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4 Utility Stocks in Focus on World Environment Day 2020

Jewel Saha

The theme for this year’s World Environment Day is biodiversity. This year’s event is being held in Colombia, in partnership with Germany. The basic objective of celebrating this day is to focus on environmental issues and try to find a solution involving governments, businesses and citizens. Last year’s theme was air pollution.

Though the novel coronavirus outbreak has wreaked havoc across the globe, one positive to come out of it is the drastic reduction in pollution. Lockdown and extended stay-at-home orders improved the quality of air. The two new studies that were published in the journal Geophysical Research Letters indicate that nitrogen dioxide pollution over northern China, Western Europe and the United States decreased nearly 60% in early 2020 from the same time last year.

However, as the process of reopening of activities has started, air pollution levels will again increase. With increase in C&I activities, the demand for electricity will increase. Electricity generation, being a major contributor to pollution, will again deteriorate air quality.

Per the U.S. Energy Information Administration’s finding, nearly 32% of the carbon dioxide emitted in the United States in 2019 came from electricity generation. The companies belonging to the Zacks Utility Electric Power industry can play a major role in improving air quality and provide a permanent solution to lower air pollution.  

A few utilities in the United States have already started working on becoming net-zero emission companies over next few decades. Despite an expected increase in electricity load over the next few decades, let us focus on four utilities among others that have taken the decision to offer electricity to consumers even when commercial, industrial, and other economic activities run at the full pace.

Price Performance (One Month)

Avista Corporation AVA, a Zacks Rank #3 (Hold) stock, has been providing clean and reliable energy to customers. The company has taken initiatives to supply 100% clean energy to customers by 2045. The Zacks Consensus Estimate for 2020 of $1.97 indicates a year-over-year increase of 13.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Xcel Energy XEL, a Zacks Rank #3 stock, is focusing on electricity generation from clean sources. It is working to reduce 80% carbon emissions by 2030 and generate 100% carbon-free electricity within 2050 from 2005 levels. The Zacks Consensus Estimate for 2020 earnings of $2.76 suggests a 4.6% year-over-year increase.   

Duke Energy DUK, another Zacks Rank #3 stock, has started adding more clean electricity generation sources to the production portfolio through systematic capital investment. The company announced comprehensive plans to lower overall carbon footprint, which includes attaining at least 50% reduction by 2030 and net-zero emissions within 2050 from 2005 levels. The Zacks Consensus Estimate for 2020 earnings of $5.19 implies a year-over-year increase of 2.6%.   

DTE Energy DTE is investing steadily to enhance renewable generation assets. The company aims to cut emissions by 50% by 2030 and 100% within 2050 from 2005 levels. It carries a Zacks Rank #3 at present. The Zacks Consensus Estimate for 2020 earnings of $6.51 points to a year-over-year increase of 3.3%.   

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Xcel Energy Inc. (XEL) : Free Stock Analysis Report
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