On May 28, 2014, the shares of
) climbed to a 52-week high of $34.66. The share price finally
closed at $34.64, up 0.9% from the previous day's closing. We
believe that the company's strong liquidity position, efficient
cash generation capacity, disciplined investment in various
projects, strategic asset divestment and payment of dividends at
regular intervals have boosted the share price. These positives are
expected to drive PPL Corp.'s future performance as well.
PPL Corp. maintains a stable liquidity position and cash generation
capability. As of Mar 31, 2014, the company's cash and cash
equivalents were $1.26 billion versus $1.1 billion as of Dec 31,
2013. In the first three months of 2014, cash flow from operating
activities jumped substantially to $0.93 billion from $0.24 billion
in the year-ago comparable period.
A strong financial position supports PPL Corp.'s capital
requirement for infrastructure ventures. In the first quarter, the
company invested around $0.9 billion on property, plant and
equipment. The company's Susquehanna-Roseland transmission line
project is progressing well. It has energized a new 230-kilovolt
section of the line through the Delaware water gap. PPL Corp. plans
to invest $4.11 billion in 2014. Steady investment in transmission
and distribution assets will ensure uninterrupted services to its
Apart from investing in different ventures, PPL Corp. also follows
an asset divestment strategy. The company's unit in Montana plans
to sell 633 megawatt of hydroelectric generating assets. If
approved, PPL Corp. can utilize the proceeds for other profitable
In addition to capital investments, PPL Corp. also has a regular
dividend payment policy, which enables it to maximize shareholder
wealth. In the first quarter of 2014, the company paid $234 million
as dividends. This initiative will enable PPL Corp. to retain
investor attention in the stock.
PPL Corp. currently has a Zacks Rank #3 (Hold). However, some
better-ranked stocks in the utilities industry include
NRG Energy, Inc.
Alliant Energy Corporation
American Electric Power Company, Inc.
). While NRG Energy holds a Zacks Rank #1 (Strong Buy), Alliant
Energy and American Electric Power carry a Zacks Rank #2 (Buy).
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