Estimates for Pattern Energy Group Inc. (PEGI - Free Report) have been revised upward in the past 90 days, which reflects analysts’ optimism in the stock. The Zacks Consensus Estimate for 2018 earnings have surged 41.0% to $1.51.
Production from renewable sources, cost-saving initiatives and long-term power sales agreement are tailwinds for Pattern Energy.
Shares of Pattern Energy have returned 12.0% in the past six months compared with the industry’s rise of 4.5% The company carries a Zacks Rank #3 (Hold).
Let’s focus on the factors that make Pattern Energy a stock to retain.
Surprise Trend & Year-Over-Year Growth Estimates
Pattern Energy pulled off an average positive earnings surprise of 310.93 % in the last four quarters. Year-over-year earnings growth for 2018 is estimated at 694.74%. Year-over-year sales growth for 2018 is estimated at 22.58%.
Dividend Yield & Long-Term Growth
A stable financial position enables Pattern Energy to raise shareholders’ value through the payment of regular dividends and repurchase of shares. The company’s current dividend yield is 8.33%, higher than the industry’s 3.21% and Zacks S&P 500 composite’s 1.78%. Expected long-term growth of the company is pegged at 29%.
Pattern Energy has an impressive 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 a favorable VGM Score of A or B coupled with a bullish Zacks Rank are the best investment options.
Long-Term Sales Agreement
Pattern Energy is unaffected by short-term changes in business trends. Nearly 92% of the company’s production is from renewable projects, which is sold under long-term fixed power price sale agreements. The weighted average remaining contract life of the agreements is nearly 14 years as of Dec 31, 2017.
Stocks to Consider
A few better-ranked stocks from the same space are FirstEnergy Corp. (FE - Free Report) , IDACORP, Inc. (IDA - Free Report) and DTE Energy Company (DTE - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
FirstEnergy delivered an average positive earnings surprise of 4.74% in the last four quarters. The Zacks Consensus Estimate for 2018 and 2019 earnings moved up 3.0% and 0.4% in the past 60 days, respectively.
IDACORP delivered an average positive earnings surprise of 10.10% in the last four quarters. The Zacks Consensus Estimate for 2018 and 2019 earnings inched up 2.1% and 0.9% in the past 60 days, respectively.
DTE Energy pulled off an average positive earnings surprise of 5.69% in the last four quarters. The Zacks Consensus Estimate for 2018 and 2019 earnings moved up 6.7% and 3.6% in the past 60 days, respectively.
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