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Xcel Energy (XEL) Strong on Capex and Clean Energy Plans

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Xcel Energy Inc.’s (XEL - Free Report) planned investments in enhancing clean-energy generation capacity and infrastructure plus a consistent expansion in its existing natural gas and electric customer base are key catalysts.

In the past six months, shares of this currently Zacks Rank #2 (Buy) player have gained 1.4%, underperforming the industry’s growth of 5.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Six Months Price Performance

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The Zacks Consensus Estimate for 2021 and 2022 earnings is pegged at $2.97 and $3.17 per share each, indicating respective growth of 6.45% and 6.94% from the corresponding year-ago reported figures. Xcel Energy’s long-term (three-five years) earnings growth rate is 6.36%.


Xcel Energy continues to invest substantially in its utility assets and renewable projects, which will increase the reliability of its services and help meet rising electricity demand, effectively. These investments are aimed to strengthen and expand its transmission, distribution, electric generation and renewable projects.

XEL is focusing on its transit to clean energy. In 2019, the subsidiary NSP-Minnesota filed its Minnesota resource plan, which runs through 2034. It reached a 51% carbon reduction in June 2021. Per this plan, XEL Energy aims to curb 85% carbon footprintand completely exit the usage of coal by 2030. Overall, XEL plans to generate 100% carbon-free electricity by 2050.

Other electric utilities also adopting measures to supply clean and reliable energy to their customers include Duke Energy (DUK - Free Report) , DTE Energy (DTE - Free Report) and Alliant Energy (LNT - Free Report) . DTE Energy remains committed to trimming carbon emissions fromelectric utility operations by 32% within 2023, 50% by 2030 and 80% by 2040 from the 2005 carbon-emission levels. Duke Energy plans to lowerits carbon footprint between 55% and 75% through 2035. Alliant Energy intends to retire all the existing coal-fired generation units by 2040 to lower emissions from the 2005 baseline by 50% within 2030.

Xcel Energy has liquidity worth $2,871 million as of Oct 26, which is sufficient to fulfill its near-term obligations.


XEL’s natural gas transmission and distribution operations are exposed to several risks associated with leaks and mechanical setbacks impacting its normal operations. Also, XEL’s business activities are susceptible to cyber security hazards, which might induce valuable data loss. It is subject to comprehensive environmental guidelines too, which could shoot up its operating costs.