Free Report) investments in enhancing its clean energy generation capability, ongoing additions to its existing natural gas and electric customers, and a marginal increase in demand with the economy gradually opening up after the pandemic are key catalysts. Also, continuous investments in infrastructure-related projects will benefit the company in the future.
The Zacks Consensus Estimate for 2020 earnings is pegged at $2.77 per share, indicating growth of 4.92% from the year-ago reported figure. Additionally, long-term (three-five years) earnings growth rate for the company stands at 5.93%.
What’s Driving the Stock?
Xcel Energy continues to invest in its utility assets to provide reliable services to its customers and effectively meet rising electricity demand. These investments are made in transmission, distribution, electric generation and renewable projects. Courtesy of proper management of operations, the company expects its business and maintenance expenses to decline 4-5% in 2020 to offset the negative impacts of COVID-19.
It is also focusing on transition to clean energy. Notably, in 2019, NSP-Minnesota filed its Minnesota resource plan, which runs through 2034. Per this plan, Xcel Energy will achieve an 80% carbon reduction by 2030 and 100% carbon-free electricity by 2050.
Moreover, the recent divestiture and equity issue increased the company’s liquidity level to $4.5 billion. Such strong cash position will be sufficient to meet its current obligations. The company’s strong cash flow generation capacity will enable it to raise its dividend at regular intervals.
Woes
However, Xcel Energy’s natural gas transmission and distribution operations are exposed to several risks including leaks and mechanical setbacks impacting normal operations, thereby affecting its financials. Also, the company’s business activities are susceptible to cyber security risks, which might induce a loss of valuable data.
In the past three months, shares of the company have gained 17.6%, outperforming the industry’s 1.1% rise.
Stocks to Consider
A few better-ranked electric utilities are Portland General Electric Company (POR - Free Report) , Alliant Energy Corporation (LNT - Free Report) and Huaneng Power International, Inc. , all carrying a Zacks Rank#2 (Buy), at present.
Portland General Electric Company delivered an earnings surprise of 7.74%, on average, in the last four quarters. The company has a long-term (three-five years) earnings growth rate of 5.14%.
Alliant Energy has a long-term earnings growth rate of 5.54%. The Zacks Consensus Estimate for 2020 earnings has been revised 0.8% upward in the past 60 days.
Huaneng Power International has a long-term earnings growth rate of 13.14%. The Zacks Consensus Estimate for current-year earnings has moved 24.4% north in the past 60 days.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Xcel Energy Gains From Investments, Focuses on Clean Energy
Xcel Energy Inc.’s (XEL - Free Report) investments in enhancing its clean energy generation capability, ongoing additions to its existing natural gas and electric customers, and a marginal increase in demand with the economy gradually opening up after the pandemic are key catalysts. Also, continuous investments in infrastructure-related projects will benefit the company in the future.
The Zacks Consensus Estimate for 2020 earnings is pegged at $2.77 per share, indicating growth of 4.92% from the year-ago reported figure. Additionally, long-term (three-five years) earnings growth rate for the company stands at 5.93%.
What’s Driving the Stock?
Xcel Energy continues to invest in its utility assets to provide reliable services to its customers and effectively meet rising electricity demand. These investments are made in transmission, distribution, electric generation and renewable projects. Courtesy of proper management of operations, the company expects its business and maintenance expenses to decline 4-5% in 2020 to offset the negative impacts of COVID-19.
It is also focusing on transition to clean energy. Notably, in 2019, NSP-Minnesota filed its Minnesota resource plan, which runs through 2034. Per this plan, Xcel Energy will achieve an 80% carbon reduction by 2030 and 100% carbon-free electricity by 2050.
Moreover, the recent divestiture and equity issue increased the company’s liquidity level to $4.5 billion. Such strong cash position will be sufficient to meet its current obligations. The company’s strong cash flow generation capacity will enable it to raise its dividend at regular intervals.
Woes
However, Xcel Energy’s natural gas transmission and distribution operations are exposed to several risks including leaks and mechanical setbacks impacting normal operations, thereby affecting its financials. Also, the company’s business activities are susceptible to cyber security risks, which might induce a loss of valuable data.
Zacks Rank & Price Performance
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past three months, shares of the company have gained 17.6%, outperforming the industry’s 1.1% rise.
Stocks to Consider
A few better-ranked electric utilities are Portland General Electric Company (POR - Free Report) , Alliant Energy Corporation (LNT - Free Report) and Huaneng Power International, Inc. , all carrying a Zacks Rank#2 (Buy), at present.
Portland General Electric Company delivered an earnings surprise of 7.74%, on average, in the last four quarters. The company has a long-term (three-five years) earnings growth rate of 5.14%.
Alliant Energy has a long-term earnings growth rate of 5.54%. The Zacks Consensus Estimate for 2020 earnings has been revised 0.8% upward in the past 60 days.
Huaneng Power International has a long-term earnings growth rate of 13.14%. The Zacks Consensus Estimate for current-year earnings has moved 24.4% north in the past 60 days.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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