On Sep 26, Zacks Investment Research upgraded
UNS Energy Corporation
) to a Zacks Rank #1 (Strong Buy).
AES CORP (AES): Free Stock Analysis Report
BROOKFIELD INFR (BIP): Free Stock Analysis
INTEGRYS ENERGY (TEG): Free Stock Analysis
UNS ENERGY CORP (UNS): Free Stock Analysis
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Why the Upgrade?
UNS Energy has witnessed rising earnings estimates on the back of
a solid performance in the second quarter. The electric utility
has delivered positive earnings surprises in the last 4 quarters
with an average beat of 34.22%. The long-term earnings growth of
the company is presently pegged at 6.95% driven by sales growth
The second quarter marked the end of four and half years of rate
freeze at its subsidiary Tucson Electric Power (TEP). During this
period, UNS Energy controlled its operating costs efficiently and
also ensured the safety and reliability of its services.
The Arizona Corporation Commission (ACC) approved new rates for
TEP in June, which came into effect from Jul 1. We believe the
new rates will create additional funds for the company, which
could be recycled back to develop its infrastructure.
The financial flexibility and strong performance have enabled the
company to increase the annual dividend rate in each of the last
12 years. The current dividend yield of the company is 3.69%,
higher than the industry average of 2.01%.
The Zacks Consensus Estimate for 2013 increased 5.7% in the last
60 days to $2.86 per share, which reflects year-over-year growth
of 28.03%. For 2014, the Zacks Consensus Estimate increased 1.2%
in the last 60 days to $3.45 per share, which reflects
year-over-year growth of 20.96%.
Other Stocks to Consider
Besides UNS Energy Corp., a few other electric utilities are also
performing well and have a favorable Zacks Rank. These are
The AES Corporation
Brookfield Infrastructure Partners L.P.
Integrys Energy Group, Inc.
), each with a Zacks Ranks #2 (Buy).