On Apr 26, 2013, the shares of
) hit a new 52 week high of $33.15. The utility's focus on
rate-regulated investments propelled the stock to a new high. The
company registered earnings surprises in the past four quarters
with an average beat of 10.71%.
PPL's wide customer base served well in generating healthy
revenues. The company provides power to around 1.4 million
consumers in Pennsylvania alone and to 7.8 million UK consumers
Going forward, PPL's high-end acquisition of AES Ironwood,
L.L.C and AES Prescott, L.L.C, now known as PPL Ironwood from
The AES Corp.
) has strengthened its natural gas portfolio. This has expanded
PPL's regulated business which stood to gain from rising
coal-to-gas switching in 2012.
The company's efforts to upgrade its midstream infrastructure
have also helped in delivering uninterrupted electric services.
PPL's Western Power Distribution invested £3.7 million
(approximately $6.0 million) to boost reliability of its
transmission services in UK's Irthlingborough network.
Further, the company recently proposed to better equip its
power assets and spend about $1 billion in 2013.
The company's sound financial position has also supported its
growth-related endeavors and will further aid in developing its
inorganic growth strategy. PPL's impressive dividend profile has
been a major highlight with the recent quarterly increase of 2.1%
to 36.75 cents. The annual dividend yield of the company is 4.45%
substantially higher than the industry average of 2.98%.
The present valuation too makes the shares of PPL attractive.
The forward price/earnings (P/E) multiple 13.7x is lower than the
peer group average of 15.3x, reflecting a discount of 10.45%. In
addition, Return on Equity ("ROE") of the company is 12.8%,
higher than the peer group average of 9%.
PPL Corp. at present carries a Zacks Rank #3 (Hold). Other
operators in the utility space currently looking good are
Brookfield Infrastructure Partners L.P.
Pike Electric Corp.
). Both the stocks hold a Zacks Rank #1 (Strong Buy).
AES CORP (AES): Free Stock Analysis Report
BROOKFIELD INFR (BIP): Free Stock Analysis
PIKE ELECTRIC (PIKE): Free Stock Analysis
PPL CORP (PPL): Free Stock Analysis Report
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