Reasons to Add Entergy (ETR) Stock to Your Portfolio Now

Entergy Corp. ETR, with strategic investments in grid upgrades, steady progress in adding renewable generation to its portfolio and rising earnings estimates, offers a great investment opportunity in the utility sector.

Let’s focus on the reasons that make this Zacks Rank #2 (Buy) stock a solid investment pick at the moment.

Growth Projections & Surprise History

The Zacks Consensus Estimate for ETR’s 2024 earnings per share (EPS), pegged at $7.22, implies an improvement of 6.7% from the 2023 reported figure. The Zacks Consensus Estimate for ETR’s total revenues for 2024 stands at $12.91 billion, which indicates year-over-year growth of 6.3%.

The company’s (three to five years) earnings growth is pegged at 7%.

Return on Equity

Return on equity (ROE) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, Entergy’s ROE is 10.54% compared to its industry’s average of 8.82%. This indicates that the company has been utilizing its funds more constructively than its peers in the industry.

Solvency

Entergy’s times interest earned ratio (TIE) at the end of the fourth quarter of 2023 was 2.6. The TIE ratio being more than 1 indicates that the company will be able to meet its interest payment obligations in the near term without any problems.

Dividend History

Entergy has been increasing shareholders’ value through solid dividend payments. In January 2024, ETR announced a quarterly dividend of $1.13 per share, resulting in an annual dividend of $4.52 per share. ETR’s current dividend yield is 4.39%, better than the Zacks S&P 500 composite’s yield of 1.29%.

Systematic Investment

ETR continues with systematic investments to upgrade its distribution and transmission infrastructure. For the 2024-2026 period, the company expects to invest $19.6 billion. These investments will help the company deliver reliability and resiliency, improve customers’ experiences and provide environmental and cost-efficiency benefits to its customers.

Price Performance

In the past three months, ETR shares have risen 2.7% against its industry’s decline of 3.4%.

Zacks Investment Research
Image Source: Zacks Investment Research

Other Stocks to Consider

A few other top-ranked stocks related to the same sector are Atmos Energy ATO, American Water Works AWK and Sempra Energy SRE, each holding a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Atmos Energy’s long-term earnings growth rate is pegged at 7.30%. The Zacks Consensus Estimate for the company’s fiscal 2024 sales is pegged at $4.97 billion, which implies a year-over-year increase of 16.3%.

American Water’s long-term earnings growth rate is pegged at 7.8%. The Zacks Consensus Estimate for the company’s 2024 sales stands at $4.26 billion, which calls for a year-over-year increase of 0.6%.

Sempra Energy’s long-term earnings growth rate is pegged at 5%. The Zacks Consensus Estimate for the company’s 2024 sales is pegged at $17.4 billion, which indicates a year-over-year rise of 4.1%.

 

5 Stocks Set to Double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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Sempra Energy (SRE) : Free Stock Analysis Report

Entergy Corporation (ETR) : Free Stock Analysis Report

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American Water Works Company, Inc. (AWK) : Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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