On Jan 21, 2015, shares of Public Service Enterprise Group Inc. ( PEG ) soared to a new 52-week high of $44.37, finally ending the trading session a tad lower at $44.30. This Newark, NJ-based company, with a market cap of $22.4 billion, saw its shares surge 35.31% in the last 52 weeks, outperforming the 11.14% gain of the S&P 500 over the same period.
Public Service Enterprise has beaten earnings estimates in three of the last four quarters, delivering an average beat of 1.15%. Its solid portfolio of regulated and non-regulated utility assets offers a stable earnings base and immense potential for long-term growth.
The company makes capital investments in its transmission and distribution infrastructure to improve performance and reliability. In the first nine months of 2014, PSE&G made capital expenditures of $1.49 billion mainly for transmission and distribution system reliability. Over the period of 2014-2018, the company expects to invest $13.1 billion, including $6.8 billion under the transmission capital spending program to protect and strengthen its electric and gas systems.
It is equally focused on expanding its renewable assets in light of the stringent environmental regulations. Recently in Dec 2014, the company acquired a 12.9 megawatts solar energy facility. (Read: Public Service Enterprise to Acquire 12.9 MW Solar Facility ). Over the period of 2014-2018, the company plans to invest roughly $0.3 billion in solar and energy efficiency programs.
A robust transmission capital spending program and sustained focus on renewable expansion will boost the bottom line of the company.
In order to pursue capital investments, the company focuses on strengthening its financial position. The company ended the third quarter of 2014 with cash balance of around $703 million, up 42.6% from $493 million as of Dec 31, 2013. In addition, Public Service Enterprise had available liquidity capacity of roughly $4.1 billion as of Sep 30, 2014. In the first nine months of 2014, operating cash flow increased 4.1% to $2.5 billion from $2.4 billion in the prior-year period.
Moreover, the company is committed to maximize shareholder value via payment of dividends at regular intervals. Public Service Enterprise's current annual dividend yield is 3.34%, higher than the industry average of 2.27%.
Public Service Enterprise has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry include CMS Energy Corp. ( CMS ), Consolidated Edison, Inc. ( ED ) and PG&E Corp. ( PCG ), each carrying a Zacks Rank #2 (Buy).
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