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Here's Why You Should Add AES Corp (AES) in Your Portfolio

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The AES Corporation’s (AES - Free Report) inclination toward preserving financial flexibility by reducing costs, growing partnerships and focusing on renewables is likely to be a growth catalyst.

Let’s discuss the factors that make the company an appropriate investment option at the moment.

Zacks Rank & VGM Score

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

AES Corp 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.

Price Performance

In the past month, the company’s shares have gained 34% compared with the industry’s growth of 18.6%.



Growth Projections

The Zacks Consensus Estimate for 2020 earnings is pegged at $1.42 cents per share on revenues of $10.59 billion. This indicates 4.41% and 3.95% increase of the bottom and the top line, respectively, from the year-ago period’s reported figures.

The company’s long-term (three to five years) earnings growth is pegged at 7.70%.

Dividend Yield & Return on Equity (ROE)

Currently, the company has a dividend yield of 3.89% compared with the Zacks S&P 500 composite’s 2.18% and the industry’s 3.16%

ROE is a measure of a company’s efficiency in utilizing shareholder’s funds. ROE for the trailing 12 months for the company is 22.82% compared with the industry’s ROE of 9.80% and Zacks S&P 500 composite’s 16.74%.

Other Key Picks

Some other top-ranked stocks from the same industry are NorthWestern Corporation (NWE - Free Report) , Pacific Gas & Electric Co. (PCG - Free Report) and Southern Company (SO - Free Report) . NorthWestern sports a Zacks Rank #1, while Pacific Gas & Electric and Southern Company carry a Zacks Rank #2.

Long-term earnings growth of Pacific Gas & Electric, NorthWestern and Southern Company is pegged at 2.50%, 3.30% and 4 %, respectively.

Pacific Gas & Electric, NorthWestern and Southern Company have trailing four-quarter positive earnings surprise of 7.35%, 7.62% and 8.13%, on average, respectively.

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