We have maintained our Neutral recommendation on
TECO Energy Inc.
). The company currently has a Zacks Rank #3 (Hold).
CPFL ENERGI-ADR (CPL): Get Free Report
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TECO ENERGY (TE): Free Stock Analysis Report
INTEGRYS ENERGY (TEG): Free Stock Analysis
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Why the Reiteration?
In first-quarter 2013, TECO Energy's earnings per share and
revenues beat the Zacks Consensus Estimate owing to steady
customer growth in its Tampa Electric and People Gas divisions, a
marginal benefit from last year's sale of TECO Guatemala, ongoing
improvement in housing and cooler-than-normal weather conditions.
Gradual improvement of economy at the state of Florida including
housing market recovery, decline in unemployment rate and
creation of new jobs will create demand for utility services.
These factors will subsequently fuel TECO Energy's forthcoming
In addition, TECO Energy discontinued its international
operations and sold its unit TECO Guatemala for $227.5 million.
The company intends to utilize a major part of the sale-proceeds
to strengthen Tampa Electric's portfolio by improving existing
set ups and adding new assets. These steps will bring stability
to TECO Energy's operating flexibility by assuring to provide
better services to higher number of customers.
On the flip side, the U.S. Environmental Protection Agency is
planning to propose new regulations regarding handling, storage
and disposal of coal combustion by-products (CCB). The new rules
are expected to reduce and abolish the use of CCBs, or eliminate
the use of ponds for by-product storage and disposal.
Subsequently, the utility companies have to invest substantial
amount for dry handling and storage, which will increase
Other Stocks to Consider
The other stocks in the industry that are worth considering
CPFL Energia S.A.
Companhia Paranaense de Energia
) with a Zacks Rank #1 (Strong Buy), and
Integrys Energy Group, Inc.
) with a Zacks Rank #2 (Buy).