We reiterate our Neutral recommendation on
Xcel Energy Inc.
). The Minneapolis-based electricity and natural gas company at
present carries a Zacks Rank #2 (Buy).
Why the Reiteration?
We believe the company's successful cost-containment efforts
and favorable outcomes of the NSP Minnesota and NSP Wisconsin
rate cases will act as tailwinds in the upcoming quarters.
Xcel Energy is expected to derive substantial benefits from
its ambitious CapX2020 transmission program in Minnesota, which
received regulatory approval. The Bemidji-Grand Rapids
Transmission line, a part of CapX2020 was completed and the
230-Kv (Kilovolt) line has already come into service.
The company is also striving to develop its renewable
business. As of now it has added 1,713 megawatt of wind energy in
Colorado. This will certainly complement Xcel Energy's future
growth. The onset of production tax credits is expected to act as
a major catalyst to the company's eco-friendly endeavors.
Moreover, a sound financial position and maintenance of a
favorable credit rating are other positives that could work in
favor of Xcel Energy.
The Zacks Consensus Estimate for the first quarter 2013 is set
at 41 cents per share, up an estimated 6.73% from year-ago
earnings of 38 cents per share.
Other Stocks to Consider
While we believe Xcel Energy will perform satisfactorily in
the coming quarters, other utility companies worth a look are
Brookfield Infrastructures Partners
Pike Electric Corp
Empresa Nacional Electricidad SA
). All the above currently carry a Zacks Rank #1 (Strong
BROOKFIELD INFR (BIP): Free Stock Analysis
ENDESA-CHILE (EOC): Free Stock Analysis
PIKE ELECTRIC (PIKE): Free Stock Analysis
XCEL ENERGY INC (XEL): Free Stock Analysis
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