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Here's Why You Should Add Spire (SR) to Your Portfolio Now
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Spire, Inc.’s (SR - Free Report) consistent investments to upgrade and maintain its existing infrastructure, as well as expand operations, will drive its bottom line. During 10 years between 2023 and 2032, the company aims to invest $7 billion to strengthen the existing operations. Given its strong dividend history and growth opportunities, Spire makes for a solid investment option in the utility sector.
The Zacks Consensus Estimate for fiscal 2023 earnings per share (EPS) has moved north 2% in the past 60 days to $4.22. This implies a year-over-year increase of 9.3%.
The company’s long-term (three to five-year) earnings growth is pegged at 4.22%. It had delivered an average earnings surprise of 10.7% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing the funds to generate higher returns. Currently, Spire’s ROE is 9.18%, higher than the sector’s average of 5.73%. This indicates that the company has been utilizing the funds more constructively than its peers in the utility sector.
Dividend History
Spire has been consistently paying out dividends since 1946. The company raised its annual dividend for fiscal 2023, marking the 20th consecutive year of a dividend increase and the 78th consecutive year of a dividend payment. In fiscal 2022, the company paid out dividends worth $141.9 million compared with $133.2 million in the year-ago period. Spire’s current quarterly dividend is 72 cents per share. This resulted in an annualized dividend of $2.88 per share, up 5.1% from the previous year’s $2.74. Spire’s current dividend yield is 4.1%, better than the industry’s yield of 3.07%.
Systematic Investments & Customer Growth
Spire aims to expand business organically instead of making systematic investments to improve infrastructure and advance through innovation. The company plans capital expenditure of $700 million for fiscal 2023, including $150 million for midstream businesses, primarily for the Spire Storage expansion. More than 98% of the planned investment is allotted to long-term pipeline replacement programs, which have good recovery mechanisms. It is also focused on new business, technology and innovation, including the continued rollout of ultrasonic meters. The company expects systematic investment to drive 7-8% rate base and 5-7% EPS growth over the long term.
Spire’s gas utility customers increased 0.4% from its fiscal 2021 number. Residential revenues contributed 73% to total operating revenues compared with 58% in fiscal 2021.
Price Performance
In the past three months, the company’s stock has gained 2.7% against the industry’s 2.4% decline.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same sector are New Jersey Resources (NJR - Free Report) , Xcel Energy, Inc. (XEL - Free Report) and Global Water Resources, Inc. (GWRS - Free Report) , each carrying a Zacks Rank #2 at present.
NJR’s long-term (three to five-year) earnings growth is pegged at 6%. The Zacks Consensus Estimate for 2023 EPS is $2.63, implying a year-over-year increase of 5.2%.
XEL’s long-term earnings growth is pegged at 6.62%. The Zacks Consensus Estimate for 2023 EPS is $3.37, indicating a year-over-year rise of 6.31%.
GWRS’ long-term earnings growth is pegged at 15%. The Zacks Consensus Estimate for 2023 EPS is 27 cents, suggesting year-over-year growth of 12.5%.
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Here's Why You Should Add Spire (SR) to Your Portfolio Now
Spire, Inc.’s (SR - Free Report) consistent investments to upgrade and maintain its existing infrastructure, as well as expand operations, will drive its bottom line. During 10 years between 2023 and 2032, the company aims to invest $7 billion to strengthen the existing operations. Given its strong dividend history and growth opportunities, Spire makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment option at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Projections & Earnings Growth
The Zacks Consensus Estimate for fiscal 2023 earnings per share (EPS) has moved north 2% in the past 60 days to $4.22. This implies a year-over-year increase of 9.3%.
The company’s long-term (three to five-year) earnings growth is pegged at 4.22%. It had delivered an average earnings surprise of 10.7% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing the funds to generate higher returns. Currently, Spire’s ROE is 9.18%, higher than the sector’s average of 5.73%. This indicates that the company has been utilizing the funds more constructively than its peers in the utility sector.
Dividend History
Spire has been consistently paying out dividends since 1946. The company raised its annual dividend for fiscal 2023, marking the 20th consecutive year of a dividend increase and the 78th consecutive year of a dividend payment. In fiscal 2022, the company paid out dividends worth $141.9 million compared with $133.2 million in the year-ago period. Spire’s current quarterly dividend is 72 cents per share. This resulted in an annualized dividend of $2.88 per share, up 5.1% from the previous year’s $2.74. Spire’s current dividend yield is 4.1%, better than the industry’s yield of 3.07%.
Systematic Investments & Customer Growth
Spire aims to expand business organically instead of making systematic investments to improve infrastructure and advance through innovation. The company plans capital expenditure of $700 million for fiscal 2023, including $150 million for midstream businesses, primarily for the Spire Storage expansion. More than 98% of the planned investment is allotted to long-term pipeline replacement programs, which have good recovery mechanisms. It is also focused on new business, technology and innovation, including the continued rollout of ultrasonic meters. The company expects systematic investment to drive 7-8% rate base and 5-7% EPS growth over the long term.
Spire’s gas utility customers increased 0.4% from its fiscal 2021 number. Residential revenues contributed 73% to total operating revenues compared with 58% in fiscal 2021.
Price Performance
In the past three months, the company’s stock has gained 2.7% against the industry’s 2.4% decline.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same sector are New Jersey Resources (NJR - Free Report) , Xcel Energy, Inc. (XEL - Free Report) and Global Water Resources, Inc. (GWRS - Free Report) , each carrying a Zacks Rank #2 at present.
NJR’s long-term (three to five-year) earnings growth is pegged at 6%. The Zacks Consensus Estimate for 2023 EPS is $2.63, implying a year-over-year increase of 5.2%.
XEL’s long-term earnings growth is pegged at 6.62%. The Zacks Consensus Estimate for 2023 EPS is $3.37, indicating a year-over-year rise of 6.31%.
GWRS’ long-term earnings growth is pegged at 15%. The Zacks Consensus Estimate for 2023 EPS is 27 cents, suggesting year-over-year growth of 12.5%.