FirstEnergy Corp. (FE) benefits from its extensive transmission and distribution operations. The company’s ongoing investments are expected to strengthen grid reliability and improve service efficiency for its customers. Considering its promising growth prospects, FE offers a robust investment opportunity in the Zacks Utility Electric Power industry.
Let us focus on the reasons that make this Zacks Rank #2 (Buy) stock a solid investment pick at the moment.
FE’s Growth Outlook & Surprise History
The Zacks Consensus Estimate for FE’s 2025 earnings per share (EPS) has increased 0.4% to $2.54 in the past 30 days.
The Zacks Consensus Estimate for FE’s 2025 revenues stands at $14.4 billion, which indicates growth of 6.9% from the 2024 reported figure.
FE’s long-term (three to five years) earnings growth rate is 6.46%. The company delivered an average earnings surprise of 5.15% in the last four quarters.
FE’s Return on Equity
Return on equity (ROE) measures how effectively a company has used its funds to generate higher returns. FirstEnergy currently has an ROE of 11.15% compared to the industry’s average of 9.64%. This indicates that the company has been utilizing its funds more constructively than its peers in the industry.
FE’s Multi-Year Investment Priorities
FirstEnergy’s strategic investments are expected to enhance service efficiency for its six million customers. In the past several years, Regulated Distribution has achieved rate base growth driven by ongoing investments.
The company planned $28 billion in capital spending for 2025-2029, which will support the deployment of advanced equipment and technologies to modernize and reinforce its transmission and distribution infrastructure. FirstEnergy intends to continue increasing capital investments to further strengthen its operations.
FE’s Return to Shareholders
FirstEnergy has been enhancing shareholder value through consistent dividend payments. The company’s board of directors approved a revised dividend policy, raising the targeted payout ratio to 60-70%. Currently, its quarterly dividend is 44.5 cents per share, resulting in an annualized dividend of $1.78. FE’s current dividend yield is 3.76%, better than the Zacks S&P 500 Composite's average of 1.49%.
FE’s Solvency
FE’s times interest earned ratio (TIE) at the end of the third quarter of 2025 was 2.6. The TIE ratio is an important indicator of a company’s financial stability, measuring its capacity to meet long-term debt obligations. The TIE ratio of more than 1 indicates that the company will be able to meet its interest payment obligations in the near term without any problems.
FE Stock Price Performance
In the past six months, FE shares have rallied 15% compared with the industry’s growth of 13.1%.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are Dominion Energy, Inc. (D), NiSource Inc. (NI) and Edison International (EIX), each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
D’s long-term earnings growth rate is 10.26%. The Zacks Consensus Estimate for its 2025 EPS stands at $3.40, which calls for a year-over-year rise of 22.7%.
NI’s long-term earnings growth rate is 7.93%. The Zacks Consensus Estimate for its 2025 EPS is pegged at $1.88, which suggests year-over-year growth of 7.4%.
EIX’s long-term earnings growth rate is 10.93%. The consensus estimate for its 2025 EPS is pegged at $6.10, which indicates a year-over-year jump of 22.7%.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
