PPL Corporation PPL is a diversified utility holding company. Its strategic investments to expand its clean energy generation capacity and construction of new generation, transmission and distribution projects are likely to boost its performance. Given its growth opportunities, PPL makes for a solid investment option in the utility sector.
The company currently carries a Zacks Rank #2 (Buy). Let’s look at the factors that are driving the stock.
Growth Projections & Surprise History of PPL
The Zacks Consensus Estimate for 2024 and 2025 earnings per share (EPS) is pegged at $1.72 and $1.84, respectively, which indicates year-over-year growth of 7.5% and 7.3%.
PPL’s long-term (three to five years) earnings growth rate is 6.82%. It delivered an average earnings surprise of 6.8% in the past four quarters.
PPL Stock’s Dividend Yield
PPL distributes dividends to shareholders on a regular basis. It aims to increase its dividend per share by 6-8% and expects its dividend payout ratio to be in the range of 60%-65%. Its current dividend yield is 3.27%, which is better than the Zacks S&P 500 Composite’s average of 1.26%.
Current Ratio of PPL
PPL’s current ratio is 1.11, better than the industry average of 0.85. The current ratio, being greater than one indicates the company has enough short-term assets to meet its short-term obligations.
Leverage of PPL
PPL’s total debt to capital at the end of the second quarter, was 53.4%, compared with its industry average of 60.9%.
The company’s time-to-interest earned ratio at the end of the second quarter was 2.5. The ratio, being greater than one, reflects its ability to meet future interest obligations without difficulties.
PPL’s Investments
PPL aims to invest $14.3 billion during the 2024-2027 time period. These capital investments will primarily focus on infrastructure construction projects for generation, transmission and distribution.
The capital investment for 2024 is expected to be $3.1 billion. The company aims to cut outages further, owing to the ongoing investments. It continues to make investments to strengthen grid, electricity and gas distribution as well as, electricity transmission and expand clean energy generation capacity. Investments will also focus on new technology and support increasing demand from data centers.
PPL’s subsidiaries, Louisville Gas and Electric Company and Kentucky Utilities Company requested the Kentucky Public Service Commission for approval to add two new combined-cycle natural gas plants, nearly 1 gigawatt of solar generation, 125 MW of battery storage and more than a dozen new energy efficiency programs by 2028 as part of the companies' generation replacement strategy.
PPL Stock Performance
Shares of PPL have gained 11.3% in the past three months compared with the industry’s 4% growth.
Image Source: Zacks Investment Research
Other Stocks to Consider
Other top-ranked stocks in the industry are American Electric Power Company, Inc. AEP, The AES Corporation AES and NiSource Inc. NI. Each of these stocks currently carries a Zacks Rank of 2. You can see the complete list of Zacks Rank #1 (Strong Buy) stocks here.
American Electric Power’s long-term earnings growth rate is 6.24%. The Zacks Consensus Estimate for 2024 earnings indicates year-over-year growth of 6.5%.
AES Corporation delivered an average earnings surprise of 19.2% in the last four quarters. The consensus estimate for 2024 earnings indicates year-over-year growth of 9.1%.
NiSource delivered an average earnings surprise of 20.6% in the last four quarters. The Zacks Consensus Estimate for 2024 earnings indicates year-over-year growth of 7.5%.
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NiSource, Inc (NI) : Free Stock Analysis Report
American Electric Power Company, Inc. (AEP) : Free Stock Analysis Report
The AES Corporation (AES) : Free Stock Analysis Report
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