On Mar 7, 2014, we issued an updated research report on
OGE Energy Corp.
). Recently, the company posted strong fourth quarter 2014
results with the top and bottom line coming in above the Zacks
The sales and earnings beat came on the back of higher
megawatt-hour sales particularly to residential and commercial
customers. A 27.5% drop in total operating expenses to $203.3
million further supported the bottom line.
OGE Energy is the largest electric utility in Oklahoma and a
well-positioned regulated utility. As for the company's
strengths, its effort towards addition of new infrastructure,
focus on renewable sources and addition of new customers are
expected to boost future results. Last year, the company invested
$797.6 million in capital expenditures and intends to spend $585
million this year. Of the total 2014 capital outlay, $360 million
is apportioned for the base transmission, distribution and
Apart from expanding traditional fuel-fired operations, OGE
Energy is smart enough to leverage the topography of Oklahoma to
develop wind-based energy assets. Presently, it has a robust wind
power portfolio, including a 120 megawatt (MW) Centennial wind
farm, a 101 MW OU Spirit wind farm, a 227.5 MW Crossroads wind
farm and so on. In 2013, the company generated 7% of total
electricity from wind-powered assets. The company's focus on
expanding the renewable generation portfolio will enable it to
fulfill the U.S. government's mandates.
Again, OGE Energy's steady dividend payout history and dividend
rate revision at regular intervals help it to retain investors'
attention in the stock. In Dec 2013, the board of directors of
the company hiked the quarterly dividend rate by 7.8% to 90 cents
However, OGE Energy's utility operations are subject to federal,
state and local legislative requirements, as well as extensive
environmental regulations. Change in the regulatory environment
could also impact the company's earnings. Inability to comply
with various laws and regulations and obtain fair and timely rate
relief and requisite regulatory approvals could have an adverse
impact on its future earnings growth.
OGE Energy holds a Zacks Rank #2 (Buy). Other players in the
utility industry, which look more attractive at current levels,
Otter Tail Corporation
Public Service Enterprise Group Inc.
). All these stocks carry a Zacks Rank #1 (Strong Buy).
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OGE ENERGY CORP (OGE): Free Stock Analysis
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PUBLIC SV ENTRP (PEG): Free Stock Analysis
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