Yahoo Finance Reasons to Buy Pinnacle West Capital (PNW) Stock Right Now
Pinnacle West Capital Corporation’s PNW systematic investments in generation and transmission & distribution lines should help serve its customers efficiently and expand its clean generation portfolio. Given its strong growth, PNW makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for Pinnacle West Capital’s second-quarter 2024 earnings per share (EPS) has moved up 11.4% to $1.17 in the past 60 days.
The Zacks Consensus Estimate for second-quarter sales is pinned at $1.13 billion, indicating year-over-year growth of 1.2%.
PNW’s long-term (three to five years) earnings growth rate is 8.22%. It delivered an average earnings surprise of 233.5% in the last four quarters.
Debt Position
Currently, PNW’s total debt to capital is 59.34%, better than the industry’s average of 61.57%.
The time-to-interest earned ratio at the end of the first quarter of 2024 was 2.6. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
Dividend
Pinnacle West Capital continues to increase its shareholders’ value through dividend payments. Currently, the company’s quarterly dividend is 88 cents per share, resulting in an annualized dividend of $3.52 per share, up 1.7% from the previous level of $3.46. PNW’s current dividend yield is 4.65%, better than the utility electric power industry’s 3.74%.
Systematic Investments & Customer Growth
PNW’s consistent investments to upgrade and maintain the existing infrastructure help in providing reliable services to its expanding customer base. The company has a capital plan of $6 billion for 2024-2026. PNW expects transmission investments of nearly $1.2 billion during the same period.
Improved economic conditions in Arizona have resulted in an expanding customer base. The company projects long-term retail customer growth of 1.5-2.5% and weather-normalized retail electricity sales growth of 4-6%.
Focus on Clean Power Generation
Pinnacle West Capital continues to focus on enhancing its renewable capacity. During 2024-2026, the company expects to invest nearly $2.2 billion in boosting clean power generation. Since 2020, the company has contracted more than 5,000 MW of clean energy and storage to be in service for Arizona Public Service Company’s customers by the end of 2025. It also plans to install more than 2,100 MW of energy storage by 2025, including the energy storage projects under purchase power agreements and Arizona sun retrofits.
Price Performance
In the past three months, Pinnacle West Capital’s shares have risen 1.2% against the industry’s 2.3% decline.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are PPL Corporation PPL, Portland General Electric POR and Consolidated Edison ED, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PPL’s long-term earnings growth rate is 6.82%. The Zacks Consensus Estimate for PPL’s 2024 EPS implies a year-over-year increase of 6.9%.
The Zacks Consensus Estimate for POR’s 2024 EPS implies a year-over-year improvement of 29.8%. The Zacks Consensus Estimate for sales indicates year-over-year growth of 10.3%.
ED’s long-term earnings growth rate is 7.39%. The Zacks Consensus Estimate for ED’s 2024 EPS implies a year-over-year increase of 5.1%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
PPL Corporation (PPL) : Free Stock Analysis Report
Consolidated Edison Inc (ED) : Free Stock Analysis Report
Pinnacle West Capital Corporation (PNW) : Free Stock Analysis Report
Portland General Electric Company (POR) : Free Stock Analysis Report
