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Reasons to Add Pinnacle West Capital (PNW) to Your Portfolio

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Pinnacle West Capital Corporation (PNW - Free Report) is an electric utility that provides electricity services (wholesale or retail) in the state of Arizona through its subsidiaries. Pinnacle West’s investments in generation, transmission & distribution lines will help the company serve customers efficiently. Development activities in PNW’s service territories are driving demand.

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 Projections & Surprise History

The Zacks Consensus Estimate for 2022 earnings per share is pegged at $3.96, which indicates an increase of 1.5% in the past 60 days. The Zacks Consensus Estimate for 2023 earnings per share is pegged at $4.22, which indicates an increase of 0.5% in the past 60 days.

Pinnacle West Capital’s trailing four-quarter average earnings surprise is 73.9%.

Return on Equity (ROE)

Return on Equity (ROE) is a measure of a company’s efficiency in utilizing shareholder’s funds. ROE for the trailing 12 months for Pinnacle West Capital is 10.38% compared with the industry’s 9.29%.

Systematic Investments & Emission Reduction

Pinnacle West Capital makes consistent investments to upgrade and maintain the existing infrastructure for providing 24x7 reliable services to the customer base. PNW has plans to invest $2.2 billion for strengthening its transmission and distribution operations in the 2022-2024 time period.

Pinnacle West Capital announced its emission reduction target, and aims to cut emissions by 100% by 2050 and exit all coal-based electricity generation by 2031.

Dividend Yield

Utility companies generally distribute dividends. Currently, Pinnacle West Capital has a dividend yield of 4.3% compared with the industry’s 2.9%.

Price Performance

In the past three months, the stock has gained 13.5% compared with the industry’s growth of 5.4%.

Zacks Investment Research
Image Source: Zacks Investment Research

Other Stocks to Consider

Other top-ranked stocks in the same space include Ameren Corporation (AEE - Free Report) , WEC Energy Group (WEC - Free Report) and NextEra Energy (NEE - Free Report) , each currently holding a Zacks Rank #2.

Ameren, WEC Energy, and NextEra’s long-term (three to five years) earnings growth is currently pegged at 7.2%, 6%, and 8.8%, respectively.

The Zacks Consensus Estimate for 2022 earnings for Ameren, WEC Energy, and NextEra has moved up 0.5%, 0.2%, and 1.8%, respectively, in the past 60 days.