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ONE Gas (OGS) Ups 2020 EPS View, To Invest $3B in Five Years
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ONE Gas, Inc. (OGS - Free Report) updated its 2020 financial guidance as well as issued the 2021 outlook. The company expects its 2021 net income in the range of $198-$210 million and earnings per share (EPS) in $3.68-$3.92. The Zacks Consensus Estimate of EPS is pegged at $3.83, above the utility’s midpoint of $3.80.
This expectation reflects the benefit of new rates and customer growth, partly offset by elevated operating expenses including depreciation expense from capital investments. It is based on the assumption of normal weather but does not assume that the company will record any regulatory assets for COVID-19 during 2021. Also, it raised its 2020 earnings guidance to $3.66-$3.70 per share from $3.44-$3.68. The Zacks Consensus Estimate for EPS is pegged at $3.61, below the utility’s midpoint of $3.68.
Capital expenditures including asset removal costs are expected to be nearly $540 million in 2021. Of this figure, nearly 70% will be aimed at system integrity while the balance majorly reserved for customer growth. The expected 2021 average rate base is $4.23 billion, in line with the utility ratemaking in each jurisdiction.
Long-Term Outlook
Between 2020 and 2025, the annual dividend is expected to grow at a rate of 6-8% on average. Also, the targeted dividend payout ratio is expected to be 55-65% of the company’s net income, subject to its board of directors' approval. In the same time frame, net income and earnings per share are expected to annually increase 6-8% and 5-7%, respectively, on average. However, the nature and timing of the regulatory filings like full-rate cases as well as equity issuances will impact the growth rate every year.
Capital expenditures including asset removal costs are expected to be $3 billion for the 2021-2025 time period or in the range of $540-$640 million per year. This will lead to rate base growth of 7-8% annually, on average.
Shares of this utility have lost 24.9% in the past year compared with the industry’s decline of 27.5%.
Stocks to Consider
A few better-ranked stocks from the same space are ONEOK, Inc. (OKE - Free Report) , Centrica PLC (CPYYY - Free Report) and MDU Resources Group, Inc. (MDU - Free Report) . While ONEOK flaunts a Zacks Rank#1, others carry a Zacks Rank#2 (Buy) at present.
The Zacks Consensus Estimate for ONEOK’s 2021 earnings has moved 9.4% north in the past 60 days. The company has a long-term (three-five years) earnings growth rate of 4.62%.
Centrica PLC has a long-term earnings growth rate of 6.83%. The Zacks Consensus Estimate for 2021 earnings has moved 4.8% north in the past 60 days.
The Zacks Consensus Estimate for MDU Resources’ 2021 earnings has moved 2.6% north in the past 60 days. The company has a long-term earnings growth rate of 5%.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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ONE Gas (OGS) Ups 2020 EPS View, To Invest $3B in Five Years
ONE Gas, Inc. (OGS - Free Report) updated its 2020 financial guidance as well as issued the 2021 outlook. The company expects its 2021 net income in the range of $198-$210 million and earnings per share (EPS) in $3.68-$3.92. The Zacks Consensus Estimate of EPS is pegged at $3.83, above the utility’s midpoint of $3.80.
This expectation reflects the benefit of new rates and customer growth, partly offset by elevated operating expenses including depreciation expense from capital investments. It is based on the assumption of normal weather but does not assume that the company will record any regulatory assets for COVID-19 during 2021. Also, it raised its 2020 earnings guidance to $3.66-$3.70 per share from $3.44-$3.68. The Zacks Consensus Estimate for EPS is pegged at $3.61, below the utility’s midpoint of $3.68.
Capital expenditures including asset removal costs are expected to be nearly $540 million in 2021. Of this figure, nearly 70% will be aimed at system integrity while the balance majorly reserved for customer growth. The expected 2021 average rate base is $4.23 billion, in line with the utility ratemaking in each jurisdiction.
Long-Term Outlook
Between 2020 and 2025, the annual dividend is expected to grow at a rate of 6-8% on average. Also, the targeted dividend payout ratio is expected to be 55-65% of the company’s net income, subject to its board of directors' approval. In the same time frame, net income and earnings per share are expected to annually increase 6-8% and 5-7%, respectively, on average. However, the nature and timing of the regulatory filings like full-rate cases as well as equity issuances will impact the growth rate every year.
Capital expenditures including asset removal costs are expected to be $3 billion for the 2021-2025 time period or in the range of $540-$640 million per year. This will lead to rate base growth of 7-8% annually, on average.
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.
Shares of this utility have lost 24.9% in the past year compared with the industry’s decline of 27.5%.
Stocks to Consider
A few better-ranked stocks from the same space are ONEOK, Inc. (OKE - Free Report) , Centrica PLC (CPYYY - Free Report) and MDU Resources Group, Inc. (MDU - Free Report) . While ONEOK flaunts a Zacks Rank#1, others carry a Zacks Rank#2 (Buy) at present.
The Zacks Consensus Estimate for ONEOK’s 2021 earnings has moved 9.4% north in the past 60 days. The company has a long-term (three-five years) earnings growth rate of 4.62%.
Centrica PLC has a long-term earnings growth rate of 6.83%. The Zacks Consensus Estimate for 2021 earnings has moved 4.8% north in the past 60 days.
The Zacks Consensus Estimate for MDU Resources’ 2021 earnings has moved 2.6% north in the past 60 days. The company has a long-term earnings growth rate of 5%.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>