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Reasons to Add IDACORP (IDA) to Your Portfolio Right Now

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IDACORP Inc.’s (IDA - Free Report) ongoing capital Investments, customer growth, cost management and focus on producing more electricity from clean sources will continue to boost the company’s performance.

Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Growth Projection

The Zacks Consensus Estimate for IDA’s 2021 earnings has moved up 0.4% in the past 60 days to $4.87 per share. The 2021 estimates imply year-over-year growth of 3.8%.

The Zacks Consensus Estimate for IDA’s 2022 earnings has moved up 1% in the past 60 days to $5.00 per share. The 2021 estimates imply year-over-year growth of 2.7%.

Stable Investments

IDACORP projects a capital expenditure of $2 billion for the 2021-2025 time period. Owing to systematic investments in strengthening the generation portfolio, Idaho Power Hydroelectric Generation will be able to cater to the rising demand from the expanding customer base. The aim of the systematic investment is to provide 100% clean energy to customers by 2045. At 2020-end, out of the energy mix, nearly 60% comprised clean energy sources.

Customer Additions

IDACORP’s regulated electric operations in Idaho generate a relatively stable and growing income stream. In 2020, as Idaho Power’s customer base improved 2.7%, operating income got a boost by $14 million from 2019 levels.

The trend continued for the first nine months of 2021, with a 2.9% year-over-year increase in customer volumes, resulting in a $12.6-million increase in operating income. Higher residential demand from cooling and irrigation customers boosted its performance.

Surprise History & Long-Term Earnings Growth

IDACORP has an impressive earnings surprise history. Its trailing four-quarter earnings surprise is 5.2%, on average.

IDACORP’s long-term (three to five years) earnings growth is currently pegged at 4.4%.

Dividend

IDACORP has a dividend yield of 2.75%, higher than the Zacks S&P 500 composite’s average of 1.32%. IDACORP is rewarding shareholders through dividend increases. In September 2021, the board of directors approved a 5.6% increase in the quarterly dividend, which marks a 150% increase in annual dividend since 2011.

During the first nine months of 2021, it paid nearly $108.2 million as a dividend to shareholders compared with $102 million in the prior-year period. The company’s current dividend payout target is in the range of 60-70%. IDA expects to annually increase the dividend by 5% or more, subject to approval from the board of directors.

Price Performance

In the past six months, the stock has gained 9.7% compared with the industry’s rally of 5.2%.

Zacks Investment ResearchImage Source: Zacks Investment Research

Other Stocks to Consider

Other top-ranked stocks in the Zacks Utilities sector include Duke Energy Corporation (DUK - Free Report) , California Water Service Group (CWT - Free Report) and Atmos Energy (ATO - Free Report) , each holding a Zacks Rank #2.

Duke Energy, California Water Service, and Atmos Energy delivered an earnings surprise of 2.3%, 10.8%, and 6.5%, respectively, on average, in the last four quarters.

The Zacks Consensus Estimate for 2022 earnings per share of Duke Energy and California Water Service has moved up 0.2% and 3.2%, respectively, in the past 60 days. Fiscal 2022 estimates for Atmos Energy have moved up 0.7%, respectively, in the past 60 days.

Year to date, shares of Duke Energy, California Water Service, and Atmos Energy have returned 12.5%, 28.4%, and 7.7%, respectively, compared with the sector’s 6.6% growth.