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Reasons to Add Pinnacle West (PNW) Stock to Your Portfolio

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Pinnacle West Capital Corporation’s (PNW - Free Report) investments in clean power generation as well as transmission and distribution lines will help it serve customers efficiently. Improving economic conditions are also driving demand.

Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a good investment option at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Growth Projections

The Zacks Consensus Estimate for the company’s 2020 earnings is pegged at $4.91 per share on revenues of $3.82 billion. The bottom-line figure suggests a 4.40% year-over-year increase. The same for the top line calls for a 5.46% rise on a year-on-year basis. The company’s long-term (3 to 5 years) earnings growth rate is pegged at 4.90%.  

Long-Term Price Movement & Dividend Yield

In the past five years, Pinnacle West’s shares have rallied 30.1% compared with the industry’s rise of 15.2%.



The current dividend yield of the company is 3.54% compared with the industry’s 2.81% and the Zacks S&P 500 composite's 1.79%

Capital Investments

Pinnacle West projects capital expenditure of $1,331 million and $1,472 million for 2020 and 2021, respectively. The expenditures will be funded through internally-generated cash flows. The company plans to invest heavily in infrastructure upgrades to serve its growing customer base. The company is also planning to invest $20 million through 2021 on AZ Pilot Program — EV charging, installation and maintenance for business customers, government agencies and multifamily housing communities.

Strong Credit Rating

Pinnacle West 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 enable the company to secure funds from the market at favorable conditions.

Other Key Picks

Some other top-ranked stocks from the same industry are The AES Corporation (AES - Free Report) , Entergy Corporation (ETR - Free Report) and Dominion Energy Inc (D - Free Report) . The AES Corporation currently sports a Zacks Rank #1, while the other two stocks carry a Zack Rank of 2.

The AES Corporation, Entergy and Dominion Energy have a trailing four-quarter positive earnings surprise of 4.68%, 4.79% and 0.10%, on average, respectively.

The long-term earnings growth rates for The AES Corporation, Entergy and Dominion Energy are pegged at 9.11%, 7% and 4.80%, respectively.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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