On Jan 17, Zacks Investment Research upgraded
Integrys Energy Group
(
TEG
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
The contract win to supply electricity to nearly a million
residents of Chicago is a big positive for the company. This
contract will add nearly $300 million in revenue per year until
May 2015. All of the electricity supplied would be from non-coal
power units.
Meanwhile we believe Integrys' decision to acquire Fox Energy
Company will come in handy. Integrys will be able to utilize the
593 Megawatt combined cycle plant of Fox Energy to fulfill the
clauses of the Chicago contract.
This electric utility registered an earnings surprise of 44.7% in
the third quarter. The average earnings beat in the last four
quarters comes to 3.57%. The long-term earnings growth rate of
the company is 5.3%.
Nearly 90% of the earnings of Integrys come from its regulated
operations. Rate increases at People's Gas, North Shore Gas, and
Upper Peninsula Power will continue to benefit the company.
Moreover, the capital expenditure budget of $2.7 billion over the
2012 through 2014 period is directed towards undergrounding of
electric distribution lines, main replacement and acquisition.
These initiatives will increase reliability of service and
enhance the generation capacity of the company.
Another factor making the shares attractive is its consistent
dividend payment policy that runs for 72 years now. An annual
dividend of $2.72 per share results in a dividend yield of 5.09%,
at par with the industry average.
The Zacks Consensus Estimate for 2013 moved higher by 1.16% to
$3.48 per share over the last 60 days, which reflects
year-over-year growth of 5.7%.
Other Stocks to Consider
Other than Integrys Energy Group there are a few more electric
utilities performing well and holding a favorable Zacks Rank.
Other stocks worth considering are
Ameren Corporation
(
AEE
),
Wisconsin Energy Corporation
(
WEC
) and
Pike Electric Corporation
(
PIKE
). All of these stocks carry a short-term Zacks Rank #1 (Strong
Buy).
AMEREN CORP (AEE): Free Stock Analysis Report
PIKE ELECTRIC (PIKE): Free Stock Analysis
Report
INTEGRYS ENERGY (TEG): Free Stock Analysis
Report
WISC ENERGY CP (WEC): Free Stock Analysis
Report
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