We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
3 Utilities With Stable Income Streams to Help You Retire Early
Read MoreHide Full Article
The year 2022 was marked by order and chaos at the same time in the U.S. utility space. While the recovery in economic activities induced by an improving COVID situation worldwide boosted industrial electric sales, extreme climate conditions, ranging from severe drought to hurricanes, had an adverse impact on the overall performance of the Utilities sector.
However, this does not mean one should worry about investment opportunities in Utilities stocks. After all, Utilities is one of the few sectors wherein demand never dies out, even during turbulent economic conditions. And this steady demand scenario supports utilities in providing a stable dividend to investors.
As we head toward 2023, investors who desire a steady stream of income can choose stocks from the defensive, matured, regulated and domestic-focused utility space to avoid huge losses in times of crisis. Here, we have presented three utility stocks, Companhia Paranaense de Energia (ELP - Free Report) , Entergy (ETR - Free Report) and Pinnacle West Capital (PNW - Free Report) , which are expected to gain substantially in 2023, capitalizing on their fundamental strength.
Factors Boosting Utilities’ Prospects
The rapidly expanding renewable energy space is perhaps the largest growth catalyst currently boosting the U.S. utility sector. The U.S. Energy and Information Administration (EIA) forecast that the annual share of U.S. electricity generation from renewable energy sources will rise from 20% in 2021 to 22% in 2022 and 24% in 2023, driven by the continuing addition of solar and wind-generating capacity.
EIA further expects total solar, wind generation and battery storage addition of 38 GW and 54 GW in 2022 and 2023, respectively. With the entire utility space focused on the transition to a greener environment, the aforementioned projections are indicative of the ample growth opportunities that utilities offer.
Another factor driving growth in the utility space is the Inflation Reduction Act (IRA) of 2022, which aims at investing nearly $3 billion in the U.S. transmission system. This, in turn, should bolster grid resiliency, thereby boosting utility customers’ confidence in this industry.
Companhia Paranaense de Energia: Based in Brazil, Copel Companhia Paranaense de Energia is involved in the generation, distribution and transmission of electricity. In November 2022, the company announced the acquisition of two more wind hubs worth BRL 1.8 billion enterprise value, which will add more than 260 megawatts of installed capacity to its portfolio. This should enhance the company’s position in the clean-energy-driven utility space.
ELP currently carries a Zacks Rank #2 (Buy). Its 2023 earnings growth rate is pegged at 134.6%. Moreover, the stock boasts an annual dividend yield of 9.27%. The stock has rallied 22.6% year to date.
Image Source: Zacks Investment Research
Entergy: Based in New Orleans, LA, Entergy is primarily engaged in electric power production and retail distribution of power. Entergy is developing its capital investment plan for 2023 through 2025 and currently anticipates that the utility will make approximately $15.5 billion in capital investments during that period. Such investments would further strengthen the grid’s resiliency.
ETR currently carries a Zacks Rank #2. Its 2023 sales and earnings growth rates are pegged at 9% and 6.3%, respectively. Moreover, the stock boasts an annual dividend yield of 3.77%. The stock has rallied 1.8% year to date.
Image Source: Zacks Investment Research
Pinnacle West: Based in Phoenix, AZ, Pinnacle West Capital is involved in the generation, transmission and distribution of electricity from coal, nuclear, gas, oil and solar. To efficiently serve its expanding customer base, the company plans to invest $4.7 billion during the 2022-2024 period.
PNW currently carries a Zacks Rank #2. Its 2023 sales growth rate is pegged at 5.7%. Moreover, the stock boasts an annual dividend yield of 4.44%. The stock has rallied 10.1% year to date.
Image Source: Zacks Investment Research
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
3 Utilities With Stable Income Streams to Help You Retire Early
The year 2022 was marked by order and chaos at the same time in the U.S. utility space. While the recovery in economic activities induced by an improving COVID situation worldwide boosted industrial electric sales, extreme climate conditions, ranging from severe drought to hurricanes, had an adverse impact on the overall performance of the Utilities sector.
However, this does not mean one should worry about investment opportunities in Utilities stocks. After all, Utilities is one of the few sectors wherein demand never dies out, even during turbulent economic conditions. And this steady demand scenario supports utilities in providing a stable dividend to investors.
As we head toward 2023, investors who desire a steady stream of income can choose stocks from the defensive, matured, regulated and domestic-focused utility space to avoid huge losses in times of crisis. Here, we have presented three utility stocks, Companhia Paranaense de Energia (ELP - Free Report) , Entergy (ETR - Free Report) and Pinnacle West Capital (PNW - Free Report) , which are expected to gain substantially in 2023, capitalizing on their fundamental strength.
Factors Boosting Utilities’ Prospects
The rapidly expanding renewable energy space is perhaps the largest growth catalyst currently boosting the U.S. utility sector. The U.S. Energy and Information Administration (EIA) forecast that the annual share of U.S. electricity generation from renewable energy sources will rise from 20% in 2021 to 22% in 2022 and 24% in 2023, driven by the continuing addition of solar and wind-generating capacity.
EIA further expects total solar, wind generation and battery storage addition of 38 GW and 54 GW in 2022 and 2023, respectively. With the entire utility space focused on the transition to a greener environment, the aforementioned projections are indicative of the ample growth opportunities that utilities offer.
Another factor driving growth in the utility space is the Inflation Reduction Act (IRA) of 2022, which aims at investing nearly $3 billion in the U.S. transmission system. This, in turn, should bolster grid resiliency, thereby boosting utility customers’ confidence in this industry.
Our Choices
Considering the aforementioned discussion, selecting a utility stock is a prudent step. With the help of the Zacks Stocks Screener, we have narrowed our search to the following three stocks based on a favorable Zacks Rank and other fundamental metrics. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Companhia Paranaense de Energia: Based in Brazil, Copel Companhia Paranaense de Energia is involved in the generation, distribution and transmission of electricity. In November 2022, the company announced the acquisition of two more wind hubs worth BRL 1.8 billion enterprise value, which will add more than 260 megawatts of installed capacity to its portfolio. This should enhance the company’s position in the clean-energy-driven utility space.
ELP currently carries a Zacks Rank #2 (Buy). Its 2023 earnings growth rate is pegged at 134.6%. Moreover, the stock boasts an annual dividend yield of 9.27%. The stock has rallied 22.6% year to date.
Image Source: Zacks Investment Research
Entergy: Based in New Orleans, LA, Entergy is primarily engaged in electric power production and retail distribution of power. Entergy is developing its capital investment plan for 2023 through 2025 and currently anticipates that the utility will make approximately $15.5 billion in capital investments during that period. Such investments would further strengthen the grid’s resiliency.
ETR currently carries a Zacks Rank #2. Its 2023 sales and earnings growth rates are pegged at 9% and 6.3%, respectively. Moreover, the stock boasts an annual dividend yield of 3.77%. The stock has rallied 1.8% year to date.
Image Source: Zacks Investment Research
Pinnacle West: Based in Phoenix, AZ, Pinnacle West Capital is involved in the generation, transmission and distribution of electricity from coal, nuclear, gas, oil and solar. To efficiently serve its expanding customer base, the company plans to invest $4.7 billion during the 2022-2024 period.
PNW currently carries a Zacks Rank #2. Its 2023 sales growth rate is pegged at 5.7%. Moreover, the stock boasts an annual dividend yield of 4.44%. The stock has rallied 10.1% year to date.
Image Source: Zacks Investment Research