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Spire (SR) to Gain From Investments & Technological Upgrades
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Spire Inc.’s (SR - Free Report) technological modernization, expanding natural gas customer base and capital investments for infrastructure strengthening are likely to increase its earnings predictability. The company’s consistent dividend payment increases shareholders’ value.
However, this Zacks Rank #3 (Hold) stock’s dependence on its subsidiaries to meet all financial needs acts as a headwind.
Tailwinds
Spire makes consistent investments to expand operations as well as upgrade and maintain its existing infrastructure. The company invested $552 million in fiscal 2022 and plans to spend $700 million in fiscal 2023. During the 10-year period of fiscal 2023-2032, the company aims to invest $7 billion for strengthening its existing operations.
The company also invested millions of dollars for procurement and installation of advanced meters this year. Spire continues to install ultrasonic meters across utilities to improve its consumer experience. The company is driving innovation through technological upgrades. The use of new technology is not only enabling it to improve its services but also lower operating costs, thereby benefiting customers.
The company has been registering a consistent increase in its average number of gas utility customers over the past few years. SR’s customer volumes inched up 0.7% and 0.4% in fiscal 2021 and fiscal 2022, respectively, year over year.
Headwinds
Spire is a holding company with no significant assets. This makes it dependent on its operating units to meet its financial obligations.
Per the U.S. Pipeline and Hazardous Materials Safety Administration, the company needs to develop integrity management programs to protect pipeline segments in areas prone to leaks or rupture. Such programs and repairs may impose significant financial pressure on the utility. If the company fails to comply with applicable statutes, rules, related regulations and orders, it could be subject to major penalties and fines.
The Zacks Consensus Estimate for Atmos Energy, New Jersey Resources and ONE Gas’ 2023 earnings per share indicates an increase of 7.14%, 5.2% and 1.23%, respectively.
Long-term (three- to five-year) earnings growth of Atmos Energy, New Jersey Resources and ONE Gas is pegged at 7.5%, 6% and 5%, respectively.
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Spire (SR) to Gain From Investments & Technological Upgrades
Spire Inc.’s (SR - Free Report) technological modernization, expanding natural gas customer base and capital investments for infrastructure strengthening are likely to increase its earnings predictability. The company’s consistent dividend payment increases shareholders’ value.
However, this Zacks Rank #3 (Hold) stock’s dependence on its subsidiaries to meet all financial needs acts as a headwind.
Tailwinds
Spire makes consistent investments to expand operations as well as upgrade and maintain its existing infrastructure. The company invested $552 million in fiscal 2022 and plans to spend $700 million in fiscal 2023. During the 10-year period of fiscal 2023-2032, the company aims to invest $7 billion for strengthening its existing operations.
The company also invested millions of dollars for procurement and installation of advanced meters this year. Spire continues to install ultrasonic meters across utilities to improve its consumer experience. The company is driving innovation through technological upgrades. The use of new technology is not only enabling it to improve its services but also lower operating costs, thereby benefiting customers.
The company has been registering a consistent increase in its average number of gas utility customers over the past few years. SR’s customer volumes inched up 0.7% and 0.4% in fiscal 2021 and fiscal 2022, respectively, year over year.
Headwinds
Spire is a holding company with no significant assets. This makes it dependent on its operating units to meet its financial obligations.
Per the U.S. Pipeline and Hazardous Materials Safety Administration, the company needs to develop integrity management programs to protect pipeline segments in areas prone to leaks or rupture. Such programs and repairs may impose significant financial pressure on the utility. If the company fails to comply with applicable statutes, rules, related regulations and orders, it could be subject to major penalties and fines.
Stocks to Consider
Some better-ranked stocks for investors interested in the same industry are Atmos Energy Corporation (ATO - Free Report) , New Jersey Resources (NJR - Free Report) and ONE Gas, Inc. (OGS - Free Report) , each holding a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Atmos Energy, New Jersey Resources and ONE Gas’ 2023 earnings per share indicates an increase of 7.14%, 5.2% and 1.23%, respectively.
Long-term (three- to five-year) earnings growth of Atmos Energy, New Jersey Resources and ONE Gas is pegged at 7.5%, 6% and 5%, respectively.