We have maintained our Neutral recommendation on a utility
Wisconsin Energy Corporation
). The company currently has a Zacks Rank #2 (Buy).
Why the Reiteration?
In first-quarter 2013, Wisconsin Energy's earnings per share and
revenues surpassed the Zacks Consensus Estimates and year-ago
results. The encouraging results were mainly due to a rise in
electricity consumption by residential, small commercial and
industrial customers, strong contributions from We Power
operations and positive impacts from the share repurchase
Wisconsin Energy successfully completed its 10-year "Power the
Future" (PTF) plan. Under the program, the company spent $3
billion to construct 2,320 megawatts generating capacity, and
upgrade the existing generation and distribution assets. We
believe that this program will act as strong future earnings
In addition, Wisconsin Energy intends to spend $3.2 billion to
$3.5 billion in the next five years to upgrade its transmission
and distribution infrastructure. These initiatives will enhance
the reliability of the company's services that will support it in
transmitting sufficient electricity, thereby meeting the
increasing demand for power in its service areas.
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The solid performance and financial strength allow Wisconsin
Energy to help its shareholders in terms of maximizing their
wealth through dividend payment at regular intervals. The company
paid $77.8 million as dividend during the first three months of
2013 ended Mar 31, 2013.
However, stringent utility regulations, risk related to the
timely completion of several small projects and volatile
commodity pricing could weigh on its forthcoming performance.
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
) with a Zacks Rank #2 (Buy).