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Exelon (EXC) Promises Better Returns: Apt to Hold the Stock?

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Estimates for Exelon Corporation (EXC - Free Report) 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 0.7% and 0.6% north to $3.10 and $3.08, respectively.

Shares of the company have rallied nearly 15.8% over a year against its industry’s decline of 5.4%. Exelon is a utility services holding company that operates through its subsidiaries and has operations in 48 states, including the District of Columbia in the United States, along with Canada.

 



Let’s delve deeper into the factors that make it a good investment option.
 
Growth Projections: The Zacks Consensus Estimate for 2018 earnings per share is pegged at $3.10, reflecting a year-over-year improvement of 19.23%. Its long-term earnings growth rate is pegged at 5.7%.

Ongoing Investments to Strengthen Operation: Exelon plans to invest $21 billion over the 2018-2021-time frame on its regulated operations, in a bid to improve the reliability of its operations. Such systematic investments in regulated assets will drive rate base growth of 7.4% during this time frame, up from the previous expectation of 6.5% in the 2017-2020 period.

Cost Management & Debt Reduction: Exelon is working to lower its expenses, particularly operating and maintenance expenses by 1.9% over the 2018-2021 time frame. In addition, strong free cash flow generating capability of the company will help lower its existing debt in excess of $4 billion over the next four years.

VGM Score: The stock has a favorable 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 an impressive VGM Score of A or B coupled with a bullish Zacks Rank offer the best investment bets.

Zacks Rank & Key Picks

Exelon Corporation currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Some better-ranked stocks from the same industry are IDACORP Inc. (IDA - Free Report) , DTE Energy Company (DTE - Free Report) and Ameren Corporation (AEE - Free Report) , each carrying a Zacks Rank #2 (Buy).

Long-term earnings growth rate of IDACORP, DTE Energy and Ameren is currently pegged at 2.8%, 5.3% and 6.9%, respectively.

The Zacks Consensus Estimate for IDACORP, DTE Energy and Ameren for 2018 has moved up 2.15%, 6.8% and 5.6%, respectively, in the past 60 days.

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