On May 20, 2013, shares of
NRG Energy Inc.
) climbed to a 52-week high of $28.34. A string of high-end
investments in solar generation and the acquisition of GenOn
Energy primarily lifted the company's stock to a new high.
NRG Energy boasted of four major solar installations - the
Avra Valley Solar Photovoltaic Facility and Agua Caliente Project
in Ariz. as well as the California Valley Solar Ranch and Alpine
Solar Generating Facility in Calif. - which came into service in
Meanwhile, the company received contract extensions last year
from its clients Houston Technology Center and Washington-based
St. Tammany Electric and Claiborne Electric cooperatives for
delivery of power services. In addition, the company clinched two
new long-term power supply commitments with Comcast and the city
of Houston. We believe these contracts will ensure a stable
NRG Energy's disciplined step to curb emission is evident from
its continued pro-environment work on the Big Cajun generating
facility in Louisiana. These initiatives enabled NRG Energy to
perform well despite the challenges presented by the energy
market last year.
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With the renewable market dynamics becoming more favorable in the
U.S., the company's unrelenting pursuit of options to expand its
solar portfolio will certainly prove to be a key growth driver.
In early 2013, NRG Energy successfully brought online its
large-scale 720 megawatt Marsh Landing Generating Station in
Antioch as well as the Borrego I Solar Generating Station. Also,
it acquired a Gregory cogeneration plant in Corpus Christi,
Texas, in agreement with Atlantic Power Corporation, John Hancock
Life Insurance Company and Rockland Capital, LLC.
The current valuation also makes the shares of NRG Energy
attractive. The forward price/earnings (P/E) multiple of 29.4x is
higher than the peer group average of 17.4x, reflecting a premium
of 69%. The Zacks Consensus Estimate for 2013 represents a
projected increase of 138.7% to 95 cents from year-ago earnings
of 40 cents.
Besides NRG Energy, utility stocks that are performing well and
hold a Zacks Rank #2 (Buy) include
Headquartered in Princeton, N.J., NRG Energy together with its
subsidiaries operates as an integrated wholesale power generation
and retail electricity company.