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Reasons to Invest in Portland General Electric (POR) Now

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Portland General Electric Company (POR - Free Report) is benefiting from delivering safe, clean and reliable energy to its customers. Also, steady capital investments are strengthening its existing infrastructure.

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

Growth Projections

The Zacks Consensus Estimate for 2021 and 2022 earnings per share is pegged at $2.75 and $2.83, respectively. The bottom-line estimates indicate a respective increase of 59.88% and 2.91% from the corresponding year-ago figures.

The Zacks Consensus Estimate for 2021 and 2022 revenues is pegged at $2.36 billion and $2.54 billion each. The top-line estimates imply an increase of 9.91% and 7.75%, respectively, from the corresponding year-ago figures.

Surprise History & Long-Term Earnings Growth

Portland General Electric’s trailing four-quarter earnings surprise is 9.54%, on average.

Its long-term (three to five years) earnings growth rate is currently projected at 8.64%.

Regular Investments & Emission Reduction

Portland General Electric makes continuous investments in enhancing and maintaining the existing infrastructure for providing reliable services to its customer base. It aimed to spend $700 million in 2021. These planned expenditures were directed toward upgrades and replacement of weathered generation, transmission and distribution infrastructure. Moreover, Portland General Electric’s objective is to build a smarter and resilient grid, which will assist it in providing sustainable and trustworthy services to its customers.

POR via its regular investment is planning to lower greenhouse gas emissions. It targets to achieve 80% greenhouse gas emission reduction from its operation in 2030 from the 2010 levels and also aims to realize net-zero emission from its electricity generation by 2040. POR aims to invest $2.3 billion in the 2022-2025 time frame to further strengthen its existing operation.

Other electric utilities also adopting measures to supply clean and reliable energy to their customers include Duke Energy (DUK - Free Report) , Xcel Energy (XEL - Free Report) and Alliant Energy (LNT - Free Report) , all planning to provide absolute clean energy by 2050.

The long-term earnings growth rate for DUK, XEL and LNT is pegged at 5.3%, 6.4% and 6.1% each. The dividend yield of Duke Energy, Xcel Energy and Alliant Energy is 3.8%, 2.7% and 2.7%, respectively. Earnings surprise delivered by DUK, XEL and LNT in the last four quarters is 2.3%, 2.1% and 4.4% each, on average.

Debt-to-Capital Ratio

POR’s total debt-to-total capital ratio is 55.12 compared with its industry average of 56.62, indicating that it is managing the business far more efficiently than its peers in the same industry. Its times interest earned ratio at the end of third-quarter 2021 was 2.88. Such a strong ratio indicates that POR will be able to meet its debt obligations in the near future without any difficulty.

Dividend Yield

On the back of its steady performance, POR could consistently pay out dividends to its shareholders. It has been increasing its dividend since 2012, consistently. The current annual dividend of Portland General Electric is $1.72 per share. POR aims atannual long-term dividend growth of 5-7%, subject to its board of directors’ approval. Moreover, it targets a payout ratio of 60-70% in the longterm.

Presently, it has a dividend yield of 3.23% compared with the industry’s 3.15%.

Return on Equity (ROE)

ROE is a financial metric that helps an investor understand how efficiently the company is using its shareholders’ funds for generating returns. POR’s ROE for the trailing 12 months is 8.66% compared with the industry’s 8.01%, reflecting its efficiency in utilizing its stockholders’ money.

Price Performance

In the past year, the stock has gained 25.3%, outperforming the industry’s rally of 6.4%.

Zacks Investment ResearchImage Source: Zacks Investment Research