Pampa Energia S.A. ( PAM Quick Quote PAM - Free Report) is benefiting from its focus on delivering a safe, clean and reliable energy source to customers. Also, the utility’s strong fundamentals remain a tailwind. Let’s focus on the factors that make this currently Zacks Rank #2 (Buy) stock a strong investment pick. You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here Northbound Estimate Revision
The Zacks Consensus Estimate for 2020 and 2021 earnings has moved 45.4% and 7% north, respectively, in the past 60 days.
Stellar Surprise History & Long-Term Earnings Growth
Pampa Energia’s trailing four-quarter earnings surprise is 153.99%, on average.
Its long-term (three to five years) earnings growth rate is currently projected at 6.46%. Capital Plans Bode Well
The company has direct and indirect interests in Transportadora de Gas del Sur S.A. (TGS), Argentina’s major gas transportation company. Pampa Energia’s five-year investment plan to be executed by TGS is already approved. The company requires significant investments in the operation and maintenance of its pipeline system to provide a quality-driven, safe and reliable service. The plan valued at $6,786 million, commenced on Apr 1, 2017 and will be on track through Mar 31, 2022.
Strong Financial Position
Pampa Energia’s long-term debt-to-capital is 39.86% compared with the industry’s average of 49.71%. Its times interest earned (TIE) ratio declined to 1.85 at the end of second-quarter 2020. However, a greater-than-one TIE ratio reflects the company’s ability to meet its debt obligations in the near future without any difficulty.
Stock Surpasses Industry
The stock has gained 4.7%, outperforming the
industry’s rise of 4.4% in the quarter-to-date period. Solid Cash Flow From Operation
The company has been generating consistent cash flow from operation since 2017. Net cash flow generated by operating activities surged 31.5% year over year to $802 million in 2019.
Other Stocks to Consider
A few other top-ranked utilities are Energias de Portugal (
EDPFY Quick Quote EDPFY - Free Report) , Portland General Electric Company ( POR Quick Quote POR - Free Report) and Essential Utilities Inc. ( WTRG Quick Quote WTRG - Free Report) , all carrying the same Zacks Rank as Pampa Energia at present. Energias de Portugal has a long-term earnings growth rate of 5.66%. The Zacks Consensus Estimate for 2020 earnings has moved 10.8% north in the past 60 days. Portland General Electric Company delivered an earnings surprise of 7.74%, on average, in the last four quarters. The company has a long-term earnings growth rate of 5.14%. Essential Utilities has a long-term earnings growth rate of 6.01%. The company delivered an earnings surprise of 9.67%, on average, in the trailing four quarters. Just Released: Zacks’ 7 Best Stocks for Today
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