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Reasons to Add Consolidated Edison (ED) to Your Portfolio Now
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Consolidated Edison Inc’s (ED - Free Report) systematic capital investment plan for infrastructure development and emission reduction will further drive its performance. Given its growth opportunities and strong dividend history, ED makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for ED’s 2023 earnings per share (EPS) has increased 0.2% to $4.86 in the past 30 days. This indicates a year-over-year bottom-line improvement of 6.8%.
ED’s long-term (three- to five-year) earnings growth rate is 2%. It delivered an average earnings surprise of 9.5% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, Consolidated Edison’s ROE is 8.36%, higher than the industry’s average of 4.91%. This indicates that the company has been utilizing its funds more constructively than its peers in the electric power utility industry.
Dividend History
Consolidated Edison has been consistently increasing shareholders’ value by paying dividends. Currently, its quarterly dividend is 81 cents per share. This resulted in an annualized dividend of $3.24 per share, indicating a 2.5% improvement from the previous year’s $3.16. The company’s current dividend yield is 3.48%, better than the Zacks S&P 500 Composite's average of 1.43%.
Debt Position
Currently, ED’s total debt to capital is 50.54%, better than industry’s average of 58.1%.
The time to interest earned ratio at the end of first-quarter 2023 was 4.3. The ratio, being greater than one, reflects Consolidated Edison’s ability to meet future debt obligations without difficulties.
Systematic Investments
The company continues to follow a systematic capital investment plan for infrastructure development and maintain the reliability of its electric, gas and steam delivery systems. It has a robust capital expenditure plan of $14.6 billion for the 2023-2025 period.
Consolidated Edison plans to invest $72 billion in the next ten years. The company’s rate base is projected to witness a CAGR of 6.2% during 2023-2025, buoyed by its planned capital expenditures and timely rate revisions from regulatory authorities.
Price Performance
In the past month, ED’s shares have rallied 1.2% against the sector’s average decline of 2.4%.
FirstEnergy’s long-term earnings growth rate is 6.45%. The Zacks Consensus Estimate for the company’s 2023 EPS is pinned at $2.51, implying a year-over-year increase of 4.2%.
Alliant Energy’s long-term earnings growth rate is 6.47%. The consensus estimate for the company’s 2023 EPS is pegged at $2.88, indicating a year-over-year improvement of 2.9%.
NextEra Energy’s long-term earnings growth rate is 8.38%. The consensus mark for the company’s 2023 EPS is pinned at $3.11, indicating year-over-year growth of 7.2%.
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Reasons to Add Consolidated Edison (ED) to Your Portfolio Now
Consolidated Edison Inc’s (ED - Free Report) systematic capital investment plan for infrastructure development and emission reduction will further drive its performance. Given its growth opportunities and strong dividend history, ED makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for ED’s 2023 earnings per share (EPS) has increased 0.2% to $4.86 in the past 30 days. This indicates a year-over-year bottom-line improvement of 6.8%.
ED’s long-term (three- to five-year) earnings growth rate is 2%. It delivered an average earnings surprise of 9.5% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, Consolidated Edison’s ROE is 8.36%, higher than the industry’s average of 4.91%. This indicates that the company has been utilizing its funds more constructively than its peers in the electric power utility industry.
Dividend History
Consolidated Edison has been consistently increasing shareholders’ value by paying dividends. Currently, its quarterly dividend is 81 cents per share. This resulted in an annualized dividend of $3.24 per share, indicating a 2.5% improvement from the previous year’s $3.16. The company’s current dividend yield is 3.48%, better than the Zacks S&P 500 Composite's average of 1.43%.
Debt Position
Currently, ED’s total debt to capital is 50.54%, better than industry’s average of 58.1%.
The time to interest earned ratio at the end of first-quarter 2023 was 4.3. The ratio, being greater than one, reflects Consolidated Edison’s ability to meet future debt obligations without difficulties.
Systematic Investments
The company continues to follow a systematic capital investment plan for infrastructure development and maintain the reliability of its electric, gas and steam delivery systems. It has a robust capital expenditure plan of $14.6 billion for the 2023-2025 period.
Consolidated Edison plans to invest $72 billion in the next ten years. The company’s rate base is projected to witness a CAGR of 6.2% during 2023-2025, buoyed by its planned capital expenditures and timely rate revisions from regulatory authorities.
Price Performance
In the past month, ED’s shares have rallied 1.2% against the sector’s average decline of 2.4%.
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Other Stocks to Consider
A few other top-ranked stocks from the same industry are FirstEnergy Corp. (FE - Free Report) , Alliant Energy (LNT - Free Report) and NextEra Energy, Inc. (NEE - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
FirstEnergy’s long-term earnings growth rate is 6.45%. The Zacks Consensus Estimate for the company’s 2023 EPS is pinned at $2.51, implying a year-over-year increase of 4.2%.
Alliant Energy’s long-term earnings growth rate is 6.47%. The consensus estimate for the company’s 2023 EPS is pegged at $2.88, indicating a year-over-year improvement of 2.9%.
NextEra Energy’s long-term earnings growth rate is 8.38%. The consensus mark for the company’s 2023 EPS is pinned at $3.11, indicating year-over-year growth of 7.2%.