NRG Energy, Inc.’s NRG cost-saving initiatives, acquisitions, service to wide variety of customers and share buyback strategy will support its long-term growth objectives.
Let’s focus on the factors that make this Utility - Electric Power company an attractive investment option.
Zacks Rank & Price Performance
NRG Energy holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of the company have increased 10% in the past month against the industry’s decline of 5.1%.
Growth Projection & VGM Score
The Zacks Consensus Estimate for 2020 earnings is pegged at $5.58 per share. The bottom-line figure suggests a 40.91% year-over-year increase.
NRG Energy has an impressive VGM Score of B. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors. Back tested results show that stocks with a favorable VGM Score of A or B coupled with a bullish Zacks Rank are the best investment options.
In the first quarter of 2020, NRG Energy increased the annual dividend rate to $1.20 per share from 12 cents. It expects to achieve an annual dividend growth rate of 7-9% per share over the long term, subject to the board of directors’ approval. On Apr 15, NRG declared a quarterly dividend of 30 cents per share, payable on May 15 to stockholders of record as of May 1. Currently, the dividend yield of the company is pegged at 3.78% higher than Zacks S&P 500 composite’s 2.23%.
NRG Energy has initiated its three-year Transformation Plan in July 2017. This plan is designed to strengthen earnings, increase cost savings and boost shareholder’s value. The plan is on track for $215 million cumulative EBITDA-accretive margin enhancement, which includes $80 million in 2020. In the first quarter, the company’s capital expenditures were $66 million. Estimated capital expenditures for the rest of 2020 is $168 million.
Other Key Picks
Some other top-ranked stocks from the same sector are Sempra Energy SRE, Vistra Energy Corp VST and NextEra Energy, Inc. NEE. All the three stocks carry a Zacks Rank #2.
Long-term earnings growth of Sempra Energy, Vistra Energy and NextEra Energy is pegged at 6.90%, 11.90% and 7.70 %, respectively.
Sempra Energy, Vistra Energy and NextEra Energy have a trailing four-quarter positive earnings surprise of 11.05%, 5.59% and 2.39%, on average, respectively.
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Sempra Energy (SRE) : Free Stock Analysis Report
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