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Zacks Equity Research

Strong Buy on Laclede Group

SWX ATO

Trades from $3

On Oct 17, 2013, Zacks Investment Research upgraded natural gas utility operator The Laclede Group Inc. to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

The company delivered earnings surprises in three out of the last four quarters with an average beat of 48.81%. The long-term expected earnings growth of Laclede Group is set at an encouraging 4.14%.

Laclede Group’s acquisition of Missouri Gas Energy assets in early Sep 2013 will expand the company’s customer base. This purchase will elevate Laclede Group’s position as a leading gas service provider in the state of Missouri.

The upcoming winter is expected to drive electricity sales of the company as the Energy Information Administration predicts natural gas consumption on an average to increase to 70.0 billion cubic feet per day (Bcf/d) in 2013 compared with 69.7 Bcf/d in 2012.

Gas utilities like Laclede Group will stay a step ahead in the energy race as the Environmental Protection Agency’s new proposal for carbon emission reduction has put major coal-fired operators’ future plans on a back burner.

Furthermore, Laclede Group’s registered operating cash flow growth of 30.3% to $167.0 million in the nine months ended Jun 30, 2013 compared with $128.2 million in the nine months ended Jun 30, 2012 will allow the company to effectively finance its growth-centric projects.

Other Stocks to Consider

Other natural gas utility companies looking attractive at the moment are Zacks Ranked #2 (Buy) Atmos Energy Corp. (ATO - Free Report) , Piedmont Natural Gas Company, Inc. and Southwest Gas Corp. (SWX - Free Report) .


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