Earnings estimates for NRG Yield, Inc. have been revised upward over the past 30 days, reflecting analyst’s confidence in the stock. The Zacks Consensus Estimate for 2018 and 2019 bottom line has moved 13% and 8.9% north to $1.13 and $1.23 per share, respectively.
NRG Yield, Inc. along with subsidiaries owns and operates a diversified portfolio of contracted renewable and conventional generation plus thermal infrastructure assets in the United States. The company’s primary business strategy is to focus on acquisition and ownership of assets that have predictable, long-term cash flows, for strengthening its financial position.
Let’s focus on the factors that make NRG Yield an attractive stock to hold on to for greater returns.
Price Appreciation: Shares of NRG Yield have gained 10.6% in the past year, outperforming the industry’s rise of 0.9%. The stock sports a Zacks Rank #1 (Strong Buy).
VGM Score: The stock has a favorable VGM Score of B. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors. Back tested results show that stocks with an impressive VGM Score of A or B coupled with a bullish Zacks Rank offer the best investment bets.
Earnings Surprise History & Improving Top Line: The firm delivered earnings of 61 cents per share in second-quarter 2018, beating the Zacks Consensus Estimate of 34 cents by 79.4%. The firm also boasts an encouraging earnings surprise history with the average beat being 186.9% for the last four quarters.
Focus on the core assets coupled with industry knowledge will enable the company to increase its operational efficiency as well as maximize its financial performance. The Zacks Consensus Estimate for 2018 and 2019 bottom line reflects year-over-year growth of 39.5% and 8.9%, respectively.
Acquisition Strategies: NRG Yield continues to ramp up operations through strategic acquisitions. Apart from acquiring assets from NRG Energy (NRG - Free Report) , the company is also buying renewable and conventional generation along with thermal infrastructure assets from third parties, which is aiding its business expansion and market reach. The company invested $61 million in purchasing 154 MW Buckthorn Solar, Tulare and the University of Pittsburgh Medical Center. These consolidations are expected to generate annual CAFD of $9 million over the 2019-2023 time period.
Other Stocks to Consider
A few other top-ranked stocks from the Zack Utility Sector are Ameren Corporation (AEE - Free Report) and Algonquin Power & Utilities Corp. (AQN - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Ameren pulled off an average positive surprise of 7.69% in all the trailing four quarters. The Zacks Consensus Estimate for 2018 EPS moved 5.3% up over the past 30 days to $3.21 per share.
Algonquin Power & Utilities delivered an average beat of 36.39%. The consensus mark for 2018 EPS has been revised 3% upward over the past 30 days to 68 cents per share.
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