|Bid||82.21 x 800|
|Ask||83.49 x 1300|
|Day's range||81.23 - 83.42|
|52-week range||71.96 - 91.80|
|Beta (3Y Monthly)||-0.07|
|PE ratio (TTM)||20.93|
|Earnings date||2 Nov 2018|
|Forward dividend & yield||3.71 (4.59%)|
|1y target est||84.94|
Consolidated Edison (ED) expects to increase its earnings 4% over the next few years, which is in line with the industry average. Analysts are forecasting a 4% dividend increase over the next few years. Consolidated Edison’s management expects the company’s payout ratio to be 60%–70% going forward.
As of October 17, Reuters compiled data from 19 analysts tracking American Electric Power Company (AEP) stock. Five analysts recommended a “strong buy,” nine recommended a “buy,” and five recommended a “hold.” None of the analysts recommended a “sell.”
American Electric Power Company’s (AEP) EV-to-EBITDA multiple is 11.1x. The company’s five-year average EV-to-EBITDA multiple is 9.6x. Currently, American Electric Power is trading at a premium of 15.6% to its historical average.
Participation in this project will enable Duke Energy's (DUK) large non-residential customers to secure significant amounts of solar or other renewable energy.
Systematic investments in growth projects and infrastructure upgrades enable Ameren (AEE) to generate cash flow and reward shareholders with dividend.
Environmentalists said they found arsenic levels in North Carolina’s Cape Fear River at more than 70 times drinking-water standards after coal ash spilled from a Duke Energy Corp. power plant during Hurricane Florence. State officials concluded the water was safe. The seemingly contradictory results are largely because the two groups used different techniques and were looking for different things, according to Avner Vengosh, a Duke University professor who specializes in geochemistry and water quality.
On October 15, the implied volatility of AES Corporation (AES) stock was 25%, which was higher than its 15-day average volatility of 21%. AES’s average implied volatility in the last few weeks was way higher than that of broader utilities and broader markets. Implied volatility represents investor anxiety. An increase in implied volatility is generally associated with a fall in the stock and vice versa.
AES (AES) declared a per share dividend of $0.13 on October 12. The ex-dividend date for it is October 31, and the dividend will be paid on November 15. AES is currently trading at a dividend yield of 3.6%, marginally higher than utilities’ (XLU) average yield of 3.4%. AES’s recent dividend was an increase of more than 8% considering its dividends in the comparable period last year. In comparison, the industry average annual dividend growth is ~5%.
NextEra Energy (NEE), the biggest component in the Utilities Select Sector SPDR ETF (XLU), is currently trading at a forward PE multiple of 21x based on its estimated EPS for 2019. Its forward PE multiple is higher than its five-year historical average PE multiple of ~20x. Thus, the stock looks expensive considering its historical average as well as its 8% estimated earnings growth in 2019.
The sell-off in utilities (IDU) last week pulled them below their 50-day moving averages, which indicates a renewed weakness. The Utilities Select Sector SPDR ETF (XLU) is currently trading 1% below its 50-day moving average and 3% above its 200-day moving average. Its 200-day moving average of $51.22 will likely act as a support for XLU in the short term. XLU closed at $52.95 on October 12.
After a fairly positive start, utilities tumbled later last week and closed 1.3% lower. In comparison, the broader markets lost ~4% during the week. The sell-off last week pushed the S&P 500 to a three-month low after fresh trade war tensions weighed mainly on the technology and industrial sectors. The defensives such as utilities fared better as investors turned to safe-haven options, given their higher yields and stable price movements.
NextEra Energy (NEE) and Dominion Energy (D) are among the fastest growing utilities. Both of the utilities aim to grow their earnings ~7% annually, while broader utilities are expected to grow ~4% for the next few years. Their superior earnings growth will likely fuel above-average dividend growth as well.
Duke Energy (DUK) plans to invest $500 million in its battery energy storage projects that come with an electricity generation capacity of 300 megawatts (MW).
Despite the lower yield, NextEra Energy’s (NEE) dividend profile looks attractive, mainly due to its dividend growth. In the last five years, the company has increased its dividends more than 10% compounded annually. Utilities (XLU) at large increased their dividends ~4% compounded annually during the same period.
Utilities generally offer superior dividend yields compared to broader markets. Currently, utilities (XLU) yield ~3.5%, which is a yield premium of ~170 basis points over broader markets and just 20–30 basis points over ten-year Treasury yields. The yield premium to benchmark Treasury yields fell from ~150–200 basis points early this year. The recent strength in Treasury yields could be negative for utilities.
Duke Energy Corp. said Michael may trigger outages, some lasting for several days, in North Carolina and South Carolina. In Florida, the Charlotte-based company is warning that as many as 200,000 customers in the panhandle could lose power, potentially for “multiple days to over a week,” according to a statement Tuesday. Southern Co.’s Gulf Power utility said it expects the worst from Michael in Panama City and warned customers to prepare for “tropical storm-force winds, which could lead to prolonged, widespread outages,” according to a statement Tuesday.
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Let’s take a look at whether Southern Company (SO) stock looks attractive from the valuation perspective after its recent weakness. Currently, Southern Company is trading at a forward PE ratio of 14x based on the estimated EPS for 2019. Peers’ average forward PE ratio is close to 16x. Southern Company’s five-year historical average PE ratio is close to 16x. Southern Company seems to be trading at a discount compared to its historical valuation. However, the company looks expensive considering the estimated EPS growth of 1% for 2019.
Located about 360 miles (579 kilometers) south of Panama City, Florida, Michael is forecast to become the second hurricane to make landfall in the U.S. in a month. Its 110 mile-per-hour winds are just below the threshold for becoming a Category 3 hurricane as it plows through the Gulf of Mexico at around 12 miles per hour, according to the National Hurricane Center.
Let’s take a look at how the top utility stocks are valued. NextEra Energy (NEE), the biggest utility by market capitalization, is trading at a forward PE multiple of 21x based on its estimated EPS in 2019, which is way higher than broader utilities’ average forward PE multiple of ~14x. NextEra Energy’s forward PE multiple is also higher than its five-year historical average PE multiple of close to 20x.
At large, utilities rose ~2% last week despite the strength in Treasury yields. The benchmark ten-year Treasury yield closed at a multiyear high at 3.23% last week. In comparison, broader markets fell 1% during the week.
As of October 3, Reuters has compiled data from 14 analysts tracking Dominion Energy (D) stock. Two have rated Dominion as a “strong buy,” and one has rated it as a “buy.” The rest have rated the stock as a “hold.” No analysts have rated Dominion as a “sell.”
Water samples taken near Duke’s Sutton power plant site in Wilmington show “all metals below state water quality standards," the North Carolina Department of Environmental Quality said Thursday. On Wednesday, the environmental group Waterkeeper Alliance said its test showed arsenic levels in the Cape Fear River were more than 70 times above the state’s drinking-water standard.