Eversource Energy's ES strategic investment in transmission and distribution networks, acquisitions, expansion of renewable operations, strong ROE and rising earnings estimates make it a solid investment option in the utility sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for ES’ 2024 earnings per share (EPS) has increased 0.2% in the past 60 days to $4.52.
The Zacks Consensus Estimate for 2024 sales is pegged at $12.87 billion, indicating an increase of 8.05% from a year ago.
ES’ long-term (three-to-five years) earnings growth rate is 4.16%. It delivered an average earnings surprise of 2.08% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, Eversource Energy’s trailing 12-month ROE is 9.92%, higher than the industry’s average of 8.67%. This indicates that the company has been utilizing its funds more constructively than its peers in the electric power utility industry.
Dividend History
Eversource Energy has been increasing its shareholders’ value through dividend payments. Currently, its quarterly dividend is 71.5 cents per share. This represents an annualized dividend of $2.86 per share. The company’s current dividend yield is 5% compared with industry’s yield of 3.8%.
Systematic Investments
Management has been making investments to strengthen its operation to increase reliability of operations and serve its customers more efficiently. The company forecasts a capital investment of $23.1 billion during 2024-2028, out of which it plans to invest nearly $16.1 billion in electric and natural gas distribution networks and $7.2 billion in the electric transmission segment.
Grid modernization and advanced meter infrastructure will assist the company in serving customers more efficiently. Systematic expenditure is enabling it to expand, and strengthen transmission and distribution operations, as well as efficiently serve electric and natural gas customers.
Price Performance
In the past six months, ES’ shares have rallied 5% compared with the industry’s growth of 2%.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are Atmos Energy ATO, MDU Resources MDU and New Jersey Resources NJR, each holding a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ATO’s long-term earnings growth rate is 7%. The Zacks Consensus Estimate for fiscal 2024 EPS has moved up by 0.3% in the past 60 days.
MDU’s long-term earnings growth rate is 6%. The Zacks Consensus Estimate for MDU’s 2024 EPS has moved up by 0.7% in the past 60 days.
NJR delivered an average earnings surprise of 105.1% in the last four quarters. The Zacks Consensus Estimate for fiscal 2024 EPS has moved up by 2.4% in the past 60 days.
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