Atlantica Yield’s (AY - Free Report) earnings estimates have been revised upward over the past 60 days, reflecting analysts’ confidence in the stock. The Zacks Consensus Estimate for 2018 and 2019 earnings has moved 26.1% and 22.4% north to 87 cents and $1.04 per share, respectively, within the same time frame.
Atlantica Yield, a Zacks Rank #1 (Strong Buy) stock, owns, acquires and operates renewable energy, natural gas, power, electric transmission lines, and water assets in North America, South America, Spain, Algeria, and South Africa.
The stock has an impressive VGM Score of A. Here V stands for Value, G for Growth and M for Momentum, with the score being a weighted combination of all the three factors. Back tested results show that stocks with a favorable VGM Score of A or B coupled with a bullish Zacks Rank offer the best investment bets.
Let’s focus on the factors that make Atlantica Yield an attractive stock to hold on to for obtaining greater returns.
New Sponsor: On Mar 9, 2018, Algonquin Power & Utilities (AQN - Free Report) announced that it has acquired 25% of Atlantica Yield for $608 million. We expect Atlantica Yield’s recent partnership with Algonquin, and new external and internal opportunities to drive performance of the company.
Price Appreciation: Shares of Atlantica Yield have gained 5.7% compared with the industry’s growth of 2.2%, since the announcement of 25% acquired interest by Algonquin.
Dividend Increase: The company continues to add shareholder value in the form of regular dividend payouts. On May 11, 2018, its Board of Directors approved a 28% year-over-year hike in quarterly dividend to 32 cents.
The company is aiming 8-10% growth in dividend rate within the 2018-2022 time period, courtesy of expected solid return from its existing portfolio of assets and accretive investments.
Growth Projections: The Zacks Consensus Estimate for current-year earnings per share is pegged at 87 cents per share, reflecting a significant year-over-year surge of 583.3%.
For 2019, the consensus estimate for EPS is pegged at $1.04 per share, depicting a 19.5% year-over-year rise.
Other Stocks to Consider
Other top-ranked stocks from the Zack Utility Sector include Avangrid, Inc. (AGR - Free Report) and NiSource, Inc. (NI - Free Report) , each holding a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Avangrid pulled off an average four-quarter positive surprise of 7.79%. The Zacks Consensus Estimate for 2018 has moved up 0.4% in the past 60 days to $2.38 per share. Its earnings are expected to grow 9.1% over the long-term (3-5 year) period.
NiSource delivered a positive average four-quarter earnings surprise of 0.78%. The Zacks Consensus Estimate for 2018 has moved up 0.8% in the past 60 days to $1.29 per share. The company’s earnings are projected to increase 5.5% over the long-term period.
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