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Reasons to Add DTE Energy (DTE) to Your Portfolio Right Now
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DTE Energy’s (DTE - Free Report) strategic long-term investment plans to maintain and upgrade its infrastructure should boost performance. The company also boasts a strong solvency position.
Let’s explore the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections
DTE Energy’s long-term (three to five-year) earnings growth rate is pegged at 6.3%.
The Zacks Consensus Estimate for DTE’s first-quarter 2024 earnings per share (EPS) stands at $1.79, indicating an improvement of 34.6% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for first-quarter 2024 sales is pinned at $3.90 billion, suggesting an improvement of 3.2% from the year-ago quarter’s tally.
Return on Equity
Return on Equity (ROE) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, DTE Energy’s ROE is 9.85%, which is higher than the industry’s average of 7.01%. This indicates that the company has been utilizing its funds more effectively than its peers in the electric power utility industry.
Solvency
Times interest earned (TIE) is a solvency ratio. It is used to measure how well the company can cover its interest obligations. The TIE ratio at the end of third-quarter 2023 was 2.79, which being greater than 1 indicates that DTE is in a good position to meet its interest obligations.
Dividend History
DTE Energy has a history of issuing cash dividends for more than 100 years now. In February 2024, DTE announced a quarterly dividend of $1.02 per share, resulting in an annual dividend of $4.08. The company’s payout ratio currently sits at 75% of earnings.
DTE’s current dividend yield is 3.91%, better than the Zacks S&P 500 Composite’s 1.32%.
Systematic Investments & Clean Energy Transition
DTE Energy continues with systematic investments in its infrastructure development projects. During 2023, DTE Energy made capital expenditures totaling $4 billion and expects $4.6-$4.7 billion in 2024. For the 2024-2028 period, the company expects to invest $25 billion, which comprises $20 billion in DTE Electric, $3.7 billion in DTE Gas and $1-$1.5 billion in DTE Vantage. Such investments should enable the company to duly achieve its long-term operating earnings growth in the range of 6-8% through 2028.
Per the recent Integrated Resource Plan, DTE Energy aims to reach net zero by 2050. It plans to invest more than $11 billion in the next 10 years for cleaner energy transition. DTE will retire two coal units at Monroe in 2028 and accelerate the retirement of the remaining two units by 2032.
For clean energy, it is developing 6,500 megawatts (MW) of solar, 8,900 MW of wind and 1,830 MW of energy storage by 2042. These initiatives will further strengthen DTE’s position in the clean energy transition that the entire utility sector is currently undergoing.
Price Performance
In the past six months, shares of DTE have lost 2.8% compared with the industry’s 9.5% decline.
Alliant Energy’s long-term earnings growth rate is 6.2%. The Zacks Consensus Estimate for LNT’s 2024 sales indicates an increase of 16.5% from that estimated in 2023.
Consolidated Edison’s long-term earnings growth rate is 2%. The Zacks Consensus Estimate for ED’s 2024 sales implies an improvement of 2.8% from that estimated in 2023.
Duke Energy’s long-term earnings growth rate is 6.3%. The Zacks Consensus Estimate for DUK’s 2024 sales implies an improvement of 3.9% from that estimated in 2023.
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Reasons to Add DTE Energy (DTE) to Your Portfolio Right Now
DTE Energy’s (DTE - Free Report) strategic long-term investment plans to maintain and upgrade its infrastructure should boost performance. The company also boasts a strong solvency position.
Let’s explore the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections
DTE Energy’s long-term (three to five-year) earnings growth rate is pegged at 6.3%.
The Zacks Consensus Estimate for DTE’s first-quarter 2024 earnings per share (EPS) stands at $1.79, indicating an improvement of 34.6% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for first-quarter 2024 sales is pinned at $3.90 billion, suggesting an improvement of 3.2% from the year-ago quarter’s tally.
Return on Equity
Return on Equity (ROE) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, DTE Energy’s ROE is 9.85%, which is higher than the industry’s average of 7.01%. This indicates that the company has been utilizing its funds more effectively than its peers in the electric power utility industry.
Solvency
Times interest earned (TIE) is a solvency ratio. It is used to measure how well the company can cover its interest obligations. The TIE ratio at the end of third-quarter 2023 was 2.79, which being greater than 1 indicates that DTE is in a good position to meet its interest obligations.
Dividend History
DTE Energy has a history of issuing cash dividends for more than 100 years now. In February 2024, DTE announced a quarterly dividend of $1.02 per share, resulting in an annual dividend of $4.08. The company’s payout ratio currently sits at 75% of earnings.
DTE’s current dividend yield is 3.91%, better than the Zacks S&P 500 Composite’s 1.32%.
Systematic Investments & Clean Energy Transition
DTE Energy continues with systematic investments in its infrastructure development projects. During 2023, DTE Energy made capital expenditures totaling $4 billion and expects $4.6-$4.7 billion in 2024. For the 2024-2028 period, the company expects to invest $25 billion, which comprises $20 billion in DTE Electric, $3.7 billion in DTE Gas and $1-$1.5 billion in DTE Vantage. Such investments should enable the company to duly achieve its long-term operating earnings growth in the range of 6-8% through 2028.
Per the recent Integrated Resource Plan, DTE Energy aims to reach net zero by 2050. It plans to invest more than $11 billion in the next 10 years for cleaner energy transition. DTE will retire two coal units at Monroe in 2028 and accelerate the retirement of the remaining two units by 2032.
For clean energy, it is developing 6,500 megawatts (MW) of solar, 8,900 MW of wind and 1,830 MW of energy storage by 2042. These initiatives will further strengthen DTE’s position in the clean energy transition that the entire utility sector is currently undergoing.
Price Performance
In the past six months, shares of DTE have lost 2.8% compared with the industry’s 9.5% decline.
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Other Stocks to Consider
A few other top-ranked stocks from the same industry are Alliant Energy (LNT - Free Report) , Consolidated Edison (ED - Free Report) and Duke Energy (DUK - Free Report) . Each stock presently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Alliant Energy’s long-term earnings growth rate is 6.2%. The Zacks Consensus Estimate for LNT’s 2024 sales indicates an increase of 16.5% from that estimated in 2023.
Consolidated Edison’s long-term earnings growth rate is 2%. The Zacks Consensus Estimate for ED’s 2024 sales implies an improvement of 2.8% from that estimated in 2023.
Duke Energy’s long-term earnings growth rate is 6.3%. The Zacks Consensus Estimate for DUK’s 2024 sales implies an improvement of 3.9% from that estimated in 2023.