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Reasons to Add DTE Energy (DTE) Stock to Your Portfolio Now
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DTE Energy Corp.’s (DTE - Free Report) disciplined capital spending program to maintain and upgrade the reliability of its electric utility systems boosts its performance. Given its growth prospects, DTE 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.
Solid Growth Projections
The Zacks Consensus Estimate for DTE Energy’s 2024 EPS has increased 0.45% to $6.70 per share over the past 90 days. The Zacks Consensus Estimate for 2024 revenues is pegged at $13.43 billion, which implies a year-over-year increase of 5.4%.
The company’s long-term (three to five years) earnings growth rate is pegged at 6%.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing funds to generate higher returns. Currently, DTE’s ROE is 11%, higher than the industry’s average of 8.67%. This indicates that the company has been utilizing funds more constructively than its peers in the electricity utility industry.
Debt Position
DTE’s times interest earned ratio (TIE) at the end of the fourth quarter of 2023 was 3. The TIE ratio of more than 1 indicates that the company will be able to meet its interest payment obligations in the near term without any problems.
Dividend History
DTE Energy has been consistently increasing shareholder value by steadily paying dividends. In February 2024, DTE announced a quarterly dividend of $1.02 per share, resulting in an annualized dividend of $4.08. The company’s current dividend yield is 3.95%, better than the Zacks S&P 500 Composite's average of 1.33%.
Systematic Investments
The company aims to invest a total of $25 billion over the next five years, which implies an 8.7% improvement over its prior five-year investment plan. Of this, the company’s DTE Electric subsidiary expects to make capital investments worth $20 billion over the 2024-2028 period.
Apart from its utility operations, DTE continues to make progress in its non-utility business, which provides diversity to its earnings stream. Profitable returns from such investments should enable DTE Energy to duly achieve its long-term operating earnings growth rate of 6-8%.
Price Performance
In the past six months, the stock has risen 6.3% compared with the industry’s average growth of 2%.
ES’ long-term earnings growth rate is 4.20%. The Zacks Consensus Estimate for Eversource Energy’s 2024 sales is pegged at $12.87 billion, which indicates a year-over-year improvement of 8.1%.
NI’s long-term earnings growth rate is 6%. The Zacks Consensus Estimate for NiSource’s 2024 sales is pegged at $6.14 billion, which suggests a year-over-year improvement of 11.5%.
PNW’s long-term earnings growth rate is 7.60%. The Zacks Consensus Estimate for Pinnacle West Capital’s 2024 sales is pegged at $4.87 billion, which calls for a year-over-year improvement of 3.7%.
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Reasons to Add DTE Energy (DTE) Stock to Your Portfolio Now
DTE Energy Corp.’s (DTE - Free Report) disciplined capital spending program to maintain and upgrade the reliability of its electric utility systems boosts its performance. Given its growth prospects, DTE 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.
Solid Growth Projections
The Zacks Consensus Estimate for DTE Energy’s 2024 EPS has increased 0.45% to $6.70 per share over the past 90 days. The Zacks Consensus Estimate for 2024 revenues is pegged at $13.43 billion, which implies a year-over-year increase of 5.4%.
The company’s long-term (three to five years) earnings growth rate is pegged at 6%.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing funds to generate higher returns. Currently, DTE’s ROE is 11%, higher than the industry’s average of 8.67%. This indicates that the company has been utilizing funds more constructively than its peers in the electricity utility industry.
Debt Position
DTE’s times interest earned ratio (TIE) at the end of the fourth quarter of 2023 was 3. The TIE ratio of more than 1 indicates that the company will be able to meet its interest payment obligations in the near term without any problems.
Dividend History
DTE Energy has been consistently increasing shareholder value by steadily paying dividends. In February 2024, DTE announced a quarterly dividend of $1.02 per share, resulting in an annualized dividend of $4.08. The company’s current dividend yield is 3.95%, better than the Zacks S&P 500 Composite's average of 1.33%.
Systematic Investments
The company aims to invest a total of $25 billion over the next five years, which implies an 8.7% improvement over its prior five-year investment plan. Of this, the company’s DTE Electric subsidiary expects to make capital investments worth $20 billion over the 2024-2028 period.
Apart from its utility operations, DTE continues to make progress in its non-utility business, which provides diversity to its earnings stream. Profitable returns from such investments should enable DTE Energy to duly achieve its long-term operating earnings growth rate of 6-8%.
Price Performance
In the past six months, the stock has risen 6.3% compared with the industry’s average growth of 2%.
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Other Stocks to Consider
A few other top-ranked stocks from the same industry are Eversource Energy (ES - Free Report) , NiSource (NI - Free Report) and Pinnacle West Capital (PNW - Free Report) , each holding a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ES’ long-term earnings growth rate is 4.20%. The Zacks Consensus Estimate for Eversource Energy’s 2024 sales is pegged at $12.87 billion, which indicates a year-over-year improvement of 8.1%.
NI’s long-term earnings growth rate is 6%. The Zacks Consensus Estimate for NiSource’s 2024 sales is pegged at $6.14 billion, which suggests a year-over-year improvement of 11.5%.
PNW’s long-term earnings growth rate is 7.60%. The Zacks Consensus Estimate for Pinnacle West Capital’s 2024 sales is pegged at $4.87 billion, which calls for a year-over-year improvement of 3.7%.