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Reasons to Buy Pinnacle West Capital (PNW) Stock Right Away
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Pinnacle West Capital Corporation’s (PNW - Free Report) strategic capital investment plans should further enhance its infrastructure and help to expand its clean generation portfolio. Given its strong growth, PNW makes 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 option at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for Pinnacle West Capital’s 2024 earnings per share (EPS) has moved up 1.5% to $4.76 in the past 90 days.
The Zacks Consensus Estimate for 2024 sales is pinned at $4.88 billion, indicating year-over-year growth of 4%.
PNW’s long-term (three to five years) earnings growth rate is 7.6%. It delivered an average earnings surprise of 233.5% in the last four quarters.
Debt Position
Currently, PNW’s total debt to capital is 59.34%, better than the industry’s average of 59.58%.
The time-to-interest earned ratio at the end of the first quarter of 2024 was 2.6. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
Dividend
Pinnacle West Capital continues to increase its shareholders’ value through dividend payments. Currently, the company’s quarterly dividend is 88 cents per share, resulting in an annualized dividend of $3.52 per share, up 1.7% from the previous level of $3.46. PNW’s current dividend yield is 4.51%, better than the utility electric power industry’s 3.34%.
Systematic Investments
PNW’s consistent investments to upgrade and maintain the existing infrastructure help in providing reliable services to its expanding customer base. The company has a capital plan of $6 billion for 2024-2026, at an average annual growth rate of 5-7%. PNW expects transmission investments of nearly $1.2 billion during the same period.
Clean Power Generation
Pinnacle West Capital continues to focus on enhancing its renewable capacity. During 2024-2026, the company expects to invest nearly $2.2 billion in boosting clean power generation. Since 2020, the company contracted more than 5,000 MW of clean energy and storage to be in service for Arizona Public Service Company’s customers by the end of 2025. It also plans to install more than 2,100 MW of energy storage by 2025, including the energy storage projects under purchase power agreements and Arizona sun retrofits.
Price Performance
In the past three months, Pinnacle West Capital’s shares have risen 11.1% compared with the industry’s 1.5% growth.
PNM’s long-term earnings growth rate is 4.6%. The company delivered an average earnings surprise of 2.2% in the last four quarters.
The Zacks Consensus Estimate for POR’s 2024 EPS implies a year-over-year improvement of 29.4%. The Zacks Consensus Estimate for sales indicates year-over-year growth of 10.3%.
DTE’s long-term earnings growth rate is 6%. The Zacks Consensus Estimate for DTE Energy’s 2024 EPS implies a year-over-year increase of 16.9%.
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Reasons to Buy Pinnacle West Capital (PNW) Stock Right Away
Pinnacle West Capital Corporation’s (PNW - Free Report) strategic capital investment plans should further enhance its infrastructure and help to expand its clean generation portfolio. Given its strong growth, PNW makes 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 option at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for Pinnacle West Capital’s 2024 earnings per share (EPS) has moved up 1.5% to $4.76 in the past 90 days.
The Zacks Consensus Estimate for 2024 sales is pinned at $4.88 billion, indicating year-over-year growth of 4%.
PNW’s long-term (three to five years) earnings growth rate is 7.6%. It delivered an average earnings surprise of 233.5% in the last four quarters.
Debt Position
Currently, PNW’s total debt to capital is 59.34%, better than the industry’s average of 59.58%.
The time-to-interest earned ratio at the end of the first quarter of 2024 was 2.6. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
Dividend
Pinnacle West Capital continues to increase its shareholders’ value through dividend payments. Currently, the company’s quarterly dividend is 88 cents per share, resulting in an annualized dividend of $3.52 per share, up 1.7% from the previous level of $3.46. PNW’s current dividend yield is 4.51%, better than the utility electric power industry’s 3.34%.
Systematic Investments
PNW’s consistent investments to upgrade and maintain the existing infrastructure help in providing reliable services to its expanding customer base. The company has a capital plan of $6 billion for 2024-2026, at an average annual growth rate of 5-7%. PNW expects transmission investments of nearly $1.2 billion during the same period.
Clean Power Generation
Pinnacle West Capital continues to focus on enhancing its renewable capacity. During 2024-2026, the company expects to invest nearly $2.2 billion in boosting clean power generation. Since 2020, the company contracted more than 5,000 MW of clean energy and storage to be in service for Arizona Public Service Company’s customers by the end of 2025. It also plans to install more than 2,100 MW of energy storage by 2025, including the energy storage projects under purchase power agreements and Arizona sun retrofits.
Price Performance
In the past three months, Pinnacle West Capital’s shares have risen 11.1% compared with the industry’s 1.5% growth.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are PNM Resources (PNM - Free Report) , Portland General Electric (POR - Free Report) and DTE Energy (DTE - 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.
PNM’s long-term earnings growth rate is 4.6%. The company delivered an average earnings surprise of 2.2% in the last four quarters.
The Zacks Consensus Estimate for POR’s 2024 EPS implies a year-over-year improvement of 29.4%. The Zacks Consensus Estimate for sales indicates year-over-year growth of 10.3%.
DTE’s long-term earnings growth rate is 6%. The Zacks Consensus Estimate for DTE Energy’s 2024 EPS implies a year-over-year increase of 16.9%.