On May 30, we have issued an updated research report on
Wisconsin Energy Corporation
). The utility firm's steady investment in infrastructure
development projects backed by strong financial position will
enable it to meet the increasing customer demand. In addition,
payment of dividend at regular intervals and effective share
repurchase initiative will help to retain investors' attention on
Wisconsin Energy, a Zacks Rank #3 (Hold) stock, reported favorable
results in first-quarter 2014. In the quarter, the company's
earnings per share and revenues surpassed the Zacks Consensus
Estimates and improved year over year. The outperformance was
primarily driven by a rise in retail electricity and natural gas
sales as a result of higher demand.
Wisconsin Energy is currently focusing on upgrading its aging
distribution infrastructure along with building blocks, installing
pipes, poles, wires and transformers at its delivery systems. In
2014, the company plans to invest $0.71 billion for the electricity
and gas distribution projects. These initiatives will enable
Wisconsin Energy to provide reliable services to its customers.
Wisconsin Energy continues to add new customers to its portfolio,
primarily backed by gradual improvement in economic condition in
the state of Wisconsin, switching to natural gas from propane and a
drop in unemployment rate. A rise in customer counts and higher
utility consumption are expected to boost the company's future
Wisconsin Energy continues to show its efficiency in terms of
improving cash inflow. During first-quarter 2014, the company's
operating cash flow increased 16.6% to around $0.39 billion from
the prior-year comparable level.
In addition to utilizing funds at numerous infrastructure
development projects, Wisconsin Energy follows several initiatives,
including dividend payments and share repurchase program, to
maximize shareholders' wealth. During the first quarter, the
company repurchased 0.4 million shares worth $18.6 million and paid
$88.1 million as common stock dividend.
On the flip side, we are concerned about strict environment
regulations related to power generation. Recently, the Obama
administration rolled out its plan to curb carbon emissions from
power plants by 30% by 2030. The rule will probably come into
effect next year. Wisconsin Energy generates a substantial portion
of electricity from coal-fired operations. Implementation of the
new regulations will increase Wisconsin Energy's operating costs,
thereby affecting margins.
Key Picks from the Sector
Some better-ranked stocks in the sector include
NRG Energy, Inc.
American Electric Power Co., Inc.
Alliant Energy Corporation
). While NRG Energy carries a Zacks Rank #1 (Strong Buy), American
Electric and Alliant Energy hold a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
AMER ELEC PWR (AEP): Free Stock Analysis Report
WISC ENERGY CP (WEC): Free Stock Analysis
NRG ENERGY INC (NRG): Free Stock Analysis
ALLIANT ENGY CP (LNT): Free Stock Analysis
To read this article on Zacks.com click here.