On Mar 8, 2014, Zacks Investment Research upgraded
) to a Zacks Rank #1 (Strong Buy).
CMS ENERGY (CMS): Free Stock Analysis Report
EXELON CORP (EXC): Free Stock Analysis Report
OGE ENERGY CORP (OGE): Free Stock Analysis
PUBLIC SV ENTRP (PEG): Free Stock Analysis
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Why the Upgrade?
Exelon reported positive earnings surprises in 2 out of the past
4 quarters with an average earnings beat of 3.8%.
Though Exelon's fourth-quarter and full-year 2013 adjusted
operating earnings and quarterly revenue lagged the Zacks
Consensus Estimate and the corresponding year-ago figures, the
company's annual revenues surpassed both the Zacks Consensus
Estimate as well as the prior-year figure primarily on the back
of improved contribution from Generation and Baltimore Gas and
We note that Exelon continues to maintain a strong cash position
besides exhibiting its cash generation efficiency through
operating activities. The company's cash balance improved to $1.5
billion as of Dec 31, 2013 from $1.4 billion at the end of 2012.
In 2013, net cash flows provided by operating activities
increased to $6.3 billion from $6.1 billion in the year-ago
A stable financial position supports Exelon's stable growth
strategy. In 2013, the company invested $5.4 billion under its
capital expenditure program. In the coming five years, the
company plans to invest around $15 billion to install smart meter
technology in electricity system improvement and gas
infrastructure projects as well as transmission ventures. These
projects will enable Exelon to provide reliable services to its
Apart from investing in numerous projects, Exelon also utilizes
funds to improve shareholder value through regular dividend
payouts. In 2013, the company distributed around $1.24 billion as
common stock dividends. The company's practice of returning
wealth to shareholders through dividend payment will be
beneficial for the stock as it attracts investor attention.
We appreciate Exelon's steady effort towards curtailment of its
expenses. In fourth-quarter 2013, the company's total operating
expenses edged down 4.3% year over year to $5.3 billion, mainly
due to decreases in purchase power and fuel expenses, and
operating and maintenance expenses. These initiatives will help
Exelon to improve margins.
Other Stocks to Consider
Some other stocks worth considering in the utility industry
Public Service Enterprise Group Inc.
OGE Energy Corp.
CMS Energy Corporation
). While Public Service Enterprise Group holds a Zacks Rank #1
(Strong Buy), OGE Energy and CMS Energy carry a Zacks Rank #2