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Here's Why You Should Add Pinnacle West (PNW)Stock Now

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Earnings estimates for Pinnacle West Capital Corporation (PNW - Free Report) have been revised upward in the past 90 days, which reflects analysts’ optimism surrounding the stock. The Zacks Consensus Estimate for 2019 and 2020 earnings has inched up 0.6% and 1.8% to $4.85 per share and $5.08, respectively.

Pinnacle West, along with subsidiaries, provides electricity services (wholesale or retail) in Arizona.
 
Let’s focus on the factors that make Pinnacle West a good investment option at the moment.

Zacks Rank & VGM Score

Pinnacle West currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The company 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.

Earnings Surprise Trend & Long-Term Growth

Pinnacle West beat estimates in three of the trailing four quarters, with average positive surprise being 4.97%. The company’s long-term (3-5 years) earnings growth is pegged at 4.99%.

Price Movement

In the past 12 months, Pinnacle West’s shares have rallied 26% compared with the industry’s rise of 15.3%.

Dividend Yield

The company’s capital expenditure plan will enable it to strengthen operations and serve the expanding customer base more efficiently.
 
The current dividend yield of the company is 3.07% compared with the industry’s 2.94% and the Zacks S&P 500 composites’ 1.97%

 Strong Credit Rating

The company carries investment grade ratings of A3 and A- by Moody’s and S&P, respectively. A higher rating denotes higher credit worthiness, thereby ensuring access to cheap financing options. The solid credit rating will allow the company to secure funds from the market at favorable conditions even with the recent rate hike.

Other Key Picks

Some other top-ranked stocks from the same industry are FirstEnergy Corp (FE - Free Report) , DTE Energy Co (DTE - Free Report) and IDACORP, Inc (IDA - Free Report) , each holding a Zacks Rank of 2.

FirstEnergy pulled off average positive earnings surprise of 5.09% in the last four quarters. The company’s long-term earnings growth is pegged at 6%.

DTE Energy pulled off average positive earnings surprise of 12.24% in the last four quarters. The company’s long-term earnings growth is pegged at 6%.

IDACORP delivered average positive earnings surprise of 13.83% in the last four quarters. The company’s long-term earnings growth is pegged at 3.80%.

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